CAMBER ENERGY, INC. 8-K


 


Exhibit
10.1


 








STOCK
PURCHASE AGREEMENT


This
Stock Purchase Agreement (“Agreement”) is made and entered into on November 23, 2018 (“Effective
Date”), by and between Camber Energy, Inc., a Nevada corporation (“Company”),
and the investor whose name appears on the signature page hereto (“Investor”).


Recitals


A.       


The
parties desire that, upon the terms and subject to the conditions herein, Investor will purchase $28 million in shares of Series
C Redeemable Convertible Preferred Stock of the Company; and


B.       


The
offer and sale of the Securities provided for herein are being made pursuant to the exemptions from registration under Section
4(a)(2) of the Act as a transaction by an issuer not involving any public offering, and as an offshore private placement of restricted
securities pursuant to Rule 506 of Regulation D.


Agreement


In
consideration of the foregoing, the receipt and adequacy of which are hereby acknowledged, Company and Investor agree as follows:


I.       


Definitions.
In addition to the terms defined elsewhere in this Agreement and the Transaction Documents, capitalized terms that are not otherwise
defined have the meanings set forth in the Glossary of Defined Terms attached hereto as Exhibit 1 or
the other Transaction Documents.


II.       


Purchase
and Sale.


A.       


Purchase
Amount. Subject to the terms and conditions herein and the satisfaction of the conditions
to Closings set forth below, Investor hereby irrevocably agrees (pursuant to the terms of this Agreement below, including the
Company Option), to purchase 2,941 Preferred Shares at $10,000.00 per share (“Face Value”)
with a 5.0% original issue discount (“OID”) for the sum of $28,000,000.00
(“Purchase Amount”).


B.       


Deliveries.
The following documents will be fully executed and delivered at the Closing:


1.       


This
Agreement;


2.       


Legal
Opinion, in the form attached hereto as Exhibit 2;


3.       


Officer’s
Certificate, in the form attached hereto as Exhibit 3;


4.       


Secretary’s
Certificate, in the form attached hereto as Exhibit 4; and


5.       


A
stock certificate or transfer Agent book entry for the number of purchased Preferred Shares in the name of Investor.




    	 	 	 



    	 



    

 


C.       


Closing
Conditions. The consummation of the transactions contemplated by this Agreement (each, a
“Closing”) is subject to the satisfaction of each of the following conditions:


1.       


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;


2.       


The
Common Stock is listed for and currently trading on the same or higher Trading Market and, except with regard to the Initial Closing
only, Company is in compliance with all requirements to maintain listing on the Trading Market and there
is no notice of any suspension or delisting with respect to the trading of the shares of Common Stock on such Trading
Market;


3.       


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);


4.       


Except
for those prior breaches known to or identified by Investor prior to the Effective Date, no material breach or default has
occurred under any Transaction Document with respect to any Preferred or any other agreement between Company and
Investor or any Affiliate of Investor;


5.       


Except
with regard to the Initial Closing only, the Company has duly authorized shares of Common Stock reserved for issuance
to Investor in an amount equal to thrice the number of shares sufficient to immediately issue all Conversion Shares
potentially issuable under this Agreement and any other agreements with Investor at such time;


6.       


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, other than Approval, nor is there any completed,
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, in progress,
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;


7.       


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, have been waived in writing; and


8.       


Except
with regard to the Initial Closing only, Company has obtained Approval and listing of all Conversion Shares on NYSE American. 




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D.       


Initial
Closing. Immediately when all conditions set
forth in Section II.C have been fully satisfied, Company will issue and sell to
Investor and Investor will purchase 106 Preferred Shares by payment to Company of $1,000,000.00, by wire transfer of
immediately available funds to an account designated by Company (the “Initial Closing”). 


E.       


Subsequent
Closings. Subject to the terms and conditions herein, at any one or more times, from time
to time after the Initial Closing, Company may in its sole and absolute discretion provide Investor with 10 days’ written
notice that Investor must purchase any number of Preferred Shares designated by Company, for payment of the Face Value less the
OID with respect to such shares (each, a “Subsequent Closing”); provided
that on each respective Subsequent Closing date, all conditions in Section II.C must
have been fully satisfied as of such date, and the Floor Price and Base Volume must have occurred since the prior Closing, and
that if such conditions and Base Volume are not met on the date initially set for such Closing, each Closing will occur as soon
thereafter as they are met. At each Subsequent Closing, Company will issue and deliver to Investor a Transfer Agent book entry
representing the purchased Preferred Shares, and Investor will purchase and make payment for the specified number of additional
Preferred Shares by payment to Company of the relevant amount by wire transfer of immediately available funds to an account designated
by Company.


Notwithstanding
the foregoing, (a) following a Trigger Event, Investor and (b) at any time, Company may by written notice terminate Company’s
right to sell, and  Investor’s right to purchase, additional Preferred Shares pursuant to the terms of this Section
II.E.






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, except where
the failure to do so would not reasonably be expected to result in a Material Adverse Effect. 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.




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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.


3.       


