Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On February 15, 2020,
the Company entered into a letter agreement with Sylva International LLC d/b/a SylvaCap Media (“SylvaCap”),
pursuant to which SylvaCap agreed to act as the Company’s non-exclusive digital marketing service provider in consideration
for an aggregate of 100,000 shares of restricted common stock, which are fully-earned upon their issuance, and $50,000 per month
during the term of the agreement, which was to end on June 15, 2020. On May 19, 2020, the Company entered into a first amendment
to the SylvaCap agreement. Pursuant to the amendment, the Company and SylvaCap extended the term of the letter agreement to October
19, 2020. The 100,000 shares were issued on May 15, 2020. On August 31, 2020, the parties entered into a second amendment to the
agreement. Pursuant to the amendment, the parties agreed to amend the engagement agreement to increase the stock fee payable thereunder
to 175,000 shares of common stock of the Company and to provide for the agreement to remain in place until the earlier of (a) October
19, 2020; and (b) the closing of the Company’s currently contemplated merger with Viking Energy Group, Inc. SylvaCap also
made representations regarding its financial condition and investing knowledge pursuant to the amendment in order for the Company
to confirm that an exemption from registration exists for the issuance of the shares.
As previously disclosed
in the Current Report on Form
8-K filed by the Company with the Securities and Exchange Commission on February 5, 2020, on
February 3, 2020, the Company entered into an Agreement and Plan of Merger (“Original Merger Agreement”) with
Viking Energy Group, Inc. (“Viking”). The agreement provides that, upon the terms and subject to the conditions
set forth therein, a newly-formed wholly-owned subsidiary of the Company (“Merger Sub”) will merge with and
into Viking (the “Merger”), with Viking surviving the Merger as a wholly-owned subsidiary of the Company.
Subsequently,
the Company and Viking agreed to amend the Original Merger Agreement on May 27, 2020, June 15, 2020 and June 25, 2020 (collectively,
the “Merger Amendments”).
On
August 31, 2020, the Company and Viking entered into an Amended and Restated Merger Agreement (the “A&R Merger Agreement”)
to amend and restate the Original Agreement. In addition to restating the Merger Amendments, the A&R Merger Agreement amended
the agreement to: (a) provide for Viking to continue to have 28,092 shares of its Series C Preferred Stock issued and outstanding
as of the closing of the Merger; (b) provide for such Series C Preferred Stock of Viking to be exchanged, on a one-for-one basis
for a series of Series A Convertible Preferred Stock of the Company (discussed below under Item 5.03), which have substantially
similar terms as the Viking Series C Preferred Stock (as recently amended), but with the holder thereof having the right to convert
such Series A Convertible Preferred Stock into, and the right to vote a number of voting shares equal to, the number of shares
of common stock of Camber which would have been issuable to the holder of such Series C Preferred Stock of Viking upon the closing
of the Merger, had such preferred stock been fully converted prior to closing; (c) make other amendments throughout the Original
Merger Agreement to provide for the concept of the exchange of Viking preferred stock for Company preferred stock; (d) remove the
closing conditions related to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which the parties have determined
will not apply to the Merger; (e) provide for Viking’s consent to the Company’s payment of the consideration to each
non-executive member of the Board of Directors and each executive officer of the Company, as described below in connection with
the Merger Compensation Agreements (which had previously been approved in concept by Viking pursuant to the Merger Amendments);
(f) provide for the Company’s consent to an amendment to the designation of the terms of Viking’s Series C Preferred
Stock, subject to applicable law and the approval of the holder thereof; (g) remove certain closing conditions to the Merger which
have already occurred to date; (h) include as a closing condition that Viking must receive an opinion, from legal counsel or an
independent public or certified accountant, in form and substance reasonably satisfactory to Viking, dated as of the closing date
of the Merger, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion,
for U.S. federal income tax purposes, the Merger will be treated as a “reorganization” within the meaning of
Section 368(a) of the Internal Revenue Code; (i) provide that Viking shall not have more than 28,092 shares of Series C Preferred
Stock issued and outstanding at the time the Merger closes; (j) confirm that if the merger is not completed because Camber’s
shareholders do not approve the merger, that Camber would retain 15% of Elysium; and (k) make certain other clarifying changes
and updates to the Original Merger Agreement.
In connection with
the entry into the A&R Merger Agreement, on August 31, 2020, the Company’s Board of Directors entered into Past Service
Payment and Success Bonus Agreements with each non-executive member of the Board of Directors, and each of Louis G. Schott, our
Interim Chief Executive Officer and Robert Schleizer, our Chief Financial Officer (collectively, the “Merger Compensation
Agreements”). Pursuant to such agreements: each non-executive director, and each officer, of the Company, is to receive,
contingent upon closing the Merger, a payment of $100,000 in consideration for past services provided to the Company through the
date of the Merger as a member of the Board of Directors/officer, and $50,000 as a success bonus for the Company’s successful
completion of the Merger, contingent on such non-executive director/officer’s, continued service to the Company at the same
level of service he is currently performing, through the effective date of the Merger.
Additionally
on August 31, 2020, the Company entered into first amendments to the letter agreements the Company had previously entered into
with Fides Energy LLC, an entity owned and controlled by Mr. Schott (“Fides”) and BlackBriar Advisors LLC, an
entity owned and controlled by Mr. Schleizer (“BlackBriar”), to provide that (a) Mr. Schott, through Fides,
will continue to provide services to the Company for a period of six months following the closing of the Merger, on similar terms
as set forth in such original letter agreement, except in a non-executive capacity and that the Company will reimburse Mr. Schott
for the costs of his and his family’s health insurance through such six month term; and (b) Mr. Schleizer, through BlackBriar,
will continue to provide services to the Company for a period of three months following the closing of the Merger, on similar terms
as set forth in such original letter agreement, except in a non-executive capacity and for total consideration of $30,000 per month
(compared to $40,000 per month currently).
The foregoing description
of the A&R Merger Agreement, the Merger Compensation Agreements, the 1st amendment to the Fides letter agreement
and 1st amendment to the BlackBriar letter agreement above, is subject to, and qualified in its entirety by, the A&R
Merger Agreement, the Merger Compensation Agreements, the 1st amendment to the Fides letter agreement and 1st
amendment to the BlackBriar letter agreement, attached as Exhibits 2.1, 10.4 through 10.7, 10.9 and
10.11, respectively, which are incorporated in this Item 1.01 by reference in their entirety.