Document:

bri_ex102.htm

Exhibit 10.2

 

VOTING AGREEMENT

 

This VOTING AGREEMENT (the “Agreement”) is made and  entered  into  as  of  this  29th day  of  December, 2015, by and among Lilis Energy, Inc., a Nevada corporation (“Lilis”), Lilis Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Lilis (“Merger Sub”), Brushy Resources, Inc., a Delaware corporation (“Brushy”), and Longview Marquis Fund, L.P., a Delaware limited partnership, LMIF Investments, LLC, a Delaware limited liability company, and SMF Investments LLC, a Delaware limited liability company (the “Stockholders”).

 

WITNESSETH:

 

WHEREAS, concurrently with the execution of this Agreement, Brushy, Lilis, and Merger Sub, have entered into an Agreement and Plan of Merger (as the same may be amended from time to time, the “Merger Agreement”), which provides, among other things, that Merger Sub will be merged with and into Brushy (the “Merger”), with Brushy surviving the Merger as a wholly owned direct subsidiary of Lilis;

 

WHEREAS, as of the date hereof, the Stockholders are the Beneficial Owner or record owner of the number Shares (as defined below) as set forth on the signature page hereto;

 

WHEREAS, it is a condition to the consummation of the Merger that Brushy obtain the affirmative vote of the holders of a majority of the outstanding Shares for (i) the adoption of the Merger Agreement and (ii) the approval of the Merger and the other transactions contemplated by the Merger Agreement; and

 

WHEREAS, as a condition to the willingness of Brushy, Lilis and Merger Sub to enter into the Merger Agreement, and in order to induce Brushy, Lilis and Merger Sub to enter into the Merger Agreement, the Stockholders have agreed to enter into this Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and in the Merger Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Capitalized Terms. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement.

 

1.2 Other Definitions. For purposes of this Agreement:

(a) “Beneficially Own”, “Beneficial Ownership” or “beneficial owner” with respect to any Shares means having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including pursuant to any agreement, arrangement or understanding, whether or not in writing. Without duplicative counting of the same securities by the same holder, securities Beneficially Owned by a Person shall include securities Beneficially Owned by all other Persons who are affiliates of such Person and who together with such Person would constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act, but excluding any Owned Shares that may be owned by employees of Stockholders or their affiliates in their capacity as directors of Brushy.

 

  

  

  

 

(b) “Shares” means shares of Brushy Common Stock.

(c) “Owned Shares” means, collectively, all (i) Shares and other voting securities of Brushy held of record or Beneficially Owned by the Stockholder as of the date hereof, (ii) Shares that become owned (whether Beneficially Owned or of record) by the Stockholders, whether upon the exercise of Brushy Options or Brushy Warrants, conversion of convertible securities or otherwise, after the execution of this Agreement, and (iii) other voting securities of Brushy (whether acquired heretofore or hereafter).

ARTICLE II

 

TRANSFER AND VOTING OF SHARES

 

2.1 No Transfer of Shares. The Stockholders shall not, directly or indirectly, (a) sell, pledge, encumber, assign, transfer or otherwise dispose of any or all of the Owned Shares or any interest in the Owned Shares, (b) deposit the Owned Shares or any interest in the Owned Shares into a voting trust or enter into a voting agreement or arrangement with respect to any of his, her or its Shares or grant any proxy or power of attorney with respect thereto or (c) enter into any contract, commitment, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, pledge, encumbrance, transfer or other disposition (whether by actual disposition or effective economic disposition due to hedging, cash settlement or otherwise) of any of the Owned Shares (any such action in clause (a), (b) or (c) above, a “transfer”). Notwithstanding anything to the contrary in the foregoing sentence, this Section 2.1 shall not prohibit a transfer of Owned Shares by the Stockholders if (a) any Stockholder is an individual, (i) to any member of such Stockholder’s immediate family or to a trust for the benefit of such Stockholder or any member of such Stockholder’s immediate family, or (ii) upon the death of the Stockholder to such Stockholder’s heirs, or (b) any Stockholder is a partnership or limited liability company, to one or more partners or members of such Stockholder or to an affiliate under common control with such Stockholder, as applicable; provided, however, that in each case a transfer shall be permitted only if as a condition precedent to the effectiveness of such transfer, the transferee agrees in a writing, satisfactory in form and substance to Brushy and Lilis, to be bound by all of the terms of this Agreement.