No
Conflicts. The execution, delivery and performance of the Transaction Documents by Company, the issuance and sale of the
Shares 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.
 Except as set forth in Schedule III.A.4, there is no action, suit,
inquiry, notice of violation, proceeding or investigation 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 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.




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5.       


Filings,
Consents and Approvals. Except as set forth in Schedule III.A.5, 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 Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens.


7.       


Disclosure;
Non-Public Information. Company will issue a press release and timely file a current report on Form 8-K (“Current
Report”) by 8:30 am Eastern time on the Trading Day after the Effective Date describing the material terms and conditions
of this Agreement, a copy of which will be provided to Investor prior to the Effective Date. 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 with respect to information that will be, and only to the extent that it actually
is, timely publicly disclosed by Company pursuant to the foregoing sentence, 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.
No information contained in the Disclosure Schedules constitutes material non-public information. There is no adverse material
information regarding Company that has not been publicly disclosed prior to the Effective 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. Except as set forth on Schedule III.A.9, 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.




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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 is not an Affiliate of, and immediately after receipt of payment for the Preferred Shares,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. Company will conduct its business in a manner so that it will not become subject to the Investment Company Act.


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, control person, to Company’s knowledge, 10% or greater shareholder, or otherwise an affiliate of Company
as defined under Rule 12b-2 of the Exchange Act;


b.       


Investor
and Investor’s representatives have not made and do not make any representations, warranties or agreements with respect
to the Shares, this Agreement, or the transactions contemplated by the Transaction Documents 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 Preferred Shares and resale of Conversion Shares will result in dilution, which may be substantial; the number of
Conversion Shares will increase in certain circumstances; and Company’s obligation to issue and deliver Conversion Shares
in accordance with this Agreement and the Certificate of Designations 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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13.       


Prior
Agreements. Investor has at all times fully and completely complied in all respects with the Prior Agreements. All Delivery
Notices and all calculations relating to the Prior Agreements provided to Company by Investor or its representatives prior to
the Effective Date of this Agreement were and are fully correct and accurate in all respects. All Delivery Notices and calculations
provided to Company by Investor or its representatives prior to the Effective Date are hereby acknowledged and deemed to be correct
for any and all purposes.


14.       


Approval. Company
will use its commercially reasonable best efforts to obtain an exception to any shareholder approval requirement from
NYSE American or to obtain approval and additional listing of all Conversion Shares.


15.       


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 facts or circumstances that, with the passage of time, would reasonably be expected to cause such disqualification.


16.       


Offshore
Transaction. Company has not, and will not, engage in any directed selling efforts in the United States in respect of
the Shares. Company and its Affiliates have complied, and will comply, with the offering restriction requirements of Regulation
S. Company has offered, and will offer, the Shares only to Investor.


17.       


Shell
Status. Company is not now and has never been a shell company as defined in Rule 12b-2 of the Exchange Act.


B.       


Representations
Regarding Company. Except as set forth in any Public Reports or attached exhibits as of
the Effective Date, or 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.       


Capitalization.
The capitalization of the Company as of the Effective Date 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 Shares,
the Prior Securities, or as otherwise disclosed on Schedule III.B.1, 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. 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. Except as disclosed on Schedule III.B.1,
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.




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2.       


Subsidiaries.
All of the direct and indirect subsidiaries of Company are set forth in the Public Reports or the corresponding section of
the Disclosure Schedules. Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary, and all of such directly or indirectly owned capital stock or other equity
interests are owned free and clear of any Liens. All the issued and outstanding
shares of capital stock of each Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive
and similar rights to subscribe for or purchase securities.


3.       


Public
Reports; Financial Statements. The Company has filed all required Public
Reports for the one year preceding the Effective Date. As of their respective
dates or as subsequently amended, the Public Reports complied in all material respects with the requirements of the Act and the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, as applicable, and none of the Public Reports,
when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The financial statements of Company included in the Public Reports, as amended, comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.


4.       


Material
Changes. Since the end of the most recent year for which an Annual Report on Form 10-K has been filed with the Commission,
except as disclosed on Schedule III.B.4, (a) there has been no event, occurrence or development that has had, or that would
reasonably be expected to result in, a Material Adverse Effect, (b) Company has not incurred any liabilities (contingent or otherwise)
other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice,
and (ii) liabilities not required to be reflected in Company’s financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (c) Company has not altered its method of accounting, (d) Company has not declared or made
any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock, and (e) Company has not issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company equity incentive plans. Company does not have pending before the Commission any request for
confidential treatment of information.




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5.       


Litigation.
 Except as disclosed on Schedule III.B.8, there is no Action completed,
pending, threatened or, to the knowledge of Company, contemplated, that would reasonably be expected to result in a Material Adverse
Effect. Neither Company nor any Subsidiary, nor any director or officer thereof, nor to the knowledge of Company any greater than
5% shareholder or any director or officer thereof, is or has been the subject of any Action involving a claim of violation of
or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, is not pending
or threatened, or to the knowledge of Company, is not contemplated, any investigation by the Commission, Department of Justice
or law enforcement involving Company or any current or former director or officer of Company, or to the knowledge of Company greater
than 5% shareholder of Company.


6.       


