Exhibit 10.1
 
Subscription Agreement
 
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. THERE ARE FURTHER
RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES DESCRIBED HEREIN.
 
THE PURCHASE OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE
INVESTMENT.
 
Lilis Energy, Inc.
1900 Grant Street, Suite #720
Denver, Colorado 80203
 
Ladies and Gentlemen:
 
The undersigned understands that Lilis Energy, Inc., a corporation organized
under the laws of Nevada (the “Company”), has authorized the sale and issuance
to certain investors of 3,750,000 Units with each Unit consisting of (i) one
share of the Company’s common stock, par value $0.0001 (the “Common Stock”) and
(ii) one Warrant to purchase one share of Common Stock, at an exercise price
equal to $2.50 per share (the “Warrants”).  The Units, Common, Stock and
Warrants are referred to herein as the “Securities.”
 
This offering is made pursuant to the Confidential Private Offering Memorandum,
dated January 7, 2014, and the documents incorporated therein by reference  (the
“Offering Documents”), all as more particularly described and set forth in the
Offering Documents. The undersigned further understands that the offering is
being made without registration of the Securities under the Securities Act of
1933, as amended (the “Securities Act”), or any securities law of any state of
the United States or of any other jurisdiction, and is being made only to
“accredited investors” (as defined in Rule 501 of Regulation D under the
Securities Act).
 
1.             Subscription. Subject to the terms and conditions hereof and the
provisions of the Offering Documents, the undersigned hereby irrevocably
subscribes for the Securities set forth in Appendix A hereto for the aggregate
purchase price set forth in Appendix A, which is payable as described in Section
4 hereof. The undersigned acknowledges that the Securities will be subject to
restrictions on transfer as set forth in this subscription agreement (the
“Subscription Agreement”).  The Investor acknowledges that the Offering is not
being underwritten by T.R. Winston & Company, LLC (the “Placement Agent”), the
placement agent for the Offering named in the Confidential Private Offering
Memorandum, and that there is no minimum offering amount.
 
 
 

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2.             Acceptance of Subscription and Issuance of Securities. It is
understood and agreed that the Company shall have the sole right, at its
complete discretion, to accept or reject this subscription, in whole or in part,
for any reason and that the same shall be deemed to be accepted by the Company
only when it is signed by a duly authorized officer of the Company and delivered
to the undersigned at the Closing referred to in Section 3
hereof.  Subscriptions need not be accepted in the order received, and the
Securities may be allocated among subscribers. Notwithstanding anything in this
Subscription Agreement to the contrary, the Company shall have no obligation to
issue any of the Securities to any person who is a resident of a jurisdiction in
which the issuance of Securities to such person would constitute a violation of
the securities, “blue sky” or other similar laws of such jurisdiction
(collectively referred to as the “State Securities Laws”).
 
3.             The Closing.  The closing of the purchase and sale of the
Securities (the “Closing”) shall take place at such time and place as the
Company may designate by notice to the undersigned (the “Closing Date”).  This
offering will continue until the earlier of (i) the date upon which
subscriptions for all of the Securities offered have been accepted; or (ii)
January 31, 2014, unless extended by the Company and the Placement Agent with
their mutual consent.  It is expected that subscriptions may be accepted on
multiple occasions prior to the Closing Date of the Offering.
 
4.             Payment for Securities. Payment for the Securities shall be
received by Signature Bank (the “Escrow Agent”) from the undersigned by
cashier's check, wire transfer of immediately available funds or other means
approved by the Company at or prior to the Closing, in the amount as set forth
in Appendix A hereto. The Company shall deliver certificates representing the
Securities to the undersigned at the Closing bearing an appropriate legend
referring to the fact that the Securities were sold in reliance upon an
exemption from registration under the Securities Act.
 
5.             Representations and Warranties of the Company.
 
(a)           As of the Closing, the Company represents and warrants that the
Company is duly formed and validly existing under the laws of Nevada, with full
power and authority to conduct its business as it is currently being conducted
and to own its assets; and has secured any other authorizations, approvals,
permits and orders required by law for the conduct by the Company of its
business as it is currently being conducted.
 
(b)           The Company has all such corporate power and authority to enter
into, deliver and perform this Subscription Agreement.
 
(c)            All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Subscription Agreement by the Company, and the issuance and sale of the
Securities to be sold by the Company pursuant to this Subscription
Agreement.  Upon acceptance by the Company, this Subscription Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
by general equitable principles.
 
 
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6.             Representations and Warranties of the Undersigned. The
undersigned hereby represents and warrants to and covenants with the Company
that:
 
(a)           General.
 
