Document:

Exhibit
4.1

 

THIS
NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED.

  

CONVERTIBLE
SUBORDINATED PROMISSORY NOTE

 

FOR
VALUE RECEIVED, Lilis Energy, Inc. (the "Borrower"), hereby promises to pay to [LENDER] (the "Holder")
or order, without demand, the sum of [ ] ($[ ]), with interest accruing from the date hereof at a rate per annum of twelve percent
(12.0%), payable on June [ ], 2016, or earlier, as described below.

 

This
Note has been entered into pursuant to the terms of a purchase agreement between the Borrower and the Holder, dated of even date
herewith (the "Purchase Agreement"), and shall be governed by the terms of such Purchase Agreement. Unless otherwise
separately defined herein, all capitalized terms used in this Note shall have the same meaning as is set forth in the Purchase
Agreement. The following terms shall apply to this Note:

 

1.
PRINCIPAL, INTEREST, MATURITY AND PAYMENT DATES 
 
  

1.1
Payment. The original principal amount of this Note (the “Loan”), and all interest accrued thereon, shall be
due and payable on the Maturity Date, accelerated or otherwise, when the principal and remaining accrued but unpaid interest shall
be due and payable, or sooner as described below.

 

1.2  
Interest Rate. Interest payable on this Note shall accrue at the annual rate of twelve percent (12.0%) (the “Applicable
Rate”).

 

1.3  
Default Interest. If any amount payable hereunder is not paid when due, whether at stated maturity, by acceleration or
otherwise, the Borrower shall have a thirty (30) day grace period, after which grace period such overdue amount shall be interest
at a default rate of the Applicable Rate plus two percent (2.0%) from the date of such non-payment until such amount is paid in
full.

 

1.4  
Computation of Interest. All computations of interest shall be made on the basis of a year of 360 days and the actual number
of days elapsed. Interest shall accrue on the Loan on the day on which such Loan is made, and shall not accrue on the Loan on
the day on which it is paid.

 

1.5  
Optional Prepayment. The Borrower may prepay the Loan in whole or in part at any time or from time to time by paying all
or a portion of the principal amount to be prepaid together with accrued interest thereon to the date of prepayment at a premium
of three percent (3.0%) of the prepayment amount for the first 120 days and at a premium of five percent (5%) of the prepayment
amount thereafter. No prepaid amount may be re-borrowed. Notwithstanding the forgoing, as long as any Senior Indebtedness (as
defined below) is outstanding, no amounts due under this Note may be prepaid.

 

    	 	1	 

     

    

 

2. CONVERSION
RIGHTS

 

The
Holder shall have the right to convert the principal due under this Note into Shares of the Borrower's common stock, par value
$.0001 per share (the "Shares") as set forth below.

 

2.1.
Conversion into the Borrower's Common Stock.

 

(a)
The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully
paid, to convert any outstanding and unpaid principal portion of this Note, at the election of the Holder (the date of giving
of such notice of conversion being a "Conversion Date") into Shares as such Shares exist on the date of issuance of
this Note, or any Shares of Borrower into which such Shares shall hereafter be changed or reclassified, at the Conversion Price
as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower
of a completed Notice of Conversion, a form of which is annexed hereto, Borrower shall issue and deliver to the Holder within
three (3) business days from the Conversion Date (such third day being the "Delivery Date") that number of Shares for
the portion of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued
but unpaid interest on the Note in the manner provided in Section 1.2 through the Conversion Date directly to the Holder on or
before the Delivery Date. The number of Shares to be issued upon each conversion of this Note shall be determined by dividing
that portion of the principal of the Note, by the Conversion Price.

 

(b)
Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion Price per Share shall be equal to $0.50.

 

(c)
The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section
2.1(a), shall be subject to adjustment from time to time upon the happening of certain events while this conversion right remains
outstanding, as follows:

 

A.
Merger, Sale of Assets, etc. If the Borrower at any time shall consolidate with or merge into or sell or convey all or substantially
all its assets to any other corporation, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase such number and kind of shares or other securities and property as would
have been issuable or distributable on account of such consolidation, merger, sale or conveyance, upon or with respect to the
securities subject to the conversion or purchase right immediately prior to such consolidation, merger, sale or conveyance. The
foregoing provision shall similarly apply to successive transactions of a similar nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such consolidation, merger, sale or conveyance.

 

B.
Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Shares into the same or
a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number
of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common
Stock immediately prior to such reclassification or other change.