No
Bankruptcy. There has not been any petition or application filed, or any judicial or administrative proceeding commenced
which has not been discharged, by or against the Company or any Subsidiary or with respect to any of the properties or assets
of Company or any Subsidiary under any applicable law relating to bankruptcy, insolvency, reorganization, fraudulent transfer,
compromise, arrangement of debt, creditors’ rights and no assignment has been made by the Company or any Subsidiary for
the benefit of creditors.


7.       


Labor
Relations. No material labor dispute exists or, to the knowledge of Company,
is imminent with respect to any of the employees of Company, which would reasonably be expected to result in a Material Adverse
Effect.


8.       


Compliance.
Except as disclosed on Schedule III.B.8 with regard to the initial Closing only, neither
Company nor any Subsidiary (a) is in material default under or in material violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by Company or any Subsidiary under),
nor has Company or any Subsidiary received notice of a claim that it is in material default under or that it is in material violation
of, any indenture, loan or credit agreement or any other similar agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived), (b) is in violation of any order
of any court, arbitrator or governmental body, or (c) is or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to its business, except in each
case as would not reasonably be expected to have a Material Adverse Effect.


9.       


Regulatory
Permits. Company and each Subsidiary possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Public Reports,
except where the failure to possess such permits would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and neither Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any Material Permit.




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10.       


Title
to Assets. Except as disclosed on Schedule III.B.10, Company and each Subsidiary have good
and marketable title in fee simple to all real property owned by them that is material to the business of Company and each Subsidiary
and good and marketable title in all personal property owned by them that is material to the business of Company and each
Subsidiary, in each case free and clear of all Liens, except for Liens that do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by Company and each Subsidiary and
Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any
real property and facilities held under lease by Company and each Subsidiary are held by them under valid, subsisting and enforceable
leases of which Company and each Subsidiary are in compliance.


11.       


Patents
and Trademarks. Company and each Subsidiary have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other
similar rights that are necessary or material for use in connection with their respective businesses as described in the Public
Reports and which the failure to do so would have a Material Adverse Effect (collectively, “Intellectual Property Rights”).
Neither Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by Company or any
Subsidiary violates or infringes
upon the rights of any Person. To the knowledge of Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual Property Rights of Company or each Subsidiary.


12.       


Insurance.
 Company and each Subsidiary are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which Company and each Subsidiary are engaged, including
but not limited to directors and officers insurance coverage at least equal to the Purchase Amount. To Company’s knowledge,
such insurance contracts and policies are accurate and complete in all material respects. Neither Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue its business without an increase in cost that would
constitute a Material Adverse Effect.


13.       


Transactions
with Affiliates and Employees. None of the officers or directors of Company and, to the knowledge of Company, none of
the employees of Company is presently a party to any transaction with Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than (i) for payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of Company and (iii) for other employee
benefits, including stock option agreements under any equity incentive plan of Company.




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14.       


Sarbanes-Oxley;
Internal Accounting Controls. Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, which are applicable
to it as of the date of the Closing. Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of Company’s disclosure controls and procedures based on
their evaluations as of the evaluation date. Since the date of the most recently filed periodic Public Report, there have been
no significant changes in Company’s internal accounting controls or its disclosure controls and procedures or, to Company’s
knowledge, in other factors that could materially affect Company’s internal accounting controls or its disclosure controls
and procedures.


15.       


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.


16.       


Registration
Rights. Except as disclosed on Schedule III.B.16 no Person has any right to cause Company to effect the registration
under the Act of any securities of Company.


17.       


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.
Except as disclosed on Schedule III.B.17, Company has not, in the 12 months preceding the Effective Date, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that Company is not in compliance
with the listing or maintenance requirements of such Trading Market. Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements.


18.       


Application
of Takeover Protections. Company and its Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under Company’s Certificate of Incorporation (or similar charter documents) or
the laws of its state of incorporation that is or could become applicable to Investor as a result of Investor and Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation Company’s issuance
of the Shares and Investor’s ownership of the Shares.


19.       


Tax
Status. Company and each of its Subsidiaries has made or filed all federal,
state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate
for the payment of all unpaid and unreported taxes). Company has not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal, statute or local tax. None of Company’s tax returns is
presently being audited by any taxing authority. Company would not be classified as a PFIC for its most recently completed taxable
year, and does not expect to be classified as a PFIC for its current taxable year.




    	 	11	 



     

    

 


20.       


Foreign
Corrupt Practices. Neither Company, nor to the knowledge of Company, any agent or other person acting on behalf of Company,
has (a) directly or indirectly, used any corrupt 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 Company, or made by any person acting on its behalf of which 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.


21.       


Accountants.
Company’s accountants are set forth in the Public Reports and such
accountants are an independent registered public accounting firm.


22.       


No
Disagreements with Accountants or Lawyers. There are no material disagreements presently existing, or reasonably anticipated
by Company to arise, between Company and the accountants or lawyers formerly or presently employed by Company.


23.       


Powers
of Attorney. There are no outstanding powers of attorney executed on behalf of the Company or any Subsidiary, except such
as would not reasonably be expected to result in a Material Adverse Effect.


24.       


