Exhibit 4.3


 





NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


Lilis
Energy, Inc.


 


Warrant
To Purchase Common Stock


 


Number of Shares of Common Stock: 1,000,000


Date of Issuance: September 2, 2014 ("Issuance
Date")





 


Lilis Energy, Inc., a Nevada
corporation, (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bristol Capital, LLC, the registered holder hereof or its permitted assigns (the "Holder"),
is entitled, subject to the terms set forth below and pursuant to a Consulting Agreement between the Company and Consultant entered
into on September 2, 2014 (the “Consulting Agreement”), to purchase from the Company, at the Exercise Price (as defined
below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock
issued in exchange, transfer or replacement hereof, the "Warrant"), at any time or times on or after the date
hereof, but not after 11:59 p.m., New York Time, on the Expiration Date (as defined below), One Million (1,000,000) fully paid
nonassessable shares of Common Stock (as defined below) (the "Warrant Shares"). Except as otherwise defined
herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16. In the event of any conflict between
the terms of this Warrant and the Consulting Agreement, the terms of the Consulting Agreement shall govern.


 






    	 



    	 



    

 


1.EXERCISE OF WARRANT.


 


(a)Mechanics of
Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the date hereof in whole or in part, by (i) delivery of
a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), via electronic mail
to an e-mail address provided by the Company, of the Holder's election to exercise this Warrant and (ii) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being
exercised (the "Aggregate Exercise Price") in cash or by wire transfer of immediately available funds or (B) by
notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(f)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise
Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the third Business
Day following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (or notice
of a Cashless Exercise) (the "Exercise Delivery Documents"), the Company shall transmit by facsimile or electronic
mail to an e-mail address provided by an authorized representative of the Holder an acknowledgment of confirmation of receipt of
the Exercise Delivery Documents to the Holder and the Company's transfer agent (the "Transfer Agent"). On or before
the third Trading Day following the date on which the Company has received all of the Exercise Delivery Documents (the "Share
Delivery Date"), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company
("DTC") Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number
of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account
with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice,
a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of
delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and
in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section
7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded
up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant.


 


(b)Exercise Price.
For purposes of this Warrant, “Exercise Price” means $2.00, subject to adjustment as provided herein.


 






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(c)Company's Failure
to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder within three
(3) Trading Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common Stock to which
the Holder is entitled and register such shares of Common Stock on the Company's share register or to credit the Holder's balance
account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant,
and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company (a "Buy-In"), then, in addition to all other remedies available to the Holder, the
Company shall, within three Business Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the
Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such certificate (and
to issue such shares of Common Stock) or credit such Holder's balance account with DTC shall terminate, or (ii) promptly honor
its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's
balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise.


 


(d)Cashless Exercise.
 Notwithstanding anything contained herein to the contrary, if a Registration Statement covering the resale of the Warrant
Shares that are the subject of the Exercise Notice (the "Unavailable Warrant Shares") is not available or has
not been demanded for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant
in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of
Common Stock determined according to the following formula (a "Cashless Exercise"):


 





	 	Net Number = (A x B) - (A x C)	 
	 	B		 
	 	 	 	 
	 	For purposes of the foregoing formula:	 







 


A= the total number of shares
with respect to which this Warrant is then being exercised.


 


B= the Closing Sale Price of the shares of Common
Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice.


 


C= the Exercise Price then
in effect for the applicable Warrant Shares at the time of such exercise.


 


(e)Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.


 






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(f)Limitation
on Exercises. The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise
this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person's affiliates) would
beneficially own in excess of 4.99% (the "Maximum Percentage") of the shares of Common Stock outstanding immediately
after giving effect to such exercise; provided that the Holder may waive the limitations set forth herein to increase its beneficial
ownership to 9.9% with sixty-one (61) days written notice to the Company. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of
any other securities of the Company beneficially owned by such Person and its affiliates (including, without limitation, any convertible
notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation
contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company's most recent Form 10-K, Form 10-Q, Current Report on Form
8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business
Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section1(f) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect
to such limitation.