(i)            The undersigned has all requisite authority (and in the case of
an individual, the capacity) to purchase the Securities, enter into this
Subscription Agreement and to perform all the obligations required to be
performed by the undersigned hereunder, and such purchase will not contravene
any law, rule or regulation binding on the undersigned or any investment
guideline or restriction applicable to the undersigned.
 
(ii)           The undersigned is a resident of the state set forth on the
signature page hereto and is not acquiring the Securities as a nominee or agent
or otherwise for any other person.
 
(iii)          The undersigned will comply with all applicable laws and
regulations in effect in any jurisdiction in which the undersigned purchases or
sells Securities and obtain any consent, approval or permission required for
such purchases or sales under the laws and regulations of any jurisdiction to
which the undersigned is subject or in which the undersigned makes such
purchases or sales, and the Company shall have no responsibility therefor.
 
(b)           Information Concerning the Company.
 
(i)            The undersigned has received a copy of the Offering Documents.
The undersigned has not been furnished any offering literature other than the
Offering Documents and has relied only on the information contained therein.
 
(ii)           The undersigned understands and accepts that the purchase of the
Securities involves various risks, including the risks outlined in the Offering
Documents and in this Subscription Agreement. The undersigned represents that it
is able to bear any loss associated with an investment in the Securities.
 
(iii)          The undersigned confirms that it is not relying on any
communication (written or oral) of the Company or any of its affiliates, as
investment advice or as a recommendation to purchase the Securities. It is
understood that information and explanations related to the terms and conditions
of the Securities provided in the Offering Documents or otherwise by the Company
or any of its affiliates shall not be considered investment advice or a
recommendation to purchase the Securities, and that neither the Company nor any
of its affiliates is acting or has acted as an advisor to the undersigned in
deciding to invest in the Securities. The undersigned acknowledges that neither
the Company nor any of its affiliates has made any representation regarding the
proper characterization of the Securities for purposes of determining the
undersigned's authority to invest in the Securities.
 
 
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(iv)          The undersigned is familiar with the business and financial
condition and operations of the Company, all as generally described in the
Offering Documents. The undersigned has had access to such information
concerning the Company and the Securities as it deems necessary to enable it to
make an informed investment decision concerning the purchase of the Securities.
 
(v)           The undersigned understands that, unless the undersigned notifies
the Company in writing to the contrary at or before the Closing, each of the
undersigned's representations and warranties contained in this Subscription
Agreement will be deemed to have been reaffirmed and confirmed as of the
Closing, taking into account all information received by the undersigned.
 
(vi)          The undersigned acknowledges that the Company has the right in its
sole and absolute discretion to abandon this private placement at any time prior
to the completion of the offering. This Subscription Agreement shall thereafter
have no force or effect and the Company shall return the previously paid
subscription price of the Securities, without interest thereon, to the
undersigned.
 
(vii)         The undersigned understands that no federal or state agency has
passed upon the merits or risks of an investment in the Securities or made any
finding or determination concerning the fairness or advisability of this
investment.
 
(c)           Non-reliance.
 
(i)            The undersigned represents that it is not relying on (and will
not at any time rely on) any communication (written or oral) of the Company, as
investment advice or as a recommendation to purchase the Securities, it being
understood that information and explanations related to the terms and conditions
of the Securities and the other transaction documents that are described in the
Offering Documents shall not be considered investment advice or a recommendation
to purchase the Securities.
 
(ii)           The undersigned confirms that the Company has not (A) given any
guarantee or representation as to the potential success, return, effect or
benefit (either legal, regulatory, tax, financial, accounting or otherwise) of
investment in the Securities or (B) made any representation to the undersigned
regarding the legality of an investment in the Securities under applicable legal
investment or similar laws or regulations. In deciding to purchase the
Securities, the undersigned is not relying on the advice or recommendations of
the Company and the undersigned has made its own independent decision that the
investment in the Securities is suitable and appropriate for the undersigned.
 
 
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(d)           Status of Undersigned.
 
(i)            The undersigned has such knowledge, skill and experience in
business, financial and investment matters that the undersigned is capable of
evaluating the merits and risks of an investment in the Securities. With the
assistance of the undersigned's own professional advisors, to the extent that
the undersigned has deemed appropriate, the undersigned has made its own legal,
tax, accounting and financial evaluation of the merits and risks of an
investment in the Securities and the consequences of this Subscription
Agreement. The undersigned has considered the suitability of the Securities as
an investment in light of its own circumstances and financial condition and the
undersigned is able to bear the risks associated with an investment in the
Securities and its authority to invest in the Securities.
 
(ii)           The undersigned is an “accredited investor” as defined in Rule
501(a) under the Securities Act. The undersigned agrees to furnish any
additional information requested by the Company or any of its affiliates to
assure compliance with applicable U.S. federal and state securities laws in
connection with the purchase and sale of the Securities. The undersigned
acknowledges that the undersigned has completed the Investor Questionnaire
contained in Appendix B hereto and that the information contained therein is
complete and accurate as of the date thereof and is hereby affirmed as of the
date hereof. Any information that has been furnished or that will be furnished
by the undersigned to evidence its status as an accredited investor is accurate
and complete, and does not contain any misrepresentation or material omission.
 
(e)            Restrictions on Transfer or Sale of Securities. As applies to the
undersigned:
 
(i)            The undersigned is acquiring the Securities solely for the
undersigned’s own beneficial account, for investment purposes, and not with a
view to, or for resale in connection with, any distribution of the Securities.
The undersigned understands that the Securities have not been registered under
the Securities Act or any State Securities Laws by reason of specific exemptions
under the provisions thereof which depend in part upon the investment intent of
the undersigned and of the other representations made by the undersigned in this
Subscription Agreement. The undersigned understands that the Company is relying
upon the representations and agreements contained in this Subscription Agreement
(and any supplemental information) for the purpose of determining whether this
transaction meets the requirements for such exemptions.
 
(ii)           The undersigned understands that the Securities are “restricted
securities” under applicable federal securities laws and that the Securities Act
and the rules of the U.S. Securities and Exchange Commission (the “Commission”)
provide in substance that the undersigned may dispose of the Securities only
pursuant to an effective registration statement under the Securities Act or an
exemption therefrom, and the undersigned understands that the Company has no
obligation or intention to register any of the Securities, or to take action so
as to permit sales pursuant to the Securities Act (including Rule 144
thereunder). Accordingly, the undersigned understands that under the
Commission's rules, the undersigned may dispose of the Securities principally
only in “private placements” which are exempt from registration under the
Securities Act, in which event the transferee will acquire “restricted
securities” subject to the same limitations as in the hands of the undersigned.
Consequently, the undersigned understands that the undersigned must bear the
economic risks of the investment in the Securities for an indefinite period of
time.
 
 
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(iii)          The undersigned agrees: (A) that the undersigned will not sell,
assign, pledge, give, transfer or otherwise dispose of the Securities or any
interest therein, or make any offer or attempt to do any of the foregoing,
except pursuant to a registration of the Securities under the Securities Act and
all applicable State Securities Laws, or in a transaction which is exempt from
the registration provisions of the Securities Act and all applicable State
Securities Laws; (B) that the certificates representing the Securities will bear
a legend making reference to the foregoing restrictions; and (C) that the
Company and it affiliates shall not be required to give effect to any purported
transfer of such Securities except upon compliance with the foregoing
restrictions.
 
(iv)          The undersigned acknowledges that neither the Company nor any
other person offered to sell the Securities to it by means of any form of
general solicitation or advertising, including but not limited to: (A) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
(B) any seminar or meeting whose attendees were invited by any general
solicitation or general advertising.
 
(v)           The undersigned understands that there is no established public
trading market for the Warrants being offered in the Offering, and that the
Company does not expect such a market to develop. In addition, the Company does
not intend to apply for listing of the Warrants on any securities exchange. The
undersigned understands that without an active market, the liquidity of the
Warrants will be limited.
 
7.             Conditions to Obligations of the Undersigned and the Company. The
obligations of the undersigned to purchase and pay for the Securities specified
in Appendix A and of the Company to sell the Securities are subject to the
satisfaction at or prior to the Closing of the following conditions precedent:
the representations and warranties of the Company contained in Section 5 hereof
and of the undersigned contained in Section 6 hereof shall be true and correct
as of the Closing in all respects with the same effect as though such
representations and warranties had been made as of the Closing.
 
8.             Obligations Irrevocable. The obligations of the undersigned shall
be irrevocable.
 
9.             Legend. The certificates representing the Securities sold
pursuant to this Subscription Agreement will be imprinted with a legend in
substantially the following form:
 
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER
JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND
SUCH OTHER APPLICABLE LAWS.”
 
 
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10.           Waiver, Amendment. Neither this Subscription Agreement nor any
provisions hereof shall be modified, changed, discharged or terminated except by
an instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought.
 
11.           Assignability. Neither this Subscription Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the undersigned without the prior written
consent of the other party.
 
12.          Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF
THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT.
 
13.           Submission to Jurisdiction. With respect to any suit, action or
proceeding relating to any offers, purchases or sales of the Securities by the
undersigned (“Proceedings”), the undersigned irrevocably submits to the
jurisdiction of the federal or state courts located in the Borough of Manhattan
in New York City, which submission shall be exclusive unless none of such courts
has lawful jurisdiction over such Proceedings.
 
14.           Governing Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada.
 
15.           Section and Other Headings. The section and other headings
contained in this Subscription Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Subscription Agreement.
 