 

2.2 Vote in Favor of the Merger and Related Matters. The Stockholders, solely in the Stockholders’ capacities as stockholders of Brushy (and not, if applicable, in the Stockholders’ capacities as officers or directors of Brushy), irrevocably and unconditionally agree that, from and after the date hereof until the Expiration Date (as defined below), at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the stockholders of Brushy (a “Stockholder Meeting”), or in connection with any action by written consent of the stockholders of Brushy, the Stockholders shall:

(a) appear at each such meeting or otherwise cause all of the Owned Shares to be counted as present thereat for purposes of calculating a quorum;

 

(b) vote (or cause to be voted), in person or by proxy, or deliver a written consent (or cause a consent to be delivered) covering, all of the Owned Shares: (i) in favor of, and will otherwise support, the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated by the Merger Agreement, including, but not limited to, any stockholder vote required by Brushy Organizational Documents, applicable exchange rules, or the applicable laws of any state, (ii) in favor of any other matter reasonably relating to the consummation or facilitation of, or otherwise in furtherance of, the transactions contemplated by the Merger Agreement and (iii) except for the Merger and the Merger Agreement, against, and not otherwise support, any competing transaction or any other action, agreement or transaction submitted for approval of Brushy stockholders that is intended, or would reasonably be expected, to materially impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the Merger or any of the transactions contemplated by the Merger Agreement or this Agreement, including any extraordinary transaction, including any merger, consolidation, sale of assets, recapitalization or other business combination involving Brushy or any of its Subsidiaries or any other action or agreement that would reasonably be expected to result in a material breach of any covenant, representation or warranty or any other obligation or agreement of Brushy under the Merger Agreement or that would reasonably be expected to result in any of the conditions to Brushy’s obligations under the Merger Agreement not being fulfilled or satisfied.

 

  

  

  

 

The Stockholders shall retain, at all times, the right to vote their Owned Shares in their sole discretion and without any other limitation on those matters other than those set forth in this Section 2.2 that are at any time or from time to time presented for consideration to Brushy’s stockholders, generally.

 

2.3 Irrevocable Proxy.

 

(a) The Stockholders hereby revoke (or agree to cause to be revoked) any and all proxies that it has heretofore granted with respect to the Owned Shares that conflict with this Agreement. The Stockholders hereby irrevocably appoint each of Brushy and Lilis as attorney-in-fact and proxy, with full power of substitution, for and on behalf of the Stockholders, for and in the name, place and stead of the Stockholders, to (i) vote, express consent or dissent or issue instructions to the record holder of the Owned Shares to vote such Owned Shares in accordance with the provisions of Section 2.2 at any Stockholder Meeting, and (ii) grant or withhold, or issue instructions to the record holder of the Owned Shares to grant or withhold, in accordance with the provisions of Section 2.2, all written consents with respect to the Owned Shares.

 

(b) The foregoing proxy shall be deemed to be a proxy coupled with an interest, is irrevocable (and as such shall survive and not be affected by the death, incapacity, mental illness or insanity of any of the Stockholder) until the Expiration Date and shall not be terminated by operation of any Law or upon the occurrence of any other event other than the termination of this Agreement pursuant to Section 2.4. The Stockholders hereby affirm that the irrevocable proxy set forth in this Section 2.3 is given in connection with, and granted in consideration of and as an inducement to Brushy, Lilis and Merger Sub entering into the Merger Agreement and that such irrevocable proxy is given to secure the obligations of the Stockholders under Section 2.2. Each of Brushy and Lilis covenants and agrees with the Stockholders that such party will exercise the foregoing proxy consistent with the provisions of Section 2.2.

