Document:

Exhibit
10.5

 

FORM
OF CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This
Convertible Note Purchase Agreement (the “Agreement”) is made as of the [    ]th day of
December, 2015 by and between Lilis Energy, Inc., a Nevada corporation (the “Company”), and [         ]
(the “Purchaser”).

 

RECITALS

 

The
Company desires to issue and sell, and the Purchaser desires to purchase, (i) a convertible promissory note in substantially the
form attached hereto as Exhibit A (the “Note”) in an aggregate principal amount of [         ]
Dollars ($[    ]) convertible into shares of common stock, par value $0.0001 per share, (the “Common
Stock”) of the Company (the “Conversion Shares”) at a conversion price of $0.50 and (ii) a warrant
registered in the name of the Purchaser in the form attached hereto as Exhibit B (the “Warrant”) to
purchase, at any time following the Closing Date (as defined below) of the offering and prior to the third (3rd) anniversary
of the date hereof (the “Warrant Expiration Date”), a number of shares of Common Stock as set forth therein
(the “Warrant Shares” and, collectively with the Note, the Conversion Shares and the Warrant, the “Securities”),
upon the terms and conditions set forth below. Notwithstanding the forgoing, both the conversion of the Note and the exercise
of the Warrant, shall be subject to the receipt of requisite stockholder approval pursuant to the Nasdaq Marketplace Rules (“Nasdaq”),
in the event the Company deems it necessary to maintain compliance with Nasdaq; and

 

The
Company has existing secured loans from Heartland Bank (the “Heartland Bank Indebtedness”), which Heartland
Bank Indebtedness shall be senior in ranking to the indebtedness contemplated by this Agreement. The Company has additional existing
secured indebtedness in the form of its 8.0% Senior Secured Convertible Debentures due 2018, which indebtedness is junior in priority
to the Heartland Bank Indebtedness but shall also be senior in priority to the Note. This Agreement, together with the Note and
any and all amendments and modifications thereof, are individually referred to in this Agreement as a “Loan Document”
and collectively referred to as the “Loan Documents.” Capitalized terms used but not defined herein shall have
the meaning assigned to them in the Note.

 

In
consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged,
the parties to this Agreement agree as follows:

 

ARTICLE
I 

SECURITIES

1.   Purchase
and Sale of Securities.

 

1.01         Sale
and Issuance of Note: Subject to the terms and conditions of this Agreement, Purchaser agrees to purchase at the Closing
Date (as defined below) and the Company agrees to sell and issue to Purchaser the Note. The purchase price of the Note shall
be equal to 100% of the principal amount thereof.

 

     

     

    

 

1.02        Description.

 

		i)	Note.
                                         The Note will be dated the date of issue, to mature as set forth therein.
	 	 	 
		ii)	Conversion
                                         Shares. The Note will be convertible into shares of Common Stock, subject to stockholder
                                         approval as deemed necessary by the Company, at a conversion price of $0.50, subject
                                         to certain adjustments as described in the Note.
	 	 	 
		iii)	Warrant.
                                         The Warrant shall entitle the holder to purchase, at any time following the Closing Date
                                         and prior to the Warrant Expiration Date, subject to stockholder approval as deemed necessary
                                         by the Company, the Warrant Shares at an initial exercise price equal to $0.25, subject
                                         to adjustments as described in the Warrant.

 

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

 

1.04        Execution
of Equity Agreements. Purchaser understands and agrees that the conversion of the Note into equity securities of the Company
and the delivery of the duly executed certificates evidencing such equity securities will require Purchaser’s execution
of certain mutually acceptable agreements relating to the purchase and sale of such securities as well as any rights relating
to such equity securities, to the extent Purchaser has not already executed such agreements.

 

ARTICLE
II

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

 

The
Company hereby represents and warrants to the Purchaser that:

 

2.01.       Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted
and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction
in which the failure so to qualify would have a material adverse effect on its business or properties.

