Exhibit 10.15

 

ESCROW DEPOSIT AGREEMENT

 

This ESCROW DEPOSIT AGREEMENT (this “Agreement”) dated as of this 26th day of
May 2016, by and among LILIS ENERGY, INC., a Nevada corporation (the “Company”),
having an address at 216 16th Street, Suite 1350, Denver, CO 80202, T.R. WINSTON
& COMPANY, LLC, a Delaware limited liability company (“Placement Agent”), having
its principal address at 2049 Century Park East, Suite 320, Los Angeles, CA
90067, and SIGNATURE BANK (the “Escrow Agent”), a New York State chartered bank,
having an office at 261 Madison Avenue, New York, New York 10016. All
capitalized terms not herein defined shall have the meaning ascribed to them in
that certain Securities Purchase Agreement, dated on or about the date hereof,
including all attachments, schedules and exhibits thereto (the “Subscription
Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the terms of the Subscription Agreement the Company desires
to sell (the “Offering”) up to Twenty Million Dollars ($20,000,000) of Series B
6% Convertible Preferred Stock (the "Shares"), and warrants to purchase Common
Stock (the “Warrants”) ; and

 

WHEREAS, the Offering will terminate on the earlier of the sale of all of the
Shares offered pursuant to the Subscription Agreement or July 1, 2016 (the
“Termination Date”), or by August 1, 2016 (the “Final Termination Date”), if the
Termination Date has been extended by Company and the Placement Agent; and

 

WHEREAS, the Company and Placement Agent desire to establish an escrow account
with the Escrow Agent into which the Company and Placement Agent shall instruct
subscribers, who subscribed to the Offering pursuant to the terms of the
Subscription Agreement (the “Subscribers”), to deposit checks and other
instruments for the payment of money made payable to the order of “Signature
Bank as Escrow Agent for Lilis Energy, Inc.” and Escrow Agent is willing to
accept said checks and other instruments for the payment of money in accordance
with the terms hereinafter set forth; and

 

WHEREAS, the Company, as issuer, and Placement Agent, as an introducing
broker-dealer, each, individually represent and warrant to the Escrow Agent
that, solely with respect to such party individually, they will comply with all
of their separate respective obligations under applicable state and federal
securities laws and regulations with respect to sale of the Offering; and

 

WHEREAS, the Company and Placement Agent each, individually represent and
warrant to the Escrow Agent that, solely with respect to such party
individually, they have not stated to any individual or entity that the Escrow
Agent’s duties will include anything other than those duties stated in this
Agreement; and

 

WHEREAS, the Company and Placement Agent each, individually represent and
warrant to the Escrow Agent that, solely with respect to such party
individually, a copy of each document that has been delivered to Subscribers and
third parties that include Escrow Agent’s name and duties is attached hereto as
Schedule I.

 

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NOW, THEREFORE, IT IS AGREED as follows:

 

1.          Delivery of Escrow Funds.

 

(a)          The Placement Agent and the Company shall instruct Subscribers to
deliver to Escrow Agent checks made payable to the order of “Signature Bank, as
Escrow Agent for Lilis Energy, Inc.,” or wire transfer to Signature Bank, 261
Madison Avenue, New York, New York 10016, ABA No. **** for credit to Signature
Bank, as Escrow Agent for Lilis Energy, Inc., Account No. *****, in each case,
with the name and address of the individual or entity making payment. In the
event any Subscriber’s address is not provided to Escrow Agent by the
Subscriber, then the Company, upon notification by Escrow Agent, agrees to
promptly provide Escrow Agent with such information in writing. The checks or
wire transfers shall be deposited into a non interest-bearing account at
Signature Bank entitled “Lilis Energy, Inc., Signature Bank, as Escrow Agent”
(the “Escrow Account”).

 

(b)          The collected funds deposited into the Escrow Account are referred
to as the “Escrow Funds.”

 

(c)          The Escrow Agent shall have no duty or responsibility to enforce
the collection or demand payment of any funds deposited into the Escrow Account.
If, for any reason, any check deposited into the Escrow Account shall be
returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be
to return the check to the Subscriber and advise the Company and Placement Agent
promptly thereof.