 

2.4 Termination. This Agreement and the obligations of the Stockholders pursuant to this Agreement shall terminate upon the earlier to occur of (a) the date the Merger Agreement shall have been validly terminated pursuant to its terms, (b) the date of any amendment, modification, change or waiver to any provision of the Merger Agreement that reduces the amount or changes the form of the Merger Consideration (subject to adjustment in accordance with the terms of the Merger Agreement), (c) the Effective Time, and (d) the date on which the Brushy Board, pursuant to Section 5.3(c) of the Merger Agreement, effects a Brushy Adverse Recommendation Change (such earlier date, the “Expiration Date”).

 

2.5 Stockholders Capacity. The parties acknowledge that this Agreement is entered into by the Stockholders in their capacity as owner of the Owned Shares and that nothing in this Agreement shall in any way restrict, limit or prohibit any affiliate or representative of the Stockholders from exercising their fiduciary duties in the capacity as a director of Brushy, if applicable.

 

    ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

OF THE STOCKHOLDER

 

The Stockholders represents and warrant to Lilis, Merger Sub and Brushy as follows (it being understood that, except where expressly stated to be given or made as of the date hereof only, the representations and warranties contained in this Article III shall be made as of the date hereof, as of the Effective Time and as of the date of each Meeting):

 

3.1 Organization. If the Stockholders are not individuals, they are duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization.

 

  

  

  

 

3.2 Authorization; Binding Agreement. If the Stockholders are not individuals, they have the requisite corporate, limited liability company, partnership or trust power and authority, and has taken all action necessary, to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. If the Stockholders are individuals, the Stockholders have full legal capacity, right and authority to execute and deliver this Agreement and to perform the Stockholders’ obligations hereunder. This Agreement has been duly executed and delivered by the Stockholders and constitutes a valid and binding obligation of the Stockholders and, assuming the due authorization, execution and delivery hereof by Lilis, Merger Sub and Brushy, is enforceable against the Stockholders in accordance with its terms. If the Stockholders are married, and any of the Owned Shares constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly executed and delivered by the Stockholders’ spouses solely with respect to such Owned Shares and, assuming the due authorization, execution and delivery hereof by Lilis, Merger Sub and Brushy, is enforceable against the Stockholders’ spouses in accordance with its terms. If this Agreement is being executed in a representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into and perform this Agreement.

 

3.3 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement to Lilis, Merger Sub and Brushy by the Stockholders does not, and the performance of this Agreement will not, (i) conflict with or violate any Law applicable to the Stockholders or by which the Stockholders are bound or affected, (ii) violate or conflict with the organizational documents of the Stockholders, if applicable, or (iii) except where it would not interfere with the Stockholders’ ability to perform his, her or its obligations hereunder, result in or constitute (with or without notice or lapse of time or both) any breach of or default under, or give to another party any right of termination, material amendment, acceleration or cancellation of, or result in the creation of any lien or encumbrance or restriction on any of the property or assets of the Stockholders pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Stockholders are a party or by which the Stockholdesr or any of the Stockholders’ properties or assets is bound or affected. There is no beneficiary or holder of a voting trust certificate or other interest of any trust of which the Stockholders are a trustee whose consent is required for the execution and delivery of this Agreement or the consummation by the Stockholder of the transactions contemplated by this Agreement.

 

(b) The execution and delivery of this Agreement by the Stockholders does not, and the performance of this Agreement will not, require any consent, approval, authorization or permit of, or filing with or notification to, any third party or any governmental or regulatory authority, domestic or foreign, except where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not interfere with the Stockholders’ ability to perform their obligations hereunder.

3.4 Litigation. To the knowledge of the Stockholders or any of their affiliates, as of the date of this Agreement, there is no there is no action, suit, proceeding, investigation, audit or claim underway, pending or threatened before any Governmental Entities against the Stockholders or any of their affiliates or any of their respective properties or assets or any of their respective officers or directors, in the case of a corporate entity (in their capacities as such), or any of their respective partners (in the case of a partnership), or any of their respective members (in the case of a limited liability company), that would materially interfere with the Stockholders’ ability to perform its obligations hereunder. To the knowledge of the Stockholders or any of their affiliates, as of the date of this Agreement, there is no judgment, decree or order against the Stockholders or any of their affiliates, or any of their respective directors or officers (in their capacities as such), in the case of a corporate entity, or any of their respective partners (in the case of a partnership), or any of their respective members (in the case of a limited liability company), that would prevent, enjoin, materially alter or materially delay any of the transactions contemplated by this Agreement, or that would otherwise materially interfere with the Stockholders’ ability to perform its obligations hereunder.

