Camber Energy Inc. 8-K


Exhibit 10.1


 


COMPROMISE
SETTLEMENT AGREEMENT


AND
MUTUAL RELEASE


 


This
Compromise Settlement Agreement and Mutual Release (“Agreement”) is
made and entered into by and between CAMBER ENERGY, INC. f/k/a Lucas Energy, Inc. (“Camber”), on one side, and SEGUNDO
RESOURCES, LLC (“Segundo”), on the other (jointly “the Parties”).


 


WHEREAS,
on or about December 30, 2015, Camber, for itself, and Segundo, for itself as a Seller and Seller Representative for other named
sellers identified on Exhibit 1 hereto (not including Segundo, the “Other Sellers”), entered into, an Asset Purchase
Agreement (as amended and modified to date, the “APA”).


 


WHEREAS,
on or about March 29, 2017, Paul Pinkston, Camber’s Chief Accounting Officer, made demand upon Segundo as the Seller Representative
and a Seller, for payment of One Million One Hundred Sixty-One Thousand, Eight Hundred Fifty-Six Dollars and Nineteen Cents ($1,161,856.19)
which Camber claimed were due and owing to Camber under the terms of the APA and amendments thereto.


 


WHEREAS,
in response to Camber’s demand for payment, Segundo, as a Seller and as Seller Representative, asserted a counter-claim
and offset against Camber for One Million Nine Hundred Seventy-Two Thousand, Ninety-Two Dollars and Thirty-Nine Cents ($1,972,092.39)
for lost equity arising from unpaid pre-closing liabilities, unpaid revenue from assets, and unpaid consideration.


 


WHEREAS
the Parties have engaged in protracted efforts to settle their disputes and desire to compromise and settle all dispute(s)
arising from or related to the APA transactions and other claims between the Parties; and


 




     


     


    

 


WHEREAS
the Parties desire to enter into this Agreement in full settlement, compromise and discharge of all claims and controversies
existing as of the Effective Date.


 


NOW,
THEREFORE, for and in consideration of the premises, and the mutual covenants and promises made herein, the Parties agree
as follows:


 


1.          Consideration
for Agreement. Each of the Parties is receiving valuable consideration for the execution of this Agreement, the adequacy
and sufficiency of which is acknowledged by each of said Parties, their directors, managers, members, officers, principals,
shareholders, successors, and/or assigns, and such consideration is actual and not a mere recital. Segundo also acknowledges
that Camber is entering into this Agreement partially in consideration for N&B Energy, LLC, entering into an Asset
Purchase Agreement with Camber, on or around the date hereof.


 


2.          Conditions.
As partial consideration for the performance of this Agreement, upon execution of this Agreement, Segundo shall surrender to Camber,
together with a blank stock power with medallion signature guaranty, Fifteen Thousand Two Hundred Thirty-Seven (15,237) shares
of Camber common stock valued at a pre-split closing price of Three Dollars and Five Cents ($3.05) per share, with a post-split
price of Seventy-Six Dollars and Twenty-Five Cents ($76.25) per share, effective as of April 1, 2016, and to release Camber from
all claims, including Segundo’s claim for One Million Nine Hundred Seventy-Two Thousand, Ninety-Two Dollars and Thirty-nine
Cents ($1,972,092.39).


 






    
Compromise Settlement Agreement and Mutual Release
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3.
        Full Release of Camber. As further and additional consideration for
the execution of this Agreement, Segundo, for itself, its directors, employees, managers, members, officers, principals, shareholders,
lawful representatives, authorized agents, attorneys, successors, and assigns, and as Seller Representative for each of the other
named sellers identified on Exhibit 1 (“Other Sellers”), attached hereto, their respective directors, employees, managers,
members, officers, principals, shareholders, authorized agents, attorneys, lawful representatives, successors, and assigns, does
hereby release, acquit and forever discharge Camber Energy, Inc., and its principals, managers, members, officers, authorized
agents, employees, directors, officers, subsidiaries, attorneys and lawful representatives of and from any and all actions, awards,
causes of action, claims, controversies, demands, judgments, liabilities, or other obligations arising out of or related to the
performance of any and all transactions and agreement contained in, arising from, and related to the APA, whether directly or
indirectly, and all other claims, known or unknown, that were existing or otherwise could have been asserted on or before the
Effective Date by Segundo as a Seller or Seller Representative against Camber Energy, Inc., and its principals, managers, members,
officers, authorized agents, employees, directors, officers, subsidiaries, attorneys and lawful representatives.


 


4.          Full
Release and Discharge of Segundo.  As further and additional consideration for the execution of this Agreement, Camber,
for itself, its directors, employees, managers, members, officers, principals, shareholders, lawful representatives, authorized
agents, attorneys, successors, and assigns, does hereby release, acquit and forever discharge Segundo and the Other Sellers, and
their principals, managers, members, officers, authorized agents, employees, directors, officers, subsidiaries, attorneys and
lawful representatives of and from any and all actions, awards, causes of action, claims, controversies, demands, judgments, liabilities,
or other obligations arising out of or related to the performance of any and all transactions and agreement contained in, arising
from, and related to the APA, whether directly or indirectly, and all other claims, known or unknown, that were existing or otherwise
could have been asserted on or before the Effective Date by Camber against Segundo, the Other Sellers, and their principals, managers,
members, officers, authorized agents, employees, directors, officers, subsidiaries, attorneys and lawful representatives.


 






    
Compromise Settlement Agreement and Mutual Release
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5.          Indemnification.
As additional consideration for Camber agreeing to the terms of this Agreement, Segundo shall indemnify and hold Camber, and its
officers, directors, representatives, attorneys and assigns (collectively, the “Indemnified Parties”) harmless from
and against any and all claims, losses, damages, deficiencies, liabilities (joint or several), lawsuits, judgments, attorneys’
fees and expenses arising out of or related to the performance of any and all transactions and agreement contained in, arising
from, and related to the APA, whether directly or indirectly, and all other claims, known or unknown, that were existing or otherwise
could have been asserted on or before the Effective Date by Other Sellers related to the APA (collectively “Damages”).


 


6.          Rights
Reserved. The releases contained in this Agreement expressly shall not extend to nor otherwise operate to relieve any party
or person from the failure to perform the obligations set forth in this Agreement.


 


7.          No
Admission of Liability. Each Party acknowledges and agrees that this Agreement is a compromise and neither this Agreement,
nor any consideration provided pursuant to this Agreement, shall be taken or construed to be an admission or concession by either
Party of any kind with respect to any fact, liability, or fault except as may be expressly set forth herein. This Agreement and
the terms and conditions hereof shall be prohibited from use and non-admissible as evidence or proof of liability or for any other
reason pursuant to Rule 408 of the Federal Rules of Evidence, as amended from time to time and any similar state rules of evidence.


 


8.          Further
Assurances. The Parties agree that, from time to time, each of them will take such other action and to execute, acknowledge
and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out
the purposes and intent of this Agreement and the transactions contemplated herein.


 






    
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9.           Signatories’
Warranties and Representations. Each of the persons that is a signatory hereto warrants, and represents that said person and
the party for which said person is a representative or signatory:


 


		A.	Fully
                                         understands the scope and effect of all terms and conditions of this Agreement and its
                                         attachments and desires to be bound by this Agreement.



 


		B.	Acknowledges,
                                         warrants
                                         and represents that the terms of this Agreement are clear and unambiguous.



 


		C.	Is
                                         empowered with the full and complete authority to execute this Agreement and to release,
                                         compromise,
                                         or
                                         discharge any and all of the aforementioned claims,
                                         causes
                                         of action, and other rights herein
                                         released,
                                         compromised, or discharged on behalf of the party for which said person is signing.



 


		D.	Is
                                         legally
                                         competent
                                         to execute this document
                                         and
                                         accepts full responsibility
                                         therefor
                                         and assumes the risk of any mistake of facts stated
                                         herein.



 


		E.	Has
                                         entered
                                         into
                                         this Agreement of said party’s
                                         own free will and in accordance with said party’s own judgment, and after consultation
                                         with said party’s legal
                                         counsel.



 


		F.	Has
                                         not been
                                         induced
                                         to enter into this Agreement by any statement, act, or representation of any kind or
                                         character on the
                                         part of
                                         any other party except as expressly stated
                                         in
                                         this Agreement and any attachment hereto.



 


		G.	Expressly
                                         assumes
                                         any and all risk that the
                                         facts
                                         and law may be or become
                                         different
                                         from the
                                         facts
                                         and law
                                         as
                                         it is now known to,
                                         or
                                         believed
                                         to be
                                         by, the Parties as of the Effective Date of this Agreement.



 


		H.	Acknowledges
                                         that no promise or inducement
                                         has been
                                         offered,
                                         except as set forth herein, and that
                                         this
                                         document was executed without reliance upon any statement
                                         or
                                         representation by any of the persons or entities released concerning the nature or extent
                                         of any injuries, losses,
                                         damages,
                                         and liabilities
                                         therefore.



 






    
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		I.	Acknowledges,
                                         warrants and represents that this Agreement was drafted by both of the Parties and, thus,
                                         shall not be construed against any party because that party initially drafted any particular
                                         provision.



 


		J.	Acknowledges,
                                         warrants and represents that said party i)
                                         has
                                         no knowledge of any claim of said party against any of the other Parties to this Agreement
                                         released by a Party herein
                                         that
                                         has arisen since the Effective Date of this Agreement; ii) has not assigned any claims
                                         or causes of actions purported to be released herein; and iii) has not committed any
                                         wrongful act or omission against any of the other Parties who are released by
                                         said
                                         party
                                         herein between the Effective Date and the date of signing of this Agreement by the signing
                                         party.



 


		K.	Has
                                         not
                                         asserted or filed,
                                         and will not assert or file any new claims, complaints and/or lawsuit(s) or otherwise
                                         initiate or prosecute any proceedings against any member of the party(ies) (or any existing
                                         entity affiliated with said party) in this or any other court,
                                         governmental
                                         agency or tribunal for any act or occurrence that is released herein.



 


		L.	Is
                                         not currently aware of any basis for any claims, complaints or lawsuits that are not
                                         released in Agreement.



 


		M.	Acknowledges
                                         and represents that said party has not
                                         sold,
                                         assigned, transferred, conveyed,
                                         encumbered,
                                         or otherwise disposed of any of the claims,
                                         demands,
                                         or
                                         causes of action referred to in and released by this Agreement.



 


		N.	Understands
                                         and agrees that all persons, corporate and natural,
                                         released
                                         as a result of said
                                         party’s
                                         signature of this Agreement may act in reliance upon the covenants,
                                         warranties,
                                         and
                                         representations made herein by the other signatories.



 


10.         Merger
Provision. This Agreement contains the entire understanding of Camber and Segundo with respect
to the subject-matter hereof, and all prior oral or written
agreements or understandings between them, if any, are
merged herein. There are no representations, agreements,
arrangements or understandings, oral
or written, between or among the Parties hereto, relating to the subject matter in the Arbitration or this Agreement which are
not fully expressed herein and no alleged representation, warranty, condition, understanding or agreement of any kind with respect
to the subject matter in the Arbitration or this Agreement shall be relied upon by the Parties except
those contained herein.


 






    
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11.          Modifications/Binding
Effect. This Agreement may not be amended, supplemented or modified,
nor shall any obligation hereunder or condition hereof be deemed waived except
by a written instrument to such effect, signed by the party to be charged. All
of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Parties, the signatories,
and their respective successors, heirs, personal representatives and assigns.


 


12.          Severability.
In the event that any provision hereof shall for any reason
be held or otherwise determined to invalid illegal, invalid, unenforceable, or void,
to the extent permitted by applicable law, such
provision shall be deemed to be severed from this Agreement
and the remainder of this Agreement shall remain in full force and effect.
The Parties hereto agree to negotiate in good faith an enforceable, valid substitute provision that
most nearly achieves the intent of such provision. Furthermore, in lieu of each illegal, unenforceable,
or void provision there shall be added automatically as
part of this Agreement a provision as similar in
terms to such illegal, enforceable, or void provision as may be possible and be legal, enforceable
and valid.


 


13.          Survival.
All of the representations, and warranties contained herein shall survive the execution of this Agreement and the
transactions contemplated herein.


 


14.          Governing
Law and Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas and
United States of America. Venue shall lie in Houston, Harris County, Texas.


 






    
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15.          Arbitration
of Disputes. Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be submitted
to arbitration under the laws of the State of Texas, administered in accordance with the American Arbitration Association’s
Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof within sixty (60) days of final hearing thereon by the arbitrator, who shall render a reasoned award. The prevailing party(ies)
shall be entitled to recover their reasonable attorney’s fees and expenses in an amount to be determined by the arbitrator.


 


16.          Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall have
the same force and effect as an original, and all of which together shall constitute one and the same agreement and an effective,
binding agreement on the part of each of the undersigned.
Signatures of the Parties transmitted by e-mail in PDF format or by facsimile shall be deemed to be their original signatures
for all purposes.


 


17.          Effectiveness.
This Agreement shall be effective as of the date of July 12, 2018 (the “Effective Date”).


 


IN
WITNESS THEREOF, the
Parties and signatories, individually and by their officer(s) or other duly authorized representative(s), have
executed this
Agreement in multiple originals.


 





	 	 	 	 	 
	CAMBER ENERGY, INC.	 	SEGUNDO RESOURCES, LLC 

AS SELLER
	 	 	 	 	 
	By: 	 /s/
    Louis G. Schott	  	By: 	 /s/
    Richard N. Azar II


 

	Name: 	 Louis
    G. Schott	 	Name: 	 Richard
    N. Azar


 

	Title: 	 Interim
    Chief Executive Officer	 	Title: 	 Manager


 

	Date: 	 July
    12, 2018	 	Date: 	 July
    12, 2018







 






    
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		SEGUNDO RESOURCES, LLC 

AS SELLER
    REPRESENTATIVE
	 	 	 
	 	By: 	 /s/
    Richard N. Azar II
	 	 	 
	 	Name: 	Richard N. Azar
	 	 	 
	 	Title: 	Manager
	 	 	 
		Date: 	 July
    12, 2018




 




    
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EXHIBIT
1


 


	Other
    Seller Names
	Al
    Thaggard
	Alan
    Dreeben
	RAD2
    Minerals, Ltd.
	Azar-Dreeben
    A&D Fund, LP
	Ben
    Azar
	Branch
    Energy Services, LLC
	Buschman
    Energy, Ltd.
	Coyle
    Manna Management LLC
	DBS
    Investments, Ltd.
	Dudley
    Energy, Ltd.
	GBC
    Minerals, Ltd.
	Guy
    R. Buschman, Trustee
	John
    W. Taylor
	Julian
    Stewart
	Kristen
    B. Hicks, Trustee of the Kristen B. Hicks Portions B Trust
	Larry
    and Judy Votaw
	Azar,
    MPII & Range A&D Fund, LP
	Rockin’
    S FLP, Ltd.
	Saxum
    Energy, LLC
	Scott
    Lake Energy, L.P.
	Richard
    Menchaca
	Kimberly
    Menchaca
	Segundo
    Resources, LLC




 





    
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