 


(g)Insufficient
Authorized Shares. If at any time while this Warrant remain outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 130% (the "Required Reserve Amount") of the number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding (an "Authorized
Share Failure"), then the Company shall immediately take all action necessary to increase the Company's authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal.


 






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2.ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time
to time as follows:


 


(a)Adjustment upon
Issuance of shares of Common Stock. If and whenever on or after the Issuance Date, while this Warrant is outstanding, the Company
issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, to any third party providing consulting
services to the Company (other than Consultant or its affiliates), any shares of Common Stock for a consideration per share (the
"New Issuance Price") less than the Exercise Price (the "Applicable Price") in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For purposes of determining the adjusted Exercise Price under this Section 2(a), the following shall be applicable:


 


(i)Issuance
of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For
purposes of this Section 2(a)(i), the "lowest price per share for which one share of Common Stock is issuable upon exercise
of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of any such Option"
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price shall
be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options
or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.


 






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(ii)Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof"
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such
Convertible Security. No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common
Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities
is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions
of this Section 2(a), no further adjustment of the Exercise Price shall be made by reason of such issue or sale.


 


(iii)Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a)(iii) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.


 






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(iv)Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto,
the Option Value will be calculated as set forth in Section 1(b). If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the
Company will be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may
be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company
and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation
(the "Valuation Event"), the fair value of such consideration will be determined within five (5) Business Days
after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the
Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company.


 


(v)Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.


 


(b)Adjustment upon
Subdivision or Combination of shares of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the
close of business on the date the subdivision or combination becomes effective.


 






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(c)Voluntary Adjustment By Company.
The Company may at any time during the term of this Warrant reduce the then current  Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company. 


 


(d)Other Events.
If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions,
then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares
so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(d) will increase the Exercise
Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.


 


3.RIGHTS UPON DISTRIBUTION
OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this
Warrant, then, in each such case:


 


(a)any Exercise Price
in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price
determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the shares
of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in
good faith by the Company's Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the
Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and


 


(b)the number of Warrant
Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the
close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution
multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that
the Distribution is of shares of common stock ("Other Shares of Common Stock") of a company whose common shares
are traded on a national securities exchange or a national automated quotation system, then the Holder may elect to receive a warrant
to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical
to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock
that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior
to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this
Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the
number of Warrant Shares calculated in accordance with the first part of this paragraph (b).


 






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4.PURCHASE RIGHTS;
FUNDAMENTAL TRANSACTIONS.


 


(a)Purchase Rights.
In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares
of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.


 


(b)Fundamental Transactions.
The Company shall not enter into or be party to a Fundamental Transaction (other than with respect to a Change of Control with
a Public Successor or with respect to a Change of Control with a Public Successor where the sole consideration in such Change of
Control transaction is cash (each, an "Excluded Change of Control Transaction")) unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by
the Holder prior to such Fundamental Transaction, including agreements to deliver to each holder of Warrants in exchange for such
Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected
by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Holder. Upon the occurrence of any Fundamental
Transaction (other than an Excluded Change of Control Transaction), the Successor Entity shall succeed to, and be substituted for
(so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the "Company"
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of the Fundamental Transaction (other than an Excluded Change of Control Transaction), the Successor Entity shall
deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of the publicly traded Common Stock
(or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of such Fundamental Transaction had this Warrant been converted immediately prior to such Fundamental Transaction,
as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder,
prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common Stock (a "Corporate Event"), the
Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of
this Warrant at any time after the consummation of the Fundamental Transaction but prior to the ninetieth (90th) day after the
consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other
property) purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would
have been entitled to receive upon the happening of such Fundamental Transaction had the Warrant been exercised immediately prior
to such Fundamental Transaction. Provision made pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Holder. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.


 






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5.WARRANT HOLDER NOT
DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder
of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 5, the Company shall provide the Holder with copies of the same notices
and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.


 


6.NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting
the exercise of this Warrant, 130% of the number of shares of Common Stock as shall from time to time be necessary to effect the
exercise of this Warrant (without regard to any limitations on exercise).


 






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7.REISSUANCE OF WARRANTS.


 


(a)Transfer of Warrant.
If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number
of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.


 


(b)Lost, Stolen
or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant
Shares then underlying this Warrant.