Computer
and Technology Security. Company has taken all reasonable steps to safeguard the information technology systems utilized
in the operation of the business of Company, including the implementation of procedures to minimize the risk that such information
technology systems have any disabling codes or instructions, timer, copy protection device, clock, counter or other limiting design
or routing and any back door, virus, malicious code or other software routines or hardware components that in each case permit
unauthorized access or the unauthorized disablement or unauthorized erasure of data or other software by a third party, and, to
Company’s knowledge, to date there have been no successful unauthorized intrusions or breaches of the security of the information
technology systems.


25.       


Data
Privacy. Company has: (a) complied with, and is presently in compliance with, all applicable laws in connection with data
privacy, information security, data security and/or personal information; (b) complied with, and is presently in material compliance
with, its policies and procedures applicable to data privacy, information security, data security, and personal information; (c)
not experienced any incident in which personal information or other sensitive data was or may have been stolen or improperly accessed;
and Company is not aware of any facts suggesting the likelihood of the foregoing, including without limitation, any breach of
security or receipt of any notices or complaints from any Person regarding personal information or other data.




    	 	12	 



     

    

 


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.  At the time Investor was offered the Preferred Shares, it was, and at the Effective Date it is: (a) an
accredited investor as defined in Rule 501(a) under the Act; and (b) 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.


4.       


Ownership.
 Investor is acquiring the Preferred Shares as principal for its own account. Investor will not engage in hedging transactions
with regard to the Conversion Shares unless in compliance with the Act. Investor will not resell, transfer or assign the Preferred
Shares, and will resell the Conversion Shares only pursuant to registration under the Act or an available exemption therefrom.


5.       


No
Short Sales. Neither Investor nor any Affiliate holds any short position in, nor has engaged in any Short Sales of the
Common Stock, or engaged in any hedging transactions with regard to the Shares prior to the Effective Date.


IV.       


Securities
and Other Provisions.


A.       


Investor
Due Diligence. Investor will have the right and opportunity to conduct customary due diligence
with respect to any Registration Statement or Prospectus in which the name of Investor or any Affiliate of Investor appears.




    	 	13	 



     

    

 


B.       


Furnishing
of Information. For as long as Investor owns any Shares, Company will timely file all reports
required to be filed by Company pursuant to the Exchange Act. As long as Investor owns any Shares, 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 Shares, 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.       


Integration.
Company will not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security, as defined in Section 2 of the Act, that would be integrated with the offer or sale of the Shares to Investor
for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing
of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.


D.       


Disclosure
and Publicity. Company will provide to Investor for review and approval prior to filing
or issuing any current, periodic or public report, proxy or registration statement, press release, public statement or communication
relating to or referencing Investor, any Transaction Documents or the transactions contemplated thereby.


E.       


Shareholders
Rights Plan. No claim will be made or enforced by Company or, to the knowledge of Company,
any other Person that Investor is an “Acquiring Person” under any shareholders rights plan or similar plan or arrangement
in effect or hereafter adopted by Company, or that Investor could be deemed to trigger the provisions of any such plan or arrangement,
in either such case, by virtue of receiving Shares under the Transaction Documents or under any other agreement between Company
and Investor. Company will conduct its business in a manner so that it will not become subject to the Investment Company Act of
1940, as amended.


F.       


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 may constitute material non-public information. Neither Investor nor any Affiliate of Investor has or 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 Conversion Shares.




    	 	14	 



     

    

 


G.       


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 an “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, (b) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, Prospectus, Prospectus Supplement, or any information
incorporated by reference therein, or arising out of or based upon any omission or alleged omission to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (c)
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 (i) a false statement of material fact contained within written information
provided by such Investor Party expressly for the purpose of including it in the applicable Registration Statement, Prospectus,
Prospectus Supplement, or (ii) 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.


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.




    	 	15	 



     

    

 


H.       


Shareholder
Approval. Company will file a preliminary proxy for stockholder approval of this
Agreement and the issuance of the Conversion Shares (“Approval”) at its
next annual meeting of stockholders. Company, its board of directors, and each of its officers and directors will vote all
common shares owned or controlled by them and all proxies given to them in favor of the proposal. Company will at all times
maintain a reserve from its duly authorized Common Stock for issuance pursuant to the Transaction Documents, authorized
shares of Common Stock in an amount equal to thrice the number of shares sufficient to immediately issue all Conversion
Shares potentially issuable at such time. 


I.       


Activity
Restrictions. Investor hereby grants an irrevocable proxy to Company’s board of directors
to vote all Conversion shares beneficially owned or controlled by Investor as of the record date in favor of Approval. Except
for the foregoing, 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 beneficially owned or controlled by it, sign or solicit any proxies, 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.       


No
Shorting. Provided no Trigger Event has occurred, for so long as Investor holds any Shares,
neither Investor nor any of its Affiliates will engage in or effect, directly or indirectly, any 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. Investor may not sell, transfer or assign any Preferred
Shares or any of its rights under this Agreement.




    	 	16	 



     

    

 


K.       


Stock
Splits. If Company at any time on or after the Effective Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) or combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater or lesser number of shares, the share numbers, prices and other amounts
set forth in this Agreement, as in effect immediately prior to such subdivision or combination, will be proportionately reduced
or increased, as applicable, effective at the close of business on the date the subdivision or combination becomes effective.