 

C.
Stock Splits, Combinations and Dividends. If the Shares are subdivided or combined into a greater or smaller number of shares
of Shares, or if a dividend is paid on the Shares in Shares, the Conversion Price shall be proportionately reduced in case of
subdivision of Shares or stock dividend or proportionately increased in the case of combination of Shares, in each such case by
the ratio which the total number of Shares outstanding immediately after such event bears to the total number of Shares outstanding
immediately prior to such event.

 

    	 	2	 

     

    

 

(d)
Whenever the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower shall promptly mail to the Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

 

(e)
During the period the conversion right exists, Borrower will reserve from its authorized and unissued Shares a sufficient number
of shares to be equal to the number of Shares issuable upon the full conversion of this Note. Borrower agrees that its issuance
of this Note shall constitute full authority to its members, officers, agents, and transfer agents who are charged with the duty
of executing and issuing stock certificates to execute and issue the necessary certificates for the Shares upon the conversion
of this Note.

 

2.2 
Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof.
Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of
the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been
converted or paid.

 

2.3 
Mechanics and Effect of Conversion. No fractional shares of the Company’s Shares will be issued upon conversion of
this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder
in cash the amount of the unconverted principal balance of this Note that would otherwise be converted into such fractional share.
Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the
principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable
thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of Shares
to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is
entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable
as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities
under this Note with regard to that portion of the principal amount being converted, including without limitation the obligation
to pay such portion of the principal amount.

 

2.4 
Conversion Privileges. The Conversion Privileges set forth in this Section 2 shall remain in full force and effect immediately
from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. The Note shall be
payable in full on the Maturity Date, unless previously converted into Shares in accordance with Section 2 hereof or redeemed
pursuant to Section 5 hereof.

 

3.  SUBORDINATION. The Borrower agrees, and the Holder by accepting this Note likewise agrees, that the Subordinated Indebtedness
is hereby expressly subordinated, to the extent and in the manner set forth herein, to the Senior Indebtedness. As used herein,
“Senior Indebtedness” shall mean all present or future indebtedness of, or indebtedness guaranteed by, the
Borrower or its subsidiaries, including, without limitation, any money borrowed under the Credit Agreement, dated January 8, 2015,
among Lilis Energy, Inc., Heartland Bank, as administrative agent, and the other lender parties thereto, as amended, including
without limitation all principal and interest (including such interest as may accrue after the initiation of bankruptcy proceedings,
without regard as to whether such interest is an allowed claim in such bankruptcy proceedings) on such indebtedness, and all premiums,
fees, expenses and other obligations owing by the Borrower or its subsidiaries to any lender in respect of such indebtedness,
and any and all related notes, agreements, documents and instruments, all as amended, modified, restated, renewed, refinanced,
extended and supplemented from time to time.

 

    	 	3	 

     

    

 

3.1
Liquidation. In the event of any bankruptcy, insolvency, receivership, dissolution, winding up, liquidation or reorganization
of the Borrower (whether in bankruptcy, insolvency or receivership proceedings or otherwise), or any assignment for the benefit
of creditors, or any other marshaling of the assets and liabilities of the Borrower for the benefit of any creditor or creditors
or otherwise (a “Liquidation”):

 

(a)
all Senior Indebtedness shall first be paid in full before any payment or distribution of any character, whether in cash, securities
or other property, shall be made in respect of the Subordinated Indebtedness;

 

(b)
any payment or distribution of any character, whether in cash, securities or other property, which (except for the terms of this
Section 3.1) would be payable or deliverable in respect of the Subordinated Indebtedness shall be paid or delivered directly to
the holders of Senior Indebtedness to the extent necessary to pay all Senior Indebtedness in full after giving effect to any concurrent
payment or distribution in respect of such Senior Indebtedness; and

 

(c)
if, notwithstanding the foregoing terms of this Section 3.1, any payment or distribution of any character, whether in cash, securities
or other property, shall be received in a Liquidation in respect of the Subordinated Indebtedness before all Senior Indebtedness
shall have been paid in full as aforesaid, such payment or distribution shall be held in trust for the benefit of, and shall be
paid or delivered to, the holders of Senior Indebtedness to the extent necessary to pay all Senior Indebtedness in full after
giving effect to any concurrent payment or distribution in respect of such Senior Indebtedness, provided, however,
that such amounts paid to the holders of Senior Indebtedness shall not be deemed to discharge the Subordinated Indebtedness.