 

2.02        Authorization.
The Company has all requisite power and authority to execute, deliver and perform its obligations under the Loan Documents. The
execution and delivery of the Loan Documents, and the consummation by the Company of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action and no further action on the part of the Company or its Board of Directors
is required, except that the Company may be required to obtain stockholder approval pursuant to Nasdaq Marketplace Rules prior
to conversion of the Note or exercise of the Warrant by Purchaser. The Loan Documents have been validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company enforceable against the Company in accordance
with their terms, except to the extent (i) rights to indemnity and contribution may be limited by state or federal securities
laws or the public policy underlying such laws, (ii) such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and (iii)
such enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

 

2.03        Absence
of Required Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration
or filing with, any governmental authority on the part of the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for such filing(s) pursuant to applicable securities laws as may be necessary, which filing
will be timely effected after the Closing Date.

 

    	 	2	 

     

    

 

2.04        Offering. Subject in part to the truth and accuracy of the Purchaser’s representations set forth in Article
III of this Agreement, the offer, sale and issuance of the Note as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act of 1933, as amended, and will not result in a violation of the qualification or registration
requirements of any applicable state securities laws.

 

ARTICLE
III

REPRESENTATIONS
OF THE PURCHASERS

 

Purchaser
represents and warrants to the Company as follows:

 

3.01        Accredited
Investor. Purchaser is an “accredited investor” as defined by Rule 501 of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended (the “Act”), and Purchaser is capable of evaluating
the merits and risks of Purchaser’s investment in the Company and has the ability and capacity to protect Purchaser’s
own interests.

 

3.02        Securities
Unregistered. Purchaser understands that the Securities will not be registered under the Act on the grounds that the issuance
thereof is exempt from the registration requirements of the Act by Section 4(2) of the Act and/or Regulation D promulgated thereunder
as a transaction by an issuer not involving any public offering and that, in the view of the United States Securities and Exchange
Commission (the “Commission”), the statutory basis for the exception claimed would not be present if the representations
and warranties of Purchaser contained in this Agreement or the Confidential Purchaser Questionnaire attached hereto as Exhibit
C are untrue or, notwithstanding Purchaser’s representations and warranties, Purchaser currently has in mind acquiring the
Securities for resale or distribution upon the occurrence or non-occurrence of some predetermined event. Purchaser is aware that
the Securities are and will be, when issued, “restricted securities” as that term is defined in Rule 144 promulgated
under the Act.

 

3.03        Legend.

 

(a)          Purchaser
understands that any and all certificates representing the Securities and any and all securities issued in replacement thereof
or in exchange therefore shall bear the following legend or one substantially similar thereto, which Purchaser has read and understands:

 

“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”

 

    	 	3	 

     

    

 

(b)          In
addition, the certificates representing the Securities, and any and all securities issued in replacement thereof or in exchange
therefore, shall bear such legend as may be required by the securities laws of the jurisdiction in which Purchaser resides.

 

(c)          Because
of the restrictions imposed on resale, Purchaser understands that the Company shall have the right to note stop-transfer instructions
in its transfer records, and Purchaser has been informed of the Company’s intention to do so. Any sales, transfers, or any
other dispositions of the Securities by Purchaser, if any, will be in compliance with the Act and all applicable rules and regulations
promulgated thereunder.

 

3.04        Purpose.
Purchaser is purchasing the Securities for investment purposes for their own account and not with a view to distribution or resale,
nor with the intention of selling, transferring or otherwise disposing of all or any part thereof for any particular price, or
at any particular time, or upon the happening of any particular event or circumstances, except selling, transferring, or disposing
the Securities in full compliance with all applicable provisions of the Act, the rules and regulations promulgated by the Commission
thereunder, and applicable state securities laws; and that an investment in the Securities is not a liquid investment. Purchaser
understands that the Company is privately held, there is no trading market for its securities and that the Company does not file
any reports with the Commission.

 

3.05        Exemption
From Registration Required. Purchaser acknowledges that the Securities must be held indefinitely unless subsequently registered
under the Act or unless an exemption from such registration is available. Purchaser is aware of the provisions of Rule 144 promulgated
under the Act, which permits limited resale of securities purchased in a private placement subject to certain limitations and
to the satisfaction of certain conditions, including, among other things, the existence of a public market for the securities,
the availability of certain current public information about the Company, the lapse of at least six months after a party purchases
and pays for the securities, the sale being effected through a “broker’s transaction” or in transactions directly
with a “market maker” and the observance of certain volume restrictions.

 

3.06        Received
Information. Purchaser acknowledges that Purchaser has had the opportunity to ask questions of, and receive answers from,
the Company or any authorized person acting on its behalf concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could have been acquired by the Company without unreasonable
effort or expense) necessary to verify the accuracy of the information received by Purchaser. In connection therewith, Purchaser
acknowledges that Purchaser has had the opportunity to discuss the Company’s business, management and financial affairs
with the Company’s management or any authorized person acting on its behalf. Purchaser has received and reviewed all the
information, both written and oral, that Purchaser desires. Without limiting the generality of the foregoing, Purchaser has been
furnished with or has had the opportunity to acquire, and to review all information, both written and oral, that Purchaser desires
with respect to the Company’s business, management, financial affairs and prospects. In determining whether to make this
investment, Purchaser has relied solely on Purchaser’s own knowledge and understanding of the Company and its business based
upon Purchaser’s own due diligence investigations and the information furnished pursuant to this paragraph. No representations
or warranties have been made to Purchaser by the Company, or any officer, employee, agent, affiliate or subsidiary of the Company,
other than the representations of the Company contained herein, and in purchasing the Securities the Purchaser is not relying
upon any representations other than those contained in this Agreement. Purchaser understands that no person has been authorized
to give any information or to make any representations, whether oral or written, which were not contained in this Agreement and
Purchaser has not relied on any other representations or information.

 

    	 	4	 

     

    

 

3.07        Authorization;
Enforceability. Purchaser has all requisite legal and other power, authority and capacity to execute and deliver this
Agreement and to carry out and perform Purchaser’s obligations under the terms of this Agreement. The execution and delivery
of this Agreement and Purchaser’s purchase of the Securities has been duly authorized by all necessary action on behalf
of the Purchaser and constitute a legal, valid and binding agreement of Purchaser. This Agreement constitutes a valid and legally
binding obligation of Purchaser, enforceable in accordance with its terms, and subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and other general principals of equity, whether such enforcement is considered
in a proceeding in equity or law.

 

3.08        Suitability.
Purchaser has carefully considered and has discussed with Purchaser’s legal, tax, accounting and financial advisors, to
the extent Purchaser has deemed necessary, the suitability of this investment and the transactions contemplated by this Agreement
for the Purchaser’s particular federal, state, local and foreign tax and financial situation and has independently determined
that this investment and the transactions contemplated by this Agreement are a suitable investment for the Purchaser. Purchaser
has relied solely on such advisors and not on any statements or representations of the Company or any of its agents. Purchaser
understands that Purchaser (and not the Company) shall be responsible for Purchaser’s own tax liability that may arise as
a result of this investment or the transactions contemplated by this Agreement.

 

3.09        No
Untrue Statement. This Agreement and the Confidential Purchaser Questionnaire accompanying this Agreement do not contain
any untrue statement of a material fact or omit any material fact concerning Purchaser. Purchaser has a net worth and annual gross
income as stated in the Confidential Purchaser Questionnaire, and all of the answers and statements in the Confidential Purchaser
Questionnaire are true and correct.

 

3.10        Litigation.
There are no actions, suits, proceedings or investigations pending against Purchaser or Purchaser’s assets before any court
or governmental agency (nor, to Purchaser’s knowledge, is there any threat thereof) which would impair in any way Purchaser’s
ability to enter into and fully perform Purchaser’s commitments and obligations under this Agreement or the transactions
contemplated hereby.

 

3.11        No
Conflict. The execution, delivery and performance of and compliance with this Agreement, including but not limited to
the purchase of the Securities, will not result in any violation of, or conflict with, or constitute a default under, any of Purchaser’s
articles of incorporation or bylaws or other organizational documents, if applicable, or any agreement to which Purchaser is a
party or by which Purchaser is bound, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge against
any of the assets or properties of Purchaser or the Securities.

 

3.12        Risk.
Purchaser has adequate means of providing for current needs and personal contingencies and has no need for liquidity in an investment
in the Securities. Purchaser’s overall financial commitment to investments that are not readily marketable is not disproportionate
to Purchaser’s net worth, and Purchaser’s investment in the Securities will not cause an overall commitment to become
excessive. Purchaser has no reason to anticipate any change in Purchaser’s personal circumstances, financial or otherwise,
which may cause Purchaser to attempt to resell or transfer the Securities.

 

    	 	5	 

     

    

 

3.13        No
Endorsement. Purchaser recognizes that no federal, state or foreign agency has recommended or endorsed the purchase of
the Securities.

 

3.14        Sophistication.
Purchaser represents that: (i) Purchaser could be reasonably assumed to have the capacity to protect his/her/its own interests
in connection with this Agreement; or (ii) Purchaser has a pre-existing personal or business relationship with either the Company
or any affiliate thereof or of such duration and nature as would enable a reasonably prudent purchaser to be aware of the character,
business acumen and general business and financial circumstances of the Company or such affiliate and is otherwise personally
qualified to evaluate and assess the risks, nature and other aspects associated with the transactions contemplated by this Agreement.

 

3.15        Residence.
Purchaser further represents that the address set forth on the Signature Page hereto is Purchaser’s principal residence
(or, if Purchaser is a company, partnership or other entity, the address of its principal place of business).

 

3.16        No
Public Solicitation. Purchaser represents that Purchaser is not purchasing Securities as a result of or subsequent to
any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over
the Internet, television or radio or presented at any seminar or meeting or any public announcement by the Company.

 

3.17        Fees.
To the best of Purchaser’s knowledge, no finder, broker, agent, financial advisor or other intermediary, nor any purchaser
representative or any broker-dealer acting as a broker, is entitled to any compensation in connection with the transactions contemplated
by this Agreement.

 

3.18        Confidentiality.
Purchaser has refrained and shall refrain from trading in any securities of the Company or any other relevant company for so long
as such recipient has been in possession of the material non-public information about the Company or any Subsidiary.

 

3.19        Incumbency
of Authorized Signatory. If Purchaser is a corporation, partnership, limited liability company, trust or other entity,
the person executing this Agreement on Purchaser’s behalf hereby represents and warrants that the above representations
and warranties shall be deemed to have been made on behalf of such entity and the Purchaser has made such representations and
warranties after due inquiry to determine the truthfulness of such representations and warranties.

 

3.21        Status
of Purchaser; Authorization. If the Purchaser is a corporation, partnership, limited liability company, trust or other
entity, it is duly organized, validly existing and in good standing in its jurisdiction of incorporation or organization and has
all requisite power and authority to execute and deliver this Agreement and purchase the Securities, as provided herein.

 

    	 	6	 

     

    

 

3.22        Consents
and Approvals. Purchaser has obtained each consent, approval or authorization of, or filing, registration or qualification
with, any Governmental Entity or other Person or the vote, consent or approval in any manner of any holder of any equity or other
securities of Purchaser necessary to the consummation of the transactions contemplated by this Agreement and the other Loan Documents,
as a condition to the execution and delivery of this Agreement or any other Loan Document by Purchaser, the performance by Purchaser
of its obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby.

 

ARTICLE
IV

CLOSING

 

4.1          Closing
Date. The closing of the purchase and sale of the Note in principal amount of [     ] ($[     ])
and the Securities hereunder shall be held immediately following the execution and delivery of this Agreement (the “Closing
Date”).

 

4.2          Delivery
at Closing. At the Closing, the Company will deliver to the Purchaser (i) the Note, duly executed, substantially in the
form of Exhibit A hereto, (ii) Warrant duly completed and executed, substantially in the form of Exhibit B hereto,
and (iii) an executed copy of this Agreement; the Purchaser will deliver to the Company (x) the funds being loaned to the Company
pursuant to the Note by wire transfer to the bank designated by the Company, (y) the Note, duly executed, substantially in the
form of Exhibit A, and (z) an executed copy of this Agreement.

 

ARTICLE
V

TERMINATION

 

5.1          This
Agreement will remain in full force and effect until the later of (i) the maturity date of the Note as set forth therein, or (ii)
the indefeasible repayment in full of the Note.

 

ARTICLE
VI

MISCELLANEOUS

 

6.1          Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.

 

6.2
         Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance
with the laws of the State of New York, without giving effect to principles of conflicts of law.

 

6.3          Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together
shall constitute one instrument.

 

    	 	7	 

     

    

 

6.4          Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

6.5          Notices.
Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile or electronic mail, or forty-eight (48) hours after
being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party
to be notified at such party’s address or facsimile number as set forth below or as subsequently modified by written notice.

 

6.6          Fees
and Expenses. Each party shall bear its own expenses, including, but not limited to, legal fees, that it incurs with respect
to the Loan Documents and the transactions contemplated thereby.

 

6.7          Amendments
and Waivers. Any term of this Agreement may be amended or waived only with the prior written consent of the Company and
the Purchaser. Any amendment or waiver effected in accordance with this Section 6.7 shall be binding upon the Purchaser and each
transferee of the Securities, each future holder of all such Securities, and the Company.

 

6.8          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.

 

6.9         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.

 

[Signature
Pages Follow]

 

    	 	8	 

     

    

 

The
parties have executed this Convertible Note Purchase Agreement as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	LILIS
    ENERGY, INC.
	 	 	 
	 	By:	 
	 	Name:	Abraham
    Mirman
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Address:	 
	 	 	 
	 	PURCHASER:
	 	 	 
	 	[                                 ]
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	9	 

     

    

 

EXHIBIT
A 

 

FORM
OF CONVERTIBLE SUBORDINATED PROMISSORY NOTE 

 

[See Exhibit 4.1] 

  

    	 		 

     

    

 

EXHIBIT
B

 

FORM
OF WARRANT 

 

[See Exhibit 4.2]Exhibit
10.6

 

NOTE
EXCHANGE AGREEMENT

 

NOTE
EXCHANGE AGREEMENT, dated as of December [ ], 2015 (this “Agreement”), by and among Lilis Energy,
Inc. (the “Company”) and each of the parties listed on the signature pages hereto (each a “Noteholder”,
and collectively, the “Noteholders”). Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Original Note (as defined herein).

 

WHEREAS,
the Company has previously issued 12.0% Short-Term Notes due 2016 (together, the “Original Notes”) to certain
affiliates and accredited investors of the Company in an aggregate principal amount of $750,002;

 

WHEREAS,
each Noteholder beneficially owns the aggregate principal amount of Original Notes set forth opposite its name in Schedule
A attached hereto; and

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, each of the Noteholders will exchange its Original Notes
for the Company’s 12% Subordinated Convertible Notes in the form substantially attached as Exhibit A hereto (the
“Exchange Notes”), and the Company will issue such Exchange Notes at a rate, expressed in principal amount
of Exchange Notes, equal to $1.00 for $1.00 in exchange for the cancellation of the Original Notes, with all amounts due thereunder
being cancelled and deemed to have been paid in full, including any accrued but unpaid interest (the “Note Exchange”).

 

NOW,
THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein, the parties
hereto agree as follows:

 

1.  
Note Exchange. Contemporaneously with the execution and delivery of this Agreement, the parties shall effectuate the Note
Exchange in the following manner: (a) the Company shall issue and deliver to the Noteholders, an aggregate principal amount
of Exchange Notes equal to the aggregate principal amount of the Original Notes exchanged hereunder and (b) the Noteholders
severally (and not jointly) shall deliver to the Company all of their respective Original Notes. In addition, the Company shall
cancel the amount of accrued but unpaid interest owed to each Noteholder for the period from the execution of each Original Note
through the date hereof. The Exchange Notes issued pursuant to the Note Exchange shall accrue interest in accordance with the
provisions of the Exchange Notes.

 

2.  
Purchase Agreement. In connection with the Note Exchange, each Noteholder shall execute and deliver to the Company a purchase
agreement, in the form substantially attached as Exhibit B, hereto and the Company will deliver to the Noteholders warrants
to purchase shares of the Company’s common stock, par value $0.0001, in the form substantially attached as Exhibit C
hereto, in an amount specified therein.

 

3.
Representations and Warranties of the Company. The Company represents and warrants to the Noteholders effective as of the
date hereof as follows:

 

(a)
Due Organization. The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization.

 

(b)
Due Authorization; Binding Agreement; No Conflicts. The Company has full right, power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly authorized, executed
and delivered by the Company and (assuming due authorization, execution and delivery by the Noteholders) constitutes the valid
and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, and general equitable principles (whether considered in a proceeding in equity or at law). Neither this Agreement
nor the consummation of the Note Exchange will violate, conflict with or result in a breach of or default under (i) the certificate
of incorporation or bylaws of the Company, (ii) any agreement or instrument to which the Company is a party or by which the
Company or any of its assets are bound, or (iii) any laws, regulations or governmental or judicial decrees, injunctions or
orders applicable to the Company.

 

     

     

    

 

(c)
Validity of Exchange Notes. The Exchange Notes issued pursuant to this Agreement, when delivered in exchange for the Original
Notes in accordance with this Agreement, will be the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors’ rights generally, and general equitable principles (whether considered
in a proceeding in equity or at law)..

 

4.
Representations and Warranties of the Noteholders. Each Noteholder hereby, severally and not jointly, represents and warrants
to the Company as of the date hereof as follows:

 

(a)
Due Organization. If such Noteholder is a legal entity, it is duly organized and validly existing under the laws of the
jurisdiction of its organization.

 

(b)
Due Authorization; Binding Agreement. Such Noteholder has full right, power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been duly and validly authorized, executed and delivered
by such Noteholder and (assuming due authorization, execution and delivery by the Company) constitutes the valid and binding obligation
of such Noteholder enforceable against such Noteholder in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally,
and general equitable principles (whether considered in a proceeding in equity or at law).

 

(c)
Ownership of the Original Notes. Such Noteholder is, and at all times since execution of the Original Note has been, the
beneficial owner of its Original Notes, free and clear of any adverse claim, mortgage, pledge, lien, encumbrance, option, charge
or other security interest that would prevent such Noteholder’s compliance with its obligations hereunder. Such Noteholder
does not own, beneficially or of record, any Original Notes of the Company or securities convertible or exchangeable for Original
Notes of the Company other than as set forth in Schedule A hereto. Such Noteholder has the sole right and power to vote and dispose
of the Original Notes, and none of such Original Notes is subject to any voting trust or other agreement, arrangement or restriction
with respect to the voting or transfer of any of the Original Notes, except for this Agreement.

 

(d)
Investment Intent. The Exchange Notes to be acquired by such Noteholder pursuant to this Agreement shall be acquired for
such Noteholder’s own account and not with a view to, or intention of, distribution thereof in violation of the Securities
Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws, and such Exchange
Notes shall not be disposed of in contravention of the Securities Act or any applicable state securities laws.

 

(e)
Sophisticated Investor. Such Noteholder is a “qualified institutional buyer” as defined in Rule 144A under
the Securities Act or an “accredited investor” or “institutional accredited investor” as defined in Rule
501 under Regulation D of the Securities Act. Such Noteholder is able to bear the economic risk of its investment in the Exchange
Notes for an indefinite period of time and acknowledges that no public market exists for the Exchange Notes and that there is
no assurance that a public market will ever develop for the Exchange Notes. The Exchange Notes have not been registered under
the Securities Act and, therefore, cannot be sold unless subsequently registered under the Securities Act or an exemption from
such registration is available. Such Noteholder understands that the tax consequences of the Note Exchange are complex, and accordingly
such Noteholder represents and warrants that it has consulted with its own independent tax advisor concerning the Note Exchange
and is not relying on the Company or any of its respective affiliates or agents, including its counsel and accountants, for any
tax advice regarding the tax consequences of the Note Exchange or any other transactions contemplated by this Agreement.

 

(f)
Information. Such Noteholder has reviewed, or has had the opportunity to review, with the assistance of professional and
legal advisors of its choosing, sufficient information (including all documents filed or furnished to the Securities and Exchange
Commission by Lilis Energy, Inc.) and has had sufficient access to the Company necessary for such Noteholder to decide to exchange
its Original Notes for Exchange Notes in accordance with this Agreement.