 

3.5 Title to Shares. As of the date hereof, the Stockholders (together with the Stockholders’ spouse if the Stockholders are married and the Owned Shares constitute community property under applicable Law) is, and at all times prior to the Expiration Date will be, the record and beneficial owners of the Owned Shares free and clear of any Liens and with no restrictions on the Stockholders’ rights of voting or disposition pertaining thereto, except for any applicable restrictions on transfer under the Securities Act. Except to the extent of any Owned Shares acquired after the date hereof (which shall become Owned Shares upon that acquisition), the Owned Shares set forth on opposite the name of the Stockholders on the signature page hereto are the only Shares beneficially owned by the Stockholders on the date hereof. Other than as set forth on the signature page hereto, as of the date hereof, the Stockholders do not beneficially own any (i) shares of capital stock or other voting securities of or ownership interests in Brushy, (ii) securities of Brushy convertible into or exchangeable for shares of capital stock or other voting securities of or ownership interests in Brushy, or (iii) warrants, calls, options or other rights to acquire from Brushy any capital stock or other voting securities or ownership interests in or any securities convertible into or exchangeable or exercisable for capital stock or other voting securities or ownership interests in Brushy.

 

  

  

  

 

3.6 Proxy. Except for this Agreement, none of the Owned Shares are subject to any voting agreement, voting trust or other agreement or arrangement, including any proxy, consent or power of attorney, with respect to the voting of the Owned Shares on the date hereof. The Stockholders further represent that any proxies heretofore given in respect of the Owned Shares, if any, are revocable.

3.7 Reliance. The Stockholders understand and acknowledge that Lilis, Merger Sub and Brushy are entering into the Merger Agreement in reliance upon the Stockholder’s execution, delivery and performance of this Agreement.

3.8 Finder’s Fees. No agent, broker, investment banker, finder or other intermediary is or will be entitled to any fee or commission or reimbursement of expenses from Lilis, Merger Sub or Brushy or any of their respective affiliates in respect of this Agreement based upon any arrangement or agreement made by or on behalf of the Stockholders.

3.9 Acknowledgement of the Merger Agreement. Each of the Stockholders hereby acknowledges and agrees that the Stockholders have received a copy of the Merger Agreement presented to such Stockholder in substantially final form and has reviewed and understood the terms thereof.

 

ARTICLE IV

 

COVENANTS OF THE STOCKHOLDER

 

4.1 Further Assurances. From time to time, at the request of either of Brushy or Lilis and without additional consideration, the Stockholders shall execute and deliver, or cause to be executed and delivered, such additional transfers, assignments, endorsements, proxies, consents and other instruments, and shall take such further actions, as any of Brushy or Lilis may reasonably request for the purpose of carrying out and furthering the intent of this Agreement.

 

4.2 Public Announcements. The Stockholders shall not issue any press release or otherwise make any public statement with respect to the Merger Agreement, this Agreement, the Merger or any other transactions contemplated by the Merger Agreement without the prior written consent of each of Brushy and Lilis, except as may be required by applicable Law or to the Stockholders’ partners, members, investors or prospective investors who are bound by a customary confidentiality agreement.

4.3 No Solicitation of Acquisition Proposals. Subject to Section 2.2, neither the Stockholders nor any of their officers, directors, managers, members or partners shall, and the Stockholders shall direct and cause their employees, agents, consultants and representatives not to, directly or indirectly, (a) solicit, initiate or knowingly encourage, knowingly cooperate with any person regarding, or knowingly facilitate (including by way of furnishing material, non-public information) any Acquisition Proposal, or (b) participate in any discussions or negotiations regarding any Acquisition Proposal (but the foregoing will not prohibit the Stockholders or their Representatives from making a person aware or otherwise informing such person of the provisions of this Section 4.3).