 

3.2
Payments in Respect of Senior Indebtedness. For all purposes of this Section 3: (a) Senior Indebtedness shall not
be deemed to have been paid in full unless and until the holders thereof shall have indefeasibly received cash equal to the full
amount of such Senior Indebtedness at the time outstanding and all commitments to extend further credit to the Borrower have terminated,
and (b) any payment or distribution required to be paid or delivered to the holders of Senior Indebtedness shall be deemed
to have been received by such holders if paid or delivered to an authorized agent or agents, or representative or representatives,
of such holders.

 

3.3
Further Assurances. The Holder (a) irrevocably authorizes and empowers (without imposing any obligation on) each holder
of Senior Indebtedness or such holder’s representatives, to accelerate, demand, sue for, collect, receive and give receipt
for such holder’s ratable share of all payments and distributions in respect of the Subordinated Indebtedness which are
required to be paid or delivered to the holders of Senior Indebtedness as provided in Section 3.1 hereof, and to execute, verify,
deliver and file any proofs of claims and take all such other action in the name of the Holder or otherwise, as such holder of
Senior Indebtedness or such holder’s representatives may determine to be necessary or appropriate for the enforcement of
such holder’s rights under Section 3.1 hereof, and (b) shall execute and deliver to each holder of Senior Indebtedness
or such holder’s representatives such other instruments confirming such authorization and such powers of attorney, proofs
of claim, assignments of claim and/or rights, financing statements and other instruments, and shall take all such other action
as may be reasonably requested by such holder or such holder’s representatives in order to enable such holder to enforce
the Holder’s Subordinated Indebtedness and all such payments and distributions in respect thereof, and to otherwise enforce
the subordination provisions of this Section 3 and to perfect its rights herein.

 

    	 	4	 

     

    

 

3.4
Modifications of Senior Indebtedness and Security. The holders of the Senior Indebtedness may, at any time and from time
to time with or without notice, without impairing or releasing the subordination provisions of this Section 3, do any one or more
of the following: (a) change the manner, place, terms or amount of payment of, or change or extend the time of payment of
or renew or alter, the Senior Indebtedness, or amend, modify, supplement or terminate in any manner any instrument, document or
agreement relating to the Senior Indebtedness; (b) release any person or entity liable in any manner for the payment or collection
of the Senior Indebtedness; (c) exercise or refrain from exercising any rights in respect of the Senior Indebtedness against
the Borrower or any other person or entity; (d) apply any monies or other property paid by any person or entity or otherwise
released in any manner to the Senior Indebtedness; or (e) accept or release any security for the Senior Indebtedness. The
subordination provisions of this Section 2 shall continue without impairment even if any liens securing the Senior Indebtedness
are subordinated, set aside, avoided or disallowed. The subordination provisions shall be reinstated if at any time any payment
of the Senior Indebtedness is rescinded or must otherwise be returned by any holder of Senior Indebtedness.

 

3.5
Modification or Waiver of Note. No amendment, modification or waiver of the terms of this Section 3 shall be effective
without the prior written consent of such holders of the Senior Indebtedness necessary to bind all of the holders of Senior Indebtedness.

 

3.6
Obligation of Borrower to Pay Absolute. Nothing contained in this Section 3 shall impair, as between the Borrower and the
Holder, the obligation of the Borrower to pay all indebtedness evidenced by this Note when and as the same becomes due and payable
as provided herein.

 

3.7
Third Party Beneficiaries. The holders of Senior Indebtedness are intended third party beneficiaries of the provisions
of this Section 3 and, as such, shall be permitted to enforce such provisions in all respects.

 

 4. EVENTS OF DEFAULT

 

The
occurrence of any of the following events of default ("Event of Default") shall, at the option of the Holder hereof,
make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and
payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth below,
provided that (a) such payments are not prohibited under the terms of any Senior Indebtedness, (b) the payments of such
amount would not materially adversely affect the Borrower’s ability to make required payments, when due, under any Senior
Indebtedness or (c) the payments of such amount would not materially adversely affect the Borrower’s working capital or
cause the Borrower to have insufficient cash balances to operate its business, in each case as determined by the Borrower’s
senior management.

 

4.1
Failure to Pay Principal or Interest. The Borrower fails to pay principal, interest or other sum due under this Note when
due and such failure continues for a period of sixty (60) days after the due date.

 

4.2
Failure to Deliver Shares or Replacement Note. Borrower's failure to timely deliver Shares to the Holder pursuant to and
in the form required by this Note, or, if required, a replacement Note.