 

4.
General Provisions.

 

(a)
Closing. The closing of the transactions contemplated by this Agreement shall occur simultaneously with the execution and
delivery of this Agreement.

 

    	 	2	 

     

    

 

(b)
Amendments, Etc. No amendment, modification, termination, or waiver of any provision of this Agreement, and no consent
to any departure by any of the Noteholders or the Company from any provision of this Agreement, shall be effective unless it shall
be in writing and signed and delivered by the party sought to be bound, and then it shall be effective only in the specific instance
and for the specific purpose for which it is given.

 

(c)
Disclosure. Nothing contained in this Agreement shall be construed to limit the Company or any Noteholder from making such
disclosures as may be required by law.

 

(d)
Notice. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier
(with confirmation) to the Company at 216 16th Street, Suite #1350, Denver, Colorado 80202, Attention: General Counsel,
and to each Noteholder at the address set forth in the Exhibit A (or at such other address for a party as shall be specified by
like notice).

 

(e)
Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions
of this Agreement in any other jurisdiction.

 

(f)
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

(g)
Entire Agreement. This Agreement embodies the entire agreement and understanding of the Noteholders and the Company with
respect to the subject matter hereof and thereof, and supersedes all prior agreements or understandings, with respect to the subject
matter of this Agreement.

 

(h)
Specific Performance; Enforcement. Each of the parties hereto recognizes and acknowledges that a breach by it of any covenants
or agreements contained in this Agreement will cause the other party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore, each of the parties hereto agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled at law or in equity. The parties agree that they shall be entitled
to enforce specifically the terms and provisions of this Agreement in addition to any other remedy to which they may entitled
at law or in equity.

 

(i)
Counterparts; Facsimile. This Agreement may be executed in counterparts, all of which shall be considered one and the same
agreement, and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties,
it being understood that all parties need not sign the same counterpart. This Agreement may be executed by facsimile signatures
of the parties hereto.

 

(j)
Expenses. All fees and expenses with respect to the negotiation of this Agreement and the consummation of the transactions
contemplated hereby shall be borne by the party incurring such fees and expenses.

 

[Signature
page follows]

  

    	 	3	 

     

    

 

IN
WITNESS WHEREOF, the Company and each Noteholder has caused this Agreement to be executed on its behalf as of the date first
written above.

 

	 	Lilis Energy, Inc.
	 	 	 
	 	By:	/s/ Kevin Nanke 
	 	Name:	Kevin Nanke
	 	Title:	Executive Vice President and Chief Financial Officer
	 	 	 
	 	Noteholders:
	 	 	 
	 	By:	 /s/ General Merrill McPeak 
	 	Name:	General Merrill McPeak
	 	 	 
	 	By:	 /s/ Nuno Brandolini 
	 	Name:	Nuno Brandolini
	 	 	 
	 	Siskey Capital, LLC.
	 	 	 
	 	By:	 /s/ Martin A. Sumichrast 
	 	Name:	Martin A. Sumichrast
	 	Title:	Manager
	 	 	 
	 	By:	 /s/ Abraham Mirman 
	 	Name:	Abraham Mirman

 

    	 	4	 

     

    

 

Schedule
A

 

	Noteholder	 	Aggregate Principal Amount of Securities Outstanding	 	 	Address for Notices	 
	General Merrill McPeak	 	$	250,002	 	 	 		 
	Nuno Brandolini 	 	$	150,000	 	 	 	 	 
	Siskey Capital, LLC	 	$	100,000	 	 	 	 	 
	Abraham Mirman	 	$	250,000	 	 	 	 	 

 

     

     

    

 

EXHIBIT
A

 

FORM
OF EXCHANGE NOTE

 

[See Exhibit 4.1] 

 

     

     

    

 

EXHIBIT
B 

 

FORM
OF PURCHASE AGREEMENT

 

[See
Exhibit 10.5]

 

     

     

    

 

EXHIBIT
C 

 

FORM
OF WARRANT 

 

[See
Exhibit 4.2]

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