 


(c)Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional
shares of Common Stock shall be given.


 


(d)Issuance of New
Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i)
shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section
7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant),
(iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv)
shall have the same rights and conditions as this Warrant.


 






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8.NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given to the
Holder at the following address: 1100 Glendon Ave., Suite 850, Los Angeles, CA 90024. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A)
with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales
of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being
provided to the Holder.


 


9.AMENDMENT AND
WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written
consent of the Holder.


 


10.GOVERNING LAW.
This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York.


 


11.CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.


 


12.DISPUTE RESOLUTION.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of
the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two Business Days submit
via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the
Company and approved by the Holder, or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent,
outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation,
as the case may be, shall be binding upon all parties absent demonstrable error, provided however that if the determination is
made by the Company's accountants, the Holder may request that a second accounting firm that is determined by the Holder to be
independent also perform its own calculation to confirm the first calculation.


 






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13.REMEDIES, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder right to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition
to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without
any bond or other security being required.


 


14.TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.


 


15.SEVERABILITY.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


16.CERTAIN DEFINITIONS.
For purposes of this Warrant, the following terms shall have the following meanings:


 


(a)"Bloomberg"
means Bloomberg Financial Markets.


 


(b)"Business
Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.


 






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(c)"Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during the applicable calculation period.


 


(d)"Common Stock" means
(i) the Company's shares of Common Stock, par value $0.0001 per share, and (ii) any share capital into which such Common
Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.


 


(e)"Convertible Securities"
means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares
of Common Stock.


 


(f)"Eligible
Market" means the Principal Market, the NYSE Amex, The New York Stock Exchange, Inc., The NASDAQ Global Market, The NASDAQ
Capital Market or The NASDAQ Global Select Market.


 


(g)"Expiration
Date" means sixty (60) months after the Issuance Date or, if any such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a "Holiday"), the next day that is not a Holiday.


 






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(h)"Fundamental
Transaction" means that (i) the Company shall, directly or indirectly, in one or more related transactions, (A) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person or Persons, if the holders of the
Voting Stock (not including any shares of Voting Stock held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such consolidation or merger) immediately prior to such consolidation or merger shall hold
or have the right to direct the voting of less than 50% of the Voting Stock or such voting securities of such other surviving Person
immediately following such transaction, or (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company to another Person, or (C) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of the outstanding shares of Voting Stock (not including any shares
of Voting Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party
to, such purchase, tender or exchange offer), or (D) consummate a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other
Person acquires more than the 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the
other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock
purchase agreement or other business combination), (E) reorganize, recapitalize or reclassify its Common Stock or (ii) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
Voting Stock of the Company.


 


(i)"Options" means any
rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(j)"Parent
Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(k)"Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(l)"Principal
Market" means the NASDAQ Global Market.


 


(m)"Public
Successor" means a Successor Entity that is not a publicly traded corporation whose common stock is quoted on or listed
for trading on an Eligible Market.


 


(n)"Successor
Entity" means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.


 


(o)"Trading
Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).


 






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(p)"Voting
Stock" of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).


 


[Signature Page Follows]


 









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IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 





	 	Lilis
                                         Energy, Inc.




	 	 	 
	 	By:	/s/
    Abraham Mirman
	 	Name:	Abraham
    Mirman
	 	Title:	Chief
    Executive Officer







 









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EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


LILIS ENERGY,
INC.


  


The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of Lilis
Energy, Inc., a Nevada corporation (the "Company"), evidenced by the attached Warrant to Purchase Common Stock
(the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.


 


1. Payment of Exercise Price. The holder
shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.


 


2. Delivery of Warrant Shares. The
Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.


 


Date: _______________ __, ______


 


_____________________________


Name of Registered Holder


 


	By:		 
	 	Name:	
	 	Title:	


  



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ACKNOWLEDGMENT


 


The Company hereby acknowledges
this Exercise Notice and hereby directs [Name of Transfer Agent] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated _____________ from the Company and acknowledged and agreed to by [Name
of Transfer Agent].


  





	 	LILIS ENERGY, INC.
	 	 	 
	 	By:	
	 	Name:	
	 	Title:	


 


 


19