 

  

  

  

 

4.4 Additional Purchases. The Stockholders agree that any voluntary acquisition of the right to vote or share in the voting of any Shares, Brushy Options or Brushy Warrants other than the Owned Shares shall be subject to the terms of this Agreement to the same extent as if such Shares, Brushy Options or Brushy Warrants constituted the Owned Shares.

 

4.5 Certain Adjustments. In the event of a stock split, stock dividend or distribution, or any change in the shares of Shares by reason of a stock split, reverse stock split, recapitalization, combination, reclassification, readjustment, exchange of shares or the like, the term “Owned Shares” shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged.

4.6 Waiver of Appraisal Rights and Actions.  The Stockholders hereby (a) irrevocably waive and agree not to exercise any and all rights the Stockholders may have as to appraisal, dissent or any similar or related matter with respect to any of the Owned Shares that may arise with respect to the Merger or any of the other transactions contemplated thereby and (b) agrees (i) not to commence or participate in, and (ii) to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Lilis, Merger Sub, Brushy or any of their respective affiliates relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger, including any such claim (A) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement, or (B) alleging a breach of any fiduciary duty of Brushy Board in connection with the Merger Agreement or the other transactions contemplated thereby.

ARTICLE V

 

 

GENERAL PROVISIONS

 

5.1 Entire Agreement; Amendments. This Agreement, the Merger Agreement and the other agreements referred to therein constitute the entire agreement of the parties hereto and supersede all prior agreements and undertakings, both written and oral, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended or modified except in an instrument in writing signed by, or on behalf of, the parties hereto.

5.2 No Survival of Representations and Warranties. The representations and warranties made by the Stockholders in this Agreement shall not survive any termination of the Merger Agreement or this Agreement.

5.3 Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned by any party to this Agreement (by operation of Law or otherwise) without the prior written consent of the other parties to this Agreement.

5.4 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner.

5.5 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement is not performed in accordance with its specific terms or is otherwise breached. The Stockholders agree that, in the event of any breach or threatened breach by any Stockholder of any covenant or obligation contained in this Agreement, either of Brushy or Lilis shall be entitled to seek and obtain (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation and (b) an injunction restraining such breach or threatened breach. The Stockholders further agree that none of Lilis, Merger Sub and Brushy or any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 5.5, and the Stockholders irrevocably waive any right he, she or it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

  

  

  

 

5.6 Governing Law. This Agreement, and all claims or causes of action (whether at Law, in contract or in tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

5.7 No Waiver. No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. None of the parties hereto shall be deemed to have waived any claim available to such party arising out of this Agreement, or any right, power or privilege hereunder, unless the waiver is expressly set forth in writing duly executed and delivered on behalf of such waiving party. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.

5.8 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) the transmitter’s confirmation of a receipt of a facsimile or e-mail transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand, (c) the expiration of five Business Days after the day when mailed in the United States by certified or registered mail, postage prepaid, return receipt requested or (d) delivery in Person, addressed at the following addresses (or at such other address for a party as shall be specified by like notice):

if to Brushy, to:

 

Brushy Resources, Inc.

300 E. Sonterra Blvd., Suite 1220

San Antonio, Texas 78258

Telephone: (210) 999-5400

Attention: Ed Shaw

E-mail: _________________________

 

with a copy to (which copy shall not constitute notice):

 

Whitaker Chalk Swindle & Schwartz PLLC

301 Commerce Street, Suite 3500

Fort Worth, Texas 76102

Telephone: (817) 878-0547

Attention: John R. Fahy

E-mail: jfahy@whitakerchalk.com

 

if to Lilis or Merger Sub, to:

 

Lilis Energy, Inc.

216 16th Street, Suite 1350

Denver, Colorado 80202

Telephone: (303) 893-9000

Attention: Ariella Fuchs

E-mail: _________________________

 

with a copy to (which copy shall not constitute notice):

 

K&L Gates LLP

1 Park Plaza, Twelfth Floor

Irvine, California 92616

Telephone: (949) 623-3519

Attention: Michael A. Hedge

E-mail: _________________________

 

  

  

  

 

If to the Stockholders, to the address set forth on the signature page hereto.