 

5. MISCELLANEOUS 

 

5.1
Failure or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

    	 	5	 

     

    

 

5.2
Notices. All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered
in writing, in each case to the address specified below or to such other address as such Party may from time to time specify in
writing in compliance with this provision:

 

(i) If to the Borrower:

Lilis
Energy, Inc.

216
16th Street, Suite #1350

Denver,
Colorado 80202

 

Attn:
Kevin Nanke

Telephone:
(303) 893-9000, Facsimile: [NUMBER]

E-mail:
knanke@lilisenergy.com

 

 (ii) If to the Holder:

[ADDRESS]

Attn:
[NAME OF CONTACT]

Telephone:
[NUMBER], Facsimile: [NUMBER]

E-mail:
[ADDRESS]

 

Notices
if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given
when received; (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent
(and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the
next business day); and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the
intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written
acknowledgment).

 

5.3
Amendment and Waiver. The term "Note" and all reference thereto, as used throughout this instrument, shall mean
this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented. No term of this
Note may be waived, modified or amended except by an instrument in writing signed by both of the parties hereto. Any waiver of
the terms hereof shall be effective only in the specific instance and for the specific purpose given.

 

5.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit
of the Holder and its successors and assigns.

 

5.5
Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs
of collection, including reasonable attorneys' fees.

 

5.6
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York. Any action
brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in
the state courts of New York or in the federal courts located in the state of New York. Both parties and the individual signing
this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs.

 

    	 	6	 

     

    

 

5.7 Maximum
Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or
other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

5.8
Shareholder Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions
of this Note. However, the Holder will have all the rights of a shareholder of the Borrower with respect to the Shares to be received
by Holder after delivery by the Holder of a Conversion Notice to the Borrower.

 

5.9
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as
possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable
in accordance with its terms.

 

5.10
Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties
hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties
hereto are expressly canceled.

  

[REMAINDER
OF THE PAGE INTENTIONALLY LEFT BLANK]

 

    	 	7	 

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ____ day of [ ],
2015.

 

	 	Borrower: Lilis Energy, Inc.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	Holder:
	[         ]
		 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 

 

    	 	8	 

     

    

 

NOTICE
OF CONVERSION

 

(To
be executed by the Registered Holder in order to convert the Note)

  

The
undersigned hereby elects to convert $_________ of the principal and $_________ of the interest due on the Note issued by Lilis
Energy, Inc. (the “Borrower”) on December ____, 2015, into Shares of the Borrower according to the conditions set
forth in such Note, as of the date written below.

 

Date
of Conversion:____________________________________________________________

 

 

Conversion
Price:______________________________________________________________

 

 

Shares
To Be Delivered:________________________________________________________

 

 

Signature:_____________________________________________________________________

 

 

Print
Name:____________________________________________________________________

 

 

Address:_______________________________________________________________________Exhibit 4.2

 

NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

COMMON
STOCK PURCHASE WARRANT

 

LILIS
ENERGY, INC.

 

	Warrant Shares: _______	Initial Exercise Date:
		Original
Issue Date:

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or [his, her
or its] assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after ____________ (the “Initial Exercise Date”) and on
or prior to 3:00 p.m. Mountain Time on the third year anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Lilis Energy, Inc., a Nevada corporation (the “Company”),
up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s common
stock (“Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b), or as adjusted as set forth below.

 

In
connection with the investment by the Holders (as defined in the Purchase Agreement) in Lilis Energy, Inc., a Nevada Corporation
(the “Company”), pursuant to the terms of that certain Purchase Agreement dated on our around the date hereof
(the “Purchase Agreement”), which provides for the sale of an original issue discount senior subordinated promissory
note in substantially the form attached as an exhibit to the Purchase Agreement (the “Note”), the Company has
elected to issue this Warrant to the Holder as additional consideration for its willingness to enter into and perform the Purchase
Agreement.

 

    	 	1	 

     

    

 

Section
1.        Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings
indicated in this Section 1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

  

“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transfer
Agent” means Corporate Stock Transfer, the current transfer agent of the Company, with a mailing address of 3200 Cherry
Creek South Drive, Suite 430, Denver, Colorado 80209 and a facsimile number of (303) 282-5800, and any successor transfer agent
of the Company.

 

    	 	2	 

     

    

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for
the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent closing bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by
the Company.

 

Section
2.        Exercise.

 

a)      Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before 3:00 p.m. Mountain time on the Termination Date by delivery to the Company
(or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address
of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed
hereto. Within three (3) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the
Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof.

 

    	 	3	 

     

    

 

b)      Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $[ ], subject to adjustment hereunder
(the “Exercise Price”).

 

c)       Cashless
Exercise. If at any time after the six month anniversary of the Initial Exercise Date, there is no effective registration
statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant
may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	 	(A)	= the VWAP of one share of Common Stock on the Trading
Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,”
as set forth in the applicable Notice of Exercise;

 

	 	(B)	= the Exercise Price of this Warrant, as adjusted hereunder;
and

 

	 	(X)	= the number of Warrant Shares that would be issuable
upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.

 

		d)	  Mechanics
                                         of Exercise.

 

i.       Delivery
of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder
by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal
at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder
or (B) the shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and
otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise and (B) surrender of this Warrant (if
required) (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless
exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance
of such shares, having been paid.

 

    	 	4	 

     

    

 

ii.       Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iii.      Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.     No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

v.      Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event Warrant Shares are to be issued in a name other than the name of the
Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.

 

vi.     Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

 

    	 	5	 

     

    

 

e)      Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own
in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. 
Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged
by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall
be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and
of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, each Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that
such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in the most recent of the following: (A) the Company’s most recent periodic
or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Holder, the Company shall within two Trading Days 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, including this Warrant, by the Holder
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) 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. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.

 

    	 	6	 

     

    

 

f)       Stockholder
Approval. Notwithstanding anything in this Agreement to the contrary, under no circumstances shall the Company effect an exercise
of this Warrant into Common Stock without first obtaining stockholder approval if required by law or Nasdaq Marketplace Rule.

 

Section
3.        Certain Adjustments.

 

a)      Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

    	 	7	 

     

    

 

b)      Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common 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 or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. Any such successor or surviving entity shall be deemed to be required to comply with the provisions of this
Section 3(b) and shall insure that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

 

c)      Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)      Notice
to Holder.

 

i.       Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the
number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

    	 	8	 

     

    

 

ii.      Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.

 

Section
4.        Transfer of Warrant.

 

a)      Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and
all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

    	 	9	 

     

    

 

b)      New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Original
Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)      Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

 

d)      Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, may be required by the Company to provide an opinion of counsel
with regard to such assignment or transfer in a form satisfactory to the Company in its reasonable discretion.

 

e)      Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.

 

Section
5.        Miscellaneous.

 

a)      No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Section 3.

 

b)      Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

    	 	10	 

     

    

 

c)      Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

d)      Authorized
Shares.

 

i.       The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers
who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements
of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).

 

ii.      If,
notwithstanding the foregoing, and not in limitation thereof, at any time while the 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 the Required
Reserve Amount (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 all the Warrants 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, 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 reasonable 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.

 

    	 	11	 

     

    

  

iii.      Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, 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, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above
the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Warrant.

 

iv.      Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)      Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

f)       Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall
be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those
of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.

 

    	 	12	 

     

    

 

g)      Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be in
writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (c) the 2nd Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be
given.

 

h)      Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

i)       Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.

 

j)       Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.

 

k)      Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

l)       Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.

 

m)      Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

    	 	13	 

     

    

 

n)      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. The Company hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to the Company at the address set forth in the Purchase Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

********************

 

(Signature
Page Follows)

 

    	 	14	 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.

 

	 	LILIS ENERGY, INC.  

	 	 	 
	 	By:

        

        

        

        
	
	 	Name: 	Abraham Mirman
	 	Title:	Chief Executive Officer 

 

    	 	15	 

     

    

 

NOTICE
OF EXERCISE

 

To:      LILIS
Energy, inc.

 

(1)The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.

 

(2)Payment
shall take the form of (check applicable box):

 

[   ] in lawful money of the United States; or

 

[   ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c).

 

(3)Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

  

The
Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

_______________________________

  

_______________________________

  

_______________________________

 

  

(4)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under
the Securities Act of 1933, as amended.

  

[SIGNATURE
OF HOLDER]

  

Name
of Investing Entity: ________________________________________________________________________

Signature
of Authorized Signatory of Investing Entity: _________________________________________________

Name
of Authorized Signatory: ___________________________________________________________________

Title
of Authorized Signatory: ____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

     

     

    

 

ASSIGNMENT
FORM

  

(To
assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

  

FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned
to 

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

  

Dated:
______________, _______

 

Holder’s
Signature:    _____________________________

  

Holder’s
Address:      _____________________________

 

                                     _____________________________

  

NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration
or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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