L.       


Subsequent
Financings. As long as Investor holds any Preferred Shares, Company will not: (1) enter
into any agreement that in any way restricts its ability to enter into any agreement, amendment or waiver with Investor, including
without limitation any agreement to offer, sell or issue to Investor any preferred stock, common stock or other securities of
Company; (2) issue or enter into or amend an agreement pursuant to which it may issue any shares of Common Stock, other than (a)
for restricted securities with no registration rights, (b) in connection with a strategic acquisition, (c) in an underwritten
public offering, or (d) at a fixed price; or (3) issue or amend any debt or equity securities convertible into, exchangeable or
exercisable for, or including the right to receive, shares of Common Stock (a) at a conversion price, exercise price or exchange
rate or other price that is based upon or varies with, the trading prices of or quotations for the shares of Common Stock at any
time after the initial issuance of the security or (b) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of the security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for the Common Stock. For sake of clarity, Company
may enter into an unregistered financing of debt or restricted stock at any fixed price with no registration rights.


M.       


Principal
Market. Company will timely submit all necessary notification and supporting documentation
required for the listing of all possible Conversion Shares with NYSE American and will use its commercially reasonable best efforts
to obtain approval to list the Conversion Shares as soon as practicable. 


N.       


Restrictive
Legend. The Shares have not been registered under the Act and may not be resold in the United
States unless registered or an exemption from registration is available. Company is required to refuse to register any transfer
of the Conversion Shares not made pursuant to registration under the Act or an available exemption from registration. Upon the
issuance thereof, and only until such time as the same is no longer required under the applicable securities laws and regulations,
the certificates representing any of the Shares will bear a legend in substantially the following form:


THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS
SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE ACT. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
unless in compliance with the ACT.




    	 	17	 



     

    

 


Certificates
representing Conversion Shares will be issued without such legend or at Investor’s option issued by electronic delivery
at the applicable balance account at DTC, if either (i) the Conversion Shares are registered for resale under the Act, or (ii)
Investor provides an opinion of its counsel to the effect that the Conversion Shares may be issued without restrictive legend.


O.       


Prior
Securities. Investor acknowledges and agrees that a Trigger Event occurred with respect to all of the Prior
Securities, except for the October 2018 Securities. Investor acknowledges and agrees that, as of the Effective Date, no
Trigger Event has occurred with respect to the Preferred Shares being issued pursuant to the October 2018
Securities or this Agreement.


P.       


Repurchase
Right. Provided Company has not materially breached this Agreement, Company may at any time,
in its sole and absolute discretion, repurchase from Investor all, but not less than all, then outstanding Preferred Shares issued
pursuant to this Agreement by paying to Investor 110.0% of the aggregate Face Value of all such shares, by wire transfer of immediately
available funds to an account designated by Investor.


Q.       


Piggyback
Registration Rights. Company will include on the next registration statement Company files
with the Commission, or on the subsequent registration statement if such registration statement is withdrawn, all potentially
issuable Conversion Shares.


R.       


Right
of First Refusal. If at any time while any Preferred Shares are outstanding, Company has
a bona fide offer of equity capital or financing from any person, that Company intends to act upon, then Company must first offer
such opportunity to Investor to provide such capital or financing to Company on the same terms as each respective person’s
terms. Except as otherwise provided in any Transaction Documents, should Investor be unwilling or unable to provide such capital
or financing to Company within 10 Trading Days from Investor’s receipt of written notice of the offer from Company, then
Company may obtain such capital or financing from that respective person upon the exact same terms and conditions offered by Company
to Investor, which transaction must be completed within 90 days after the date of the notice. If Company does not receive the
capital or financing from the respective person within 90 days after the date of the respective notice, then Company must again
offer the capital or financing opportunity to Investor as described above, and the process detailed above shall be repeated. Notwithstanding
anything to the contrary in the foregoing, this provision shall not apply to a debt financing that is not convertible to stock.



S.       


Favored
Nations. So long as any Preferred Shares are outstanding, upon any issuance by Company or
any of its subsidiaries of any security with any term more favorable to the holder of such security or with a term in favor of
the holder of such security that was not similarly provided to Investor, then Company will notify Investor of such additional
or more favorable term and such term, at Investor’s option, shall become a part of the transaction documents with Investor.
The types of terms contained in another security that may be more favorable to the holder of such security include, but are not
limited to, terms addressing conversion discounts, prepayment rate, conversion look back periods, interest rates, original issue
discounts, stock sale price, private placement price per share, and warrant coverage.


T.       


Use
of Proceeds. The proceeds from the Purchase Amount will be used by Company as set forth
in the Disclosure Schedule.




    	 	18	 



     

    

 


V.       


General
Provisions.


A.       


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, (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, 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.


B.       


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.


C.       


No
Third-Party Beneficiaries. Except as otherwise set forth in Section IV.G,
this Agreement and the Transaction Documents will inure solely to the benefit of the parties hereto, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person. Other than the Investor Parties described in Section
IV.G, a Person who is not a party to this Agreement will not have any rights under the Contracts
(Rights of Third Parties) Law, 2014 of the Cayman Islands to enforce any term of this Agreement or any Transaction Document.