 

2.          Release of Escrow Funds. The Escrow Funds shall be paid by the
Escrow Agent in accordance with the following:

 

(a)          In the event that the Company and Placement Agent advise the Escrow
Agent in writing that the Offering has been terminated (the “Termination
Notice”), the Escrow Agent shall promptly return the funds paid by each
Subscriber to said Subscriber without interest or offset.

 

(b)          If prior to 3:00 P.M. Eastern time on the Termination Date, the
Escrow Agent receives written notice, in the form of Exhibit A, attached hereto
and made a part hereof, and signed by the Company and Placement Agent, stating
that the Termination Date has been extended to the Final Termination Date (the
“Extension Notice”), then the Termination Date shall be so extended.           

 

(c)          Provided that the Escrow Agent does not receive the Termination
Notice in accordance with Section 2(a) and Escrow Funds have been deposited into
the Escrow Account on or prior to the later of the Termination Date or the date
stated in the Extension Notice, if any, received by the Escrow Agent in
accordance with Section 2(b) above, the Escrow Agent shall, upon receipt of
written instructions, in the form of Exhibit B, attached hereto and made a part
hereof, or in a form and substance satisfactory to the Escrow Agent, received
from the Company and the Placement Agent, from time to time pay the Escrow Funds
in accordance with such written instructions, which instructions shall be
limited to the payment of the Placement Agent’s commission and non-accountable
expense allowance and other offering expenses and the payment of the balance to
the Company. Such payment or payments shall be made by wire transfer within one
(1) Business Day of receipt of such written instructions, which must be received
by the Escrow Agent no later than 3:00 PM Eastern Time on a Business Day for the
Escrow Agent to process such instructions that Business Day. The Company further
agrees that there shall be a limit of three (3) closings (each a “Closing”)
under this Agreement with each Closing limited to three (3) wires. Any
subsequent wires or Closing may be subject to additional fees of Twenty Five
Dollars ($25.00) per wire.

 

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(d)          By 3:00 P.M. Eastern time on the date that is ten (10) Business
Days from the later of the Termination Date or the date stated in the Extension
Notice, if any, that the Escrow Agent has received in accordance with paragraph
2(a) above, the Company and the Placement Agent shall provide the Escrow Agent
with final written instructions in accordance with paragraph 2(c) regarding the
disbursement of any funds remaining in the Escrow Account (e). The Escrow Agent
shall not be required to pay any uncollected funds or any funds that are not
available for withdrawal. Should the Company and Placement Agent fail to provide
such final written instructions contemplated under this paragraph by the
deadline, the Escrow Agent shall promptly return the Escrow Funds to the
Subscribers without interest and offset.

 

(e)          If the Termination Date, Final Termination Date or any date that is
a deadline under this Agreement for giving the Escrow Agent notice or
instructions or for the Escrow Agent to take action is not a Business Day, then
such date shall be the Business Day that immediately precedes that date. A
“Business Day” is any day other than a Saturday, Sunday or a Bank holiday.

 

3.          Acceptance by Escrow Agent. The Escrow Agent hereby accepts and
agrees to perform its obligations hereunder, provided that:

 

(a)          The Escrow Agent may act in reliance upon any signature believed by
it to be genuine, and may assume that any person who has been designated by
Placement Agent or the Company to give any written instructions, notice or
receipt, or make any statements in connection with the provisions hereof has
been duly authorized to do so. The Escrow Agent shall have no duty to make
inquiry as to the genuineness, accuracy or validity of any statements or
instructions or any signatures on statements or instructions. The names and true
signatures of each individual authorized to act singly on behalf of the Company
and Placement Agent are stated in Schedule II, which is attached hereto and made
a part hereof. The Company and Placement Agent may each remove or add one or
more of its authorized signers stated on Schedule II by notifying the Escrow
Agent of such change in accordance with this Agreement, which notice shall
include the true signature for any new authorized signatories.