16.           Counterparts. This Subscription Agreement may be executed in any
number of counterparts (including by facsimile, PDF or other electronic means),
each of which when so executed and delivered shall be deemed to be an original
and all of which together shall be deemed to be one and the same agreement.
 
17.           Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid to the following addresses (or such other address as either
party shall have specified by notice in writing to the other):
 
 
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If to the Company:
Lilis Energy, Inc.
1900 Grant Street, Suite #720
Denver, Colorado 80203
Attn: A. Bradley Gabbard
Facsimile No.: (303) 957-2234
 
with a copy to:
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, CO 80202
Attention: Ron Levine
Facsimile No.: (303) 893-1379
 
If to the undersigned:
________________________________________
________________________________________
________________________________________
Facsimile: ________________________________
E-mail: __________________________________
Telephone: _______________________________
Attention: ________________________________

 
18.           Binding Effect. The provisions of this Subscription Agreement
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
 
19.           Survival. All representations, warranties and covenants contained
in this Subscription Agreement shall survive (i) the acceptance of the
subscription by the Company, (ii) changes in the transactions, documents and
instruments described in the Offering Documents which are not material or which
are to the benefit of the undersigned and (iii) the death or disability of the
undersigned.
 
20.           Notification of Changes. The undersigned hereby covenants and
agrees to notify the Company upon the occurrence of any event prior to the
closing of the purchase of the Securities pursuant to this Subscription
Agreement which would cause any representation, warranty, or covenant of the
undersigned contained in this Subscription Agreement to be false or incorrect.
 
21.           Severability. If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction.
 
 
[SIGNATURE PAGE FOLLOWS]
 
 
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IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
this ______ OF ______________, 2014.
 
 
PURCHASER (if an individual):
PURCHASER (if an entity):
By___________________________
Name:
______________________________
Legal Name of Entity
By____________________________
Name:
Title:

 
State/Country of Domicile or Formation: ______________________________________
 
Aggregate Subscription Amount: US$_________________________________________
 
 
The offer to purchase Securities as set forth above is confirmed and accepted by
the Company as to __________ Units.
 

 
LILIS ENERGY, INC.
 
 
By____________________________
Name:
Title:

 
 
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APPENDIX A
 
CONSIDERATION TO BE DELIVERED
 
Securities to Be Acquired
 
Aggregate Purchase Price to be Paid
 
_________ Units
 
 
US$ ___________
     

 
 
 
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COVER SHEET WITH SUBSCRIPTION INSTRUCTIONS
 
Enclosed herewith are the documents necessary to subscribe for _______________
Units, with each Unit consisting of (i) one share of the Company’s common stock,
par value $0.0001 (the “Common Stock”) and (ii) one Warrant to purchase one
share of Common Stock, at an exercise price equal to $2.50 per share (the
“Warrants”). The Units, Common Stock, and Warrants are referred to herein as the
“Securities.”  The Securities are being offered to qualified investors pursuant
to the Confidential Private Offering Memorandum, dated January 7, 2014, and the
documents incorporated therein by reference  (collectively, the “Offering
Documents”). Set forth herein are instructions for the execution of the enclosed
documents.
 
A. Instructions.
 
Each person considering subscribing for Securities should review the following
instructions:
 
·  
Subscription Agreement:  The Subscription Agreement must be completed, executed
and delivered to T.R. Winston & Company, LLC (the “Placement Agent”) at the
address set forth below.  The Company will execute and deliver a counterpart to
the Subscription Agreement to the Placement Agent. The Company shall have the
right to accept or reject any subscription, in whole or in part. An
acknowledgment of the acceptance of your subscription for the Securities
subscribed will be returned to you promptly after acceptance.

 
·  
Payment:  Payment of US$________________________ for the Securities subscribed
for shall be made by delivery at the Closing (as defined in Section 3 of the
Subscription Agreement) by cashier's check, wire transfer of immediately
available funds or other means approved by the Company to Signature Bank (the
“Escrow Agent”), at either the address set forth below or by wire transfer to
Signature Bank, 261 Madison Avenue, New York, New York 10016, ABA No. 026013576
(Swift Code: SIGNUS33) for credit to Lilis Energy, Inc., Signature Bank as
Escrow Agent, Account No. __________, in each case, with the name and address of
the individual or entity making payment.

 
 
B. Communications.
 
Placement Agent:

376 Main Street
Bedminster, New Jersey 07921
Attn: Tyler Runnels
           Karen Ting
E-mail: karen@trwinston.com
Fax No.: (310) 424-1990

Escrow Agent:

261 Madison Avenue
New York, New York 10016
Attn:  Cliff Broder, Group Director and Senior Vice President
 
 
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