D.       


Fees
and Expenses. Except as otherwise provided in this Agreement, each party will pay the fees
and expenses of its own advisers, counsel, 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.


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.




    	 	19	 



     

    

 


F.       


Replacement
of Certificates. If any certificate or
instrument evidencing any Shares 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.


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 Cayman 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 International, 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 may in its sole discretion bring an action in the U.S. District Court for the Southern District of Texas or the Southern
District of New York in aid of arbitration. 




    	 	20	 



     

    

 


I.       


Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including
recovery of damages, each of Investor and Company will be entitled to specific performance under the Transaction Documents, and
equitable and injunctive relief to prevent any actual or threatened breach under the Transaction Documents, to the full extent
permitted under applicable laws. Without limitation of the foregoing, Company acknowledges and agrees that the rights and benefits
of Investor pursuant to Section I.G.1. of the Certificate of Designations are unique and that no adequate remedy exists at law
if Company breaches or fails to timely perform any of its obligations thereunder, that it would be difficult to determine the
amount of damages resulting therefrom, that it would cause irreparable injury to Investor, and that any potential harm to Company
would be adequately and fully compensable with monetary damages. Accordingly, Investor will be entitled to a compulsory remedy
of immediate specific performance, temporary, interim, preliminary and final injunctive relief to enforce the provisions thereof,
including without limitation requiring Company and its transfer agent, attorneys, officers and directors to immediately take all
actions necessary to issue and deliver the number of Conversion Shares stated by Investor, which requirements will not be stayed
for any reason, without the necessity of posting any bond. Company hereby absolutely, unconditionally and irrevocably waives all
objections and rights to oppose any motion, application or request by Investor to issue any number of Conversion Shares, and all
rights to stay or appeal any resulting order, and any opposition or appeal by Company or on its behalf will be immediately and
automatically dismissed. In addition, Company acknowledges and agrees that it would have an adequate remedy at law for any violation
of Section I.G.1. of the Certificate of Designations by Investor, that it would not be difficult to determine the amount of damages
resulting therefrom, that it would not cause irreparable injury to Company, and that any potential harm to Company would be adequately
and fully compensable with monetary damages. Accordingly, Company will not be entitled any equitable relief to restrain the provisions
thereof, including without limitation preventing Investor, Investor’s brokers or Company’s transfer agent from issuing,
receiving or reselling Conversion Shares. Company hereby absolutely, unconditionally and irrevocably waives all rights to bring
any action, motion, application or request to enjoin any issuance of Conversion Shares, and any action or motion by Company or
on its behalf will be immediately and automatically dismissed. Nothing provided for in this provision will limit either party’s
ability to recover monetary damages.


J.       


Payment
Set Aside. To the extent that Company makes a payment or payments to Investor pursuant to
any Transaction Document or Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to Company, a trustee, receiver
or any other person under any law, including, without limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action, then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied
will be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had
not occurred.


K.       


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.


L.       


Time
of the Essence. Time is of the essence with respect to all provisions of this Agreement
and all Transaction Documents.


M.       


Survival.
The representations and warranties contained herein will survive the Closing and the delivery
of the Shares until all Preferred Shares issued to Investor have been converted or repurchased. 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.


N.       


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.




    	 	21	 



     

    

 


O.       


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. 


P.       


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.


Q.       


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. 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.




    	 	22	 



     

    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories
on the Effective Date.


Company:


CAMBER
ENERGY, INC.





	By:		 	 
	Name:		 	 
	Title:		 	 



 


Investor:





	




	 	 
	Investor
Name	 



 


 





	By:	




	 	 
	Name:	




	 	 
	Title:		 	 














    	 	23	 



     

    




Exhibit
1


Glossary
of Defined Terms


“$”
means the currency of the United States of America, in which all dollar amounts in the Transaction Documents will be expressed.


“Act”
means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.


“Action”
has the meaning set forth in Section III.A.4.


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with a Person, as such terms are used in and construed under Rule 144 under the Act.


“Agreement”
means this Stock Purchase Agreement.


“Approval”
has the meaning set forth in Section IV.H.


“Base
Volume” means, with respect to each Closing after the Initial Closing, for each $1 million in Purchase amount, an
aggregate dollar trading volume of at least $10 million has traded on NYSE American during regular trading hours, from
the Trading Day after the immediately prior Closing until the Trading Day immediately before the relevant Closing,
but expressly excluding all volume traded on any Excluded Days.


“Certificate
of Designations” means the Certificate of Designation for Series C Redeemable Convertible Preferred Stock filed by Company
with the Secretary of State of the State of Nevada on August 25, 2016, Document Number 00010398344-82, as amended to date.


“Closing”
means the Initial Closing and each Subsequent Closing.


“Commission”
means the U.S. Securities and Exchange Commission.


“Common
Stock” means the Common Stock of Company and any replacement or substitute thereof, or any share capital into which
such Common Stock will have been changed or any share capital resulting from a reclassification of such Common Stock.


“Company”
has the meaning set forth in the first paragraph of the Agreement.