 

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(b)          The Escrow Agent may act relative hereto in reliance upon advice of
counsel in reference to any matter connected herewith. The Escrow Agent shall
not be liable for any mistake of fact or error of judgment or law, or for any
acts or omissions of any kind, unless caused by its willful misconduct or gross
negligence.

 

(c)          The Placement Agent and the Company agree to indemnify and hold the
Escrow Agent harmless from and against any and all claims, losses, costs,
liabilities, damages, suits, demands, judgments or expenses (including but not
limited to reasonable attorney’s fees) claimed against or incurred by Escrow
Agent arising out of or related, directly or indirectly, to this Escrow
Agreement unless caused by the Escrow Agent’s gross negligence or willful
misconduct

 

(d)           In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain
from taking any action other than to keep safely the Escrow Funds until it shall
be directed otherwise by a court of competent jurisdiction, or (ii) deliver the
Escrow Funds to a court of competent jurisdiction.

 

(e)          The Escrow Agent shall have no duty, responsibility or obligation
to interpret or enforce the terms of any agreement other than Escrow Agent’s
obligations hereunder, and the Escrow Agent shall not be required to make a
request that any monies be delivered to the Escrow Account, it being agreed that
the sole duties and responsibilities of the Escrow Agent shall be to the extent
not prohibited by applicable law (i) to accept checks or other instruments for
the payment of money and wire transfers delivered to the Escrow Agent for the
Escrow Account and deposit said checks and wire transfers into the non-interest
bearing Escrow Account, and (ii) to disburse or refrain from disbursing the
Escrow Funds as stated above, provided that the checks received by the Escrow
Agent have been collected and are available for withdrawal.

 

4.          Escrow Account Statements and Information. The Escrow Agent agrees
to send to the Company and/or the Placement Agent, at no cost to the Company
and/or Placement Agent, a copy of the Escrow Account periodic statement, upon
request in accordance with the Escrow Agent’s regular practices for providing
account statements to its non-escrow clients and to also provide the Company
and/or Placement Agent, or their designee, upon request other deposit account
information, including Escrow Account balances, by telephone or by computer
communication, to the extent practicable. The Company and Placement Agent agree
to complete and sign all forms or agreements required by the Escrow Agent for
that purpose. The Company and Placement Agent each consents to the Escrow
Agent’s release of such Escrow Account information to any of the individuals
designated by Company or Placement Agent, which designation has been signed in
accordance with paragraph 3(a) by any of the persons in Schedule II. Further,
the Company and Placement Agent have an option to receive e-mail notification of
incoming and outgoing wire transfers. If this e-mail notification service is
requested and subsequently approved by the Escrow Agent, the Company and/or
Placement Agent agrees to provide a valid e-mail address and other information
necessary to set-up this service and sign all forms and agreements required for
such service. The Company and Placement Agent each consents to the Escrow
Agent’s release of wire transfer information to the designated e-mail
address(es). The Escrow Agent’s liability for failure to comply with this
section shall not exceed the cost of providing such information.

 

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5.          Resignation and Termination of the Escrow Agent. The Escrow Agent
may resign at any time by giving 30 days’ prior written notice of such
resignation to Placement Agent and the Company. Upon providing such notice, the
Escrow Agent shall have no further obligation hereunder except to hold as
depository the Escrow Funds that it receives until the end of such 30-day
period. In such event, the Escrow Agent shall not take any action, other than
receiving and depositing Subscribers checks and wire transfers in accordance
with this Agreement, until the Company has designated a banking corporation,
trust company, attorney or other person as successor. Upon receipt of such
written designation signed by Placement Agent and the Company, the Escrow Agent
shall promptly deliver the Escrow Funds to such successor and shall thereafter
have no further obligations hereunder. If such instructions are not received
within 30 days following the effective date of such resignation, then the Escrow
Agent may deposit the Escrow Funds held by it pursuant to this Agreement with a
clerk of a court of competent jurisdiction pending the appointment of a
successor. In either case provided for in this paragraph, the Escrow Agent shall
be relieved of all further obligations and released from all liability
thereafter arising with respect to the Escrow Funds.

 

6.          Termination. The Company and the Placement Agent may terminate the
appointment of the Escrow Agent hereunder upon written notice specifying the
date upon which such termination shall take effect, which date shall be at least
30 days from the date of such notice. In the event of such termination, the
Company and Placement Agent shall, within 30 days of such notice, appoint a
successor escrow agent and the Escrow Agent shall, upon receipt of written
instructions signed by the Company and Placement Agent, turn over to such
successor escrow agent all of the Escrow Funds; provided, however, that if the
Company and Placement Agent fail to appoint a successor escrow agent within such
30-day period, such termination notice shall be null and void and the Escrow
Agent shall continue to be bound by all of the provisions hereof. Upon receipt
of the Escrow Funds, the successor escrow agent shall become the escrow agent
hereunder and shall be bound by all of the provisions hereof and Escrow Agent
shall be relieved of all further obligations and released from all liability
thereafter arising with respect to the Escrow Funds and under this Agreement.

 

7.          Investment. All funds received by the Escrow Agent shall be held
only in non-interest bearing bank accounts at Escrow Agent.

 

8.          Compensation. Escrow Agent shall be entitled, for the duties to be
performed by it hereunder, to a fee of $4,000, which fee shall be paid by the
Company upon the signing of this Agreement. In addition, the Company shall be
obligated to reimburse Escrow Agent for all reasonable and customary fees, costs
and expenses incurred or that become due in connection with this Agreement or
the Escrow Account, including reasonable attorney’s fees. Neither the
modification, cancellation, termination or rescission of this Agreement nor the
resignation or termination of the Escrow Agent shall affect the right of Escrow
Agent to retain the amount of any fee which has been paid, or to be reimbursed
or paid any reasonable and customary amount which has been incurred or becomes
due, prior to the effective date of any such modification, cancellation,
termination, resignation or rescission. To the extent the Escrow Agent has
incurred any such expenses, or any such fee becomes due, prior to any closing,
the Escrow Agent shall advise the Company and the Company shall direct all such
amounts to be paid directly at any such closing. Escrow Agent shall be entitled
to a fee of $1,000 in the event that this Agreement is amended for any reason in
accordance with Section 10(d).

 

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9.          Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if sent by hand-delivery, by facsimile (followed
by first-class mail), by nationally recognized overnight courier service or by
prepaid registered or certified mail, return receipt requested, to the addresses
set forth below:

 

 

  If to the Company: Lilis Energy, Inc.     216 16th Street, Suite 1350    
Denver, CO 80202     Attention: Abraham Mirman, CEO     Fax:         If to the
Placement Agent: T.R. Winston & Company, LLC     2049 Century Park East, Suite
320     Los Angeles, CA 90067     Attention: Karen Kang, Vice President     Fax:
310-424-1990         If to Escrow Agent: Signature Bank     261 Madison Avenue  
  New York, NY 10016     Attention: Cliff Broder, Group Director and Senior Vice
President     Fax: 646-822-1364      

10.          General.

 

(a)          This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be entirely performed within such State, without regard to choice of law
principles and any action brought hereunder shall be brought in the courts of
the State of New York, located in the County of New York. Each party hereto
irrevocably waives any objection on the grounds of venue, forum nonconveniens or
any similar grounds and irrevocably consents to service of process by mail or in
any manner permitted by applicable law and consents to the jurisdiction of said
courts. EACH OF THE PARTIES HERETO HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

 

(b)          This Agreement sets forth the entire agreement and understanding of
the parties with respect to the matters contained herein and supersedes all
prior agreements, arrangements and understandings relating thereto.

 

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(c)          All of the terms and conditions of this Agreement shall be binding
upon, and inure to the benefit of and be enforceable by, the parties hereto, as
well as their respective successors and assigns.

 

(d)          This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver of any party of any condition, or
of the breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement. No party
may assign any rights, duties or obligations hereunder unless all other parties
have given their prior written consent.