 

Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this Section 5.8; provided, however, that such notification shall only be effective on the date specified in such notice or five Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

 

5.9 Headings. The heading references herein are for convenience of reference only and do not form part of this Agreement, and no construction or reference shall be derived therefrom.

 

5.10 Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

5.11 Amendment. This Agreement may not be amended, modified or supplemented except by an instrument in writing signed by each of the parties hereto.

 

[Remainder of page left intentionally blank]

 

  

  

  

 

IN WITNESS WHEREOF, each of Lilis, Merger Sub, Brushy and each Stockholder has executed or has caused this Agreement to be executed by their respective duly authorized officers, him or her, as applicable, as of the date first written above.

 

	 	LILIS ENERGY, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Abraham Mirman	 
	 	 	

Name: Abraham Mirman

	 
	 	 	

Title: Chief Executive Officer

	 
	 	 	 	 
	 	

LILIS MERGER SUB, INC.

	 
	 	 	 	 
	 	By:	/s/ Ariella Fuchs	 
	 	 	

Name:Ariella Fuchs

	 
	 	 	

Title: President

	 
	 	 	 	 
	 	

BRUSHY RESOURCES, INC.

	 
	 	 	 	 
	 	By:	/s/ Michael J. Pawelek	 
	 	 	Name: Michael J. Pawelek	 
	 	 	Title: Chief Executive Officer	 

 

 

 

 

IN WITNESS WHEREOF, each of Lilis, Merger Sub, Brushy and each Stockholder has executed or has caused this Agreement to be executed by their respective duly authorized officers, him or her, as applicable, as of the date first written above.

 

STOCKHOLDERS

 

	
Number of Shares: 750,514

	
LMIF INVESTMENTS LLC

By: LONGVIEW MARQUIS INTERNATIONAL FUND, LTD., its sole member

By: VIKING ASSET MANAGEMENT LLC, its General Partner

 

By: /s/ Peter Benz      

      Peter Benz

      Managing Member

 

Address: 66 Bovet Road, Suite 320

               San Mateo CA  94402

 

	
Number of Shares: 876,957

	
LONGVIEW MARQUIS FUND LP

By: VIKING ASSET MANAGEMENT LLC, its General Partner

 

By: /s/ Peter Benz

      Peter Benz

      Managing Member

 

Address: 66 Bovet Road, Suite 320

               San Mateo CA  94402

 

	
Number of Shares: 547,307

	
SMF INVESTMENTS, LLC

By: SUMMERVIEW MARQUIS FUND, L.P., its Sole Member

By: VIKING ASSET MANAGEMENT LLC, its General Partner

 

 

By: /s/ Peter Benz

      Peter Benz

      Managing Member

 

Address: 66 Bovet Road, Suite 320

               San Mateo CA  94402EXCUTIVE EMPLOYMENT AGREEMENT

The Executive Employment Agreement (the “Agreement”)
is between HD View 360 INC., a Florida Corporation (the “Company”) and Dennis Mancino (the “Employee”)
effective as of December 28, 2015 (the “Effective Date”).

RECITALS:

WHEREAS, the Company desires that the Employee become
the Chief Executive Officer & President of the Company.

WHEREAS, the Employee desires to accept such role
under the terms hereof.

NOW, THEREFORE, in consideration of the promises
and mutual agreements herein set forth, the parties hereby agree as follows:

1. Term of Employment. The period of employment of
Employee by the Company under the Agreement (the Employment Period) shall be deemed to have commenced on the Effective Date and
shall terminate two (2) years thereafter.

2. Duties. During his employment by the Company,
the Employee shall perform such duties as are customary and typical by an officer of a publicly traded company, and shall discharge
such duties in a professional and diligent manner at all times, to the best of his abilities. Employee’s employment shall
also be subject to the policies maintained and established by the Company, if any, as the same may be amended from time to time.
In keeping with these duties, Employee shall make full disclosure to the Board of Directors of all business opportunities pertaining
to the business of the Company or its Affiliates and should not appropriate for Employee’s own benefit business opportunities
that fall within the