“Conversion
Shares” includes all shares of Common Stock potentially issuable in relation to the Preferred Shares, including Common
Stock that must be issued upon conversion of any Preferred Shares, and Common Stock that must or may be issued in payment of any
Dividends or Conversion Premium (as defined in the Certificate of Designations).


“Disclosure
Schedules” means the disclosure schedules of Company delivered concurrently herewith. The Disclosure Schedules will
contain no material non-public information.




    	 	24	 



     

    

 


“DTC”
means The Depository Trust Company, or any successor performing substantially the same function for Company.


“Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission
thereunder.


“Excluded
Days” include any and all Trading Days on which Investor is prevented, delayed or unable to resell any Common Stock,
including without limitation any Conversion Shares issued pursuant to this Agreement or any other agreement with Investor into
the open market for any reason whatsoever, including without limitation Investor has issued a Delivery Notice but has not received
the number of Conversion Shares stated in the notice in electronic form and fully cleared for trading.


“Effective
Date” has the meaning set forth in the first paragraph of the Agreement.


“Equity
Conditions” has the meaning set forth in the Certificate of Designations.


“Floor
Price” means, with respect to each subsequent Closing, a volume weighted average price on NYSE American for the prior
Trading Day of at least $0.10 per share of Common Stock.


“GAAP”
means U.S. generally accepted accounting principles applied on a consistent basis during the periods involved.


“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $500,000, other than trade accounts payable incurred
in the ordinary course of business, (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness
of others, whether or not the same are or should be reflected in Company’s
balance sheet, or the notes thereto, except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, and (c) the present value of any lease payments in excess of $500,000 due under
leases required to be capitalized in accordance with GAAP.


“Investor”
has the meaning set forth in the first
paragraph of the Agreement.


“Intellectual
Property Rights” has the meaning set forth in Section III.B.10.


“Legal
Opinion” has the meaning set forth in Section I.B.3.


“Liens”
means (a) a lien, charge, security interest or encumbrance in excess of $500,000, or (b) a right of first refusal, preemptive
right or other restriction (other than restrictions under securities laws).


“Material
Adverse Effect” includes any material adverse effect on (a) the legality, validity or enforceability of any Transaction
Document, or (b) the results of operations, assets, business, or financial condition of Company and the Subsidiaries, taken as
a whole, which is not disclosed in the Public Reports prior to the Effective Date, or (c) Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document or (d) the sale, issuance, registration,
listing, resale and trading on the Trading Market of the Conversion Shares.




    	 	25	 



     

    

 


“Material
Permits” has the meaning set forth in Section III.B.8.


“October
2018 Securities” means those shares of Preferred sold by Company to Investor
in October 2018.


“Officer’s
Certificate” has the meaning set forth in Section II.B.4.


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government, or an agency or subdivision thereof, or other entity of any kind.


“Preferred”
means the Series C Redeemable Convertible Preferred Stock of the Company.


“Preferred
Shares” means the shares of Preferred Stock to be issued to Investor pursuant to this Agreement.


“Prior
Agreements” means all Stock Purchase Agreements and Securities Purchase Agreements for the sale of the Prior Securities,
and all Transaction Documents related thereto.


“Prior
Securities” include the $530,000 face amount redeemable convertible subordinated debenture, $4.5 million common stock
purchase warrant, and all shares of Preferred previously issued in connection with the Prior Agreements.


“Public
Reports” includes all reports filed or required to be filed by Company under the Act or the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two full fiscal years preceding the Effective Date and thereafter.


“Purchase
Amount” has the meaning set forth in Section II.A.1.


“Regulation
D” means Regulation D under the Securities Act and the rules promulgated by the Commission thereunder.


“Regulation
S” means Regulation S under the Securities Act and the rules promulgated by the Commission thereunder.


“Secretary’s
Certificate” has the meaning set forth in Section II.B.5.


“Shares”
include the Preferred Shares and the Conversion Shares.


“Short
Sale” means a “short sale” as defined in Rule 200 of Regulation SHO of the Exchange Act.







    	 	26	 



     

    

 


“Subsidiary”
means any Person owned or controlled by the Company, or in which Company, directly or indirectly, owns a majority of the capital
stock or similar interest that would be disclosable pursuant to Regulation S-K, Item 601(b)(21).


“Trading
Day” means any day on which the Common Stock is traded on the Trading Market; provided that it will not include any
day on which the Common Stock is (a) scheduled to trade for less than 5 hours, or (b) suspended from trading.


“Trading
Market” has the meaning set forth in the Certificate of Designations.


“Transaction
Documents” means this Agreement, the Certificate of Designations, and the other agreements, certificates and documents
referenced herein or the form of which is attached hereto, and the exhibits, schedules and appendices hereto and thereto.







    	 	27	 



     

    

 


Exhibit
2


Legal
Opinion


1.       


The
Company is a corporation validly existing and in good standing under the laws of the state of its incorporation.


2.       


The
Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Transaction
Documents, to sell and issue the Shares under the Purchase Agreement and to issue the Common Stock issuable upon conversion of
the Shares pursuant to the Certificate of Designations (the “Conversion Shares”).


