Exhibit 10.6
 
THIS TRANSACTION FEE AGREEMENT (this “Agreement”) is made as of the 28th day of
March, 2014.

BETWEEN:

LILIS ENERGY SYSTEMS, INC.
1900 Grant Street, Suite 720
Denver, CO 80203

(the “Company”)

OF THE FIRST PART

AND:

T.R. WINSTON & COMPANY, LLC
376 Main Street
Bedminster, New Jersey 07921

(the “Broker”)

OF THE SECOND PART

W H E R E A S:

A.           The Company will enter into a Securities Purchase Agreement (the
“Purchase Agreement”) with the purchasers to be  identified on the signature
pages of the Purchase Agreement (collectively, the “Investors”) in connection
with the placement of convertible preferred stock (the “Preferred Stock”) and
warrants of the Company to purchase a number of shares of common stock, par
value $0.0001 per share, equal to 50% of the shares of common stock initially
issuable upon conversion of the Preferred Stock (the “Investor Warrants”)  in
the aggregate amount up to $20 million;
 
B.           The Broker is a licensed broker-dealer with the Financial Industry
Regulatory Authority;
 
C.           The Broker introduced the Company to the Investors and assisted the
Company in the transactions contemplated by the Purchase Agreement;
 
D.           If the Company closes the transaction contemplated herein, the
Company wishes to reward the Broker for its services in the manner hereinafter
set forth.

NOW, THEREFORE, in consideration of the mutual covenants, promises, conditions,
warranties and representations hereinafter set forth, the parties hereto agree
as follows:

1.           The Company agrees to compensate the Broker as follows: (i) five
percent (5%) of the gross proceeds of the offering, payable at the Closing (as
defined in the Purchase Agreement) and (ii) shall reimburse the agent for its
legal fees and expenses equal to $25,000.
 
 
 

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2.           The Broker shall be entitled to a cash placement fee (“Tail Fee”),
calculated in the manner provided for in Section 1 above, with respect to any
subsequent public or private offering or other financing or capital-raising
transaction of any kind (“Subsequent Financing”) to the extent that such
financing or capital is provided to the Company, all or in part, by Investors
whom the Broker had introduced, directly or indirectly, to the Company, if such
Subsequent Financing is consummated at any time with the 18-month period
following the Closing of the transaction contemplated herein.
 
3.           The parties hereto, and each of them, covenant and agree that each
of them shall and will upon reasonable request by the other party, make, do,
execute or cause to be made, done or executed all such further and other lawful
acts, deeds, things, devices and assurances whatsoever for the better or more
perfect and absolute performance of the terms and conditions of this Agreement.
 
4.           By execution hereof, the Company acknowledges that the Broker does
not provide investment advice or financial planning services.  In that regard,
the Broker is not registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and cannot therefore provide any advice
regarding the desirability or value of purchasing, selling, transacting in,
investing in, or holding any security.  Rather, the Broker’s services will be
limited to those properly provided by a licensed broker-dealer (T.R. Winston &
Company, LLC is registered with the FINRA as an “Introducing Broker/Dealer” or
“K” broker/ dealer in accordance with Section 15 of the Securities and Exchange
Act of 1934, as amended.)
 
5.           The Company hereby agrees to indemnify and hold harmless the
Broker, its managers, members, agents and employees (collectively referred to as
the Broker for purposes of this Section 4) from and against any and all claims,
actions, suits, proceedings (including those of shareholders), damages,
liabilities and expenses as incurred by any of them (including the fees and
expenses of counsel) which are related to or arise out of any actions taken or
omitted to be taken (including any untrue statements made or omitted to be made)
by the Company or any actions taken or omitted to be taken by the Broker (except
in the case of gross negligence or willful misconduct on the part of such
Broker) in connection with the transactions contemplated by the Purchase
Agreement or otherwise related to or arising out of the Broker’s activities on
behalf of the Company.  The Company shall reimburse Broker for all expenses
(including the fees and expenses of counsel) incurred by such Broker in
connection with investigating, preparing or defending any such claim, action,
suit or proceeding, including in connection with pending or threatened
litigation to which Broker is a party, except in the case of gross negligence or
willful misconduct on the part of such Broker.
 
6.           This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, administrators, successors and
assigns.
 
7.           This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State.  In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.  The parties hereto hereby submit to the exclusive
jurisdiction of the state courts or the United States Federal Courts located in
New York with respect to any dispute arising under this Agreement or the
transactions contemplated hereby.  The party which does not prevail in any
dispute arising under this Agreement shall be responsible for all fees and
expenses, including attorneys’ fees, incurred by the prevailing party in
connection with such dispute.
 
 
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8.           This Agreement consists of a total of 3 pages.  This Agreement may
be signed in any number of counterparts and the combination of the same shall
constitute a binding agreement.  A signed copy of this Agreement received via
facsimile shall be deemed an original signature of a party for purposes of
making this Agreement a binding agreement.

IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement as
of and from the day first above written.

 
LILIS ENERGY, INC.
     
By:
/s/ A. Bradley Gabbard
 
Name:
A. Bradley Gabbard
 
Title:
Chief Operating Officer

 

 
T.R. WINSTON & COMPANY, LLC
     
By:
/s/ G. Tyler Runnels
 
Name:
G. Tyler Runnels
 
Title:
Chairman & CEO

 
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