 

(e)          If any provision included in this Agreement proves to be invalid or
unenforceable, it shall not affect the validity of the remaining provisions.

 

(f)          This Agreement and any modification or amendment of this Agreement
may be executed in several counterparts or by separate instruments and all of
such counterparts and instruments shall constitute one agreement, binding on all
of the parties hereto.

 

11.          Form of Signature. The parties hereto agree to accept a facsimile
transmission copy of their respective actual signatures as evidence of their
actual signatures to this Agreement and any modification or amendment of this
Agreement; provided, however, that each party who produces a facsimile signature
agrees, by the express terms hereof, to place, promptly after transmission of
his or her signature by fax, a true and correct original copy of his or her
signature in overnight mail to the address of the other party.

 

12.          No Third-Party Beneficiaries. This Agreement is solely for the
benefit of the parties and their respective successors and permitted assigns,
and no other person has any right, benefit, priority or interest under or
because of the existence of this Agreement.

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first set forth above.

 

  LILIS ENERGY, INC.             By: /s/ Abraham Mirman     Name: Abraham Mirman
    Title: Chief Executive Officer                             T.R. WINSTON &
COMPANY, LLC             By: /s/ Karen Kang     Name: Karen Kang     Title: Vice
President                             SIGNATURE BANK             By: /s/ Steven
Deneff     Name: Steven Deneff     Title: VP                     By: /s/ Arturo
Mora     Name: Arturo Mora     Title: Relationship Manager  

 

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Schedule I

 

OFFERING DOCUMENTS

 

*See Exhibits 10.2 and 10.3 to the Company’s quarterly report on Form 10Q for
the quarter ended June 30, 2016.

 

 

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Schedule II

 

The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by any one of the following on behalf of the Company
and Placement Agent.

 

  LILIS ENERGY, INC.             Name True Signature             Abraham Mirman
/s/ Abraham Mirman                     T.R. WINSTON & COMPANY, LLC            
Name True Signature             Karen Kang /s/ Karen Kang             G. Tyler
Runnels /s/ G. Tyler Runnels          

 

 

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Exhibit A

 

EXTENSION NOTICE

 

 

 

 

Date: __________________, 2016

 

Signature Bank

261 Madison Avenue

New York, NY 10016

Attention: Cliff Broder, Group Director and Senior Vice President

 

Dear _________:

 

In accordance with the terms of paragraph 2(a) of an Escrow Deposit Agreement
dated _________, 2016, by and among Lilis Energy, Inc. (the “Company”), T.R.
Winston & Company, LLC (the “Placement Agent”) and Signature Bank (the “Escrow
Agent”), the Company hereby notifies the Escrow Agent that the Termination Date
has been extended to ________________, the Final Termination Date.

 

Very truly yours,

 

Lilis Energy, Inc.

By:_____________

Name: Abraham Mirman

Title: Chief Executive Officer

 

T.R. Winston & Company, LLC

By: _______________

Name: Karen Kang

Title: Vice President

 

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Exhibit B

 

FORM OF ESCROW RELEASE NOTICE

 

Date: _______________, 2016

 

Signature Bank

261 Madison Avenue

New York, NY 10016

Attention: Cliff Broder, Group Director and Senior Vice President

 

Dear _________:

 

In accordance with the terms of paragraph 2(c) of an Escrow Deposit Agreement
dated as of ________, 2016 (the "Escrow Agreement"), by and between Lilis
Energy, Inc. (the "Company"), T.R. Winston & Company, LLC (the “Placement
Agent”) and Signature Bank (the "Escrow Agent"), the Company and the Placement
Agent hereby notify the Escrow Agent that the ________ closing will be held on
___________ for gross proceeds of $_________.

 

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions
attached):

 

 

Lilis Energy, Inc.:              $

 

T.R. Winston & Company, LLC                $

 

Very truly yours,

 

Lilis Energy, Inc.

By:_____________

Name: Abraham Mirman

Title: Chief Executive Officer

 

 

T.R. Winston & Company, LLC

By: _______________

Name: Karen Kang

Title: Vice President

 

 

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