3.       


The
Shares have been duly authorized by the Company, and upon issuance and delivery against payment therefor in accordance with the
terms of the Purchase Agreement, the Shares will be validly issued, fully paid and nonassessable. The Conversion Shares issuable
upon conversion of the Shares have been duly authorized and reserved for issuance, and upon issuance and delivery upon conversion
thereof in accordance with the terms of the Certificate of Designations, will be validly issued, fully paid and nonassessable.
The rights, preferences and privileges of the Shares are as stated in the Certificate of Designation. Such issuance of the Shares
and the Conversion Shares will not be subject to any statutory or, to our knowledge, contractual preemptive rights of any stockholder
of the Company.


4.       


The
execution, delivery and performance of the Transaction Documents have been duly authorized by all necessary corporate action on
the part of the Company, and the Transaction Documents have been duly executed and delivered by the Company.


5.       


Each
Transaction Document constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws affecting creditors’ rights, and subject to general equity principles and to limitations on availability
of equitable relief, including specific performance.


6.       


The
execution and delivery of the Transaction Documents by the Company does not, and the Company’s performance of its obligations
thereunder will not (a) violate the Certificate of Incorporation or the Bylaws, each as in effect on the date hereof, (b) violate
in any material respect any federal or Nevada state law, rule or regulation, or judgment, order or decree of any state or federal
court or governmental or administrative authority, in each case that, to our knowledge, is applicable to the Company or its properties
or assets (except to the extent such violation 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 (c) to our knowledge, require the authorization, consent, approval of or other action of, notice
to or filing or qualification with, any Nevada state or federal governmental authority, except (i) as have been, or will be prior
to the Closing, duly obtained or made, (ii) any filings which may be required under applicable federal securities, state securities
or blue sky laws, and (iii) the filing and effectiveness of the Registration Statement, except to the extent failure to be so
obtained or made would not have a material adverse effect on the Company’s business, properties, assets, financial condition
or results of operations or its ability to consummate the transactions contemplated under the Transaction Documents. 


7.       


The
Company is not, and immediately after the consummation of the transactions contemplated by the Transaction Documents will not
be, an investment company within the meaning of Investment Company Act of 1940, as amended.


8.       


To
our knowledge, there is no claim, action, suit, proceeding, arbitration, investigation or inquiry, pending or threatened, before
any court or governmental or administrative body or agency, or any private arbitration tribunal, against the Company that challenges
the validity or enforceability of, or seeks to enjoin the performance of, the Transaction Documents.




    	 	 	 



    	 



    

 


Exhibit
3


Form
of Officer’s Certificate


CAMBER
ENERGY, INC.


November
23, 2018


The
undersigned hereby certifies that:


The
undersigned is the duly appointed Chief Executive Officer of Camber Energy, Inc., a Nevada corporation (“Company”).


This
Officer’s Certificate (“Certificate”) is being delivered to _________________
(“Investor”), by Company, to fulfill the requirement under the Stock Purchase Agreement, dated November 23, 2018, between Investor and Company (“Agreement”). Terms used and not defined in this Certificate have
the meanings set forth in the Agreement.


The
representations and warranties of Company set forth in Sections III.A and III.B of the Agreement are true and correct in all material
respects as if made on the above date (except for any representations and warranties that are expressly made as of a particular
date, in which case such representations and warranties will be true and correct in all material respects as of such particular
date), and no default has occurred under the Agreement, or any other agreement with Investor or any Affiliate of Investor.


Company
is not, and will not be as a result of the Closing, in default of the Agreement, any other agreement with Investor or any Affiliate
of Investor.


All
of the conditions to the Closing required to be satisfied by Company prior to the Closing have been satisfied in their entirety.


IN
WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as of the date set forth above.


	Signed:	 	 	 
	Name:	 	 	 
	Title:	 	 	 



 


 




    	 	 	 



    	 



    

 


Exhibit
4


Form
of Secretary’s Certificate


November
23, 2018


The
undersigned hereby certifies that:


The
undersigned is the duly appointed Secretary of Camber Energy, Inc., a Nevada corporation (the “Company”).


This
Secretary’s Certificate (“Certificate”) is being delivered to _____________
(“Investor”), by Company, to fulfill the requirement under the Stock Purchase Agreement, dated November 23, 2018, between Investor and Company (“Agreement”). Terms used and not defined in this Certificate have
the meanings set forth in the Agreement.


Attached
hereto as Exhibit “A” is a true, correct and complete copy of the Certificate of Incorporation of Company,
as in effect on the Effective Date.


Attached
hereto as Exhibit “B” is a true, correct and complete copy of the Bylaws of Company, as in effect on the Effective
Date.


Attached
hereto as Exhibit “C” is a true, correct and complete copy of the resolutions of the Board of Directors of
Company authorizing the Agreement, the Transaction Documents, and the transactions contemplated thereby. Such resolutions have
not been amended or rescinded and remain in full force and effect as of the date hereof.


IN
WITNESS WHEREOF, the undersigned has executed this Secretary’s Certificate as of the date set forth above.


 


	Signed:	 	 	 
	Name:	 	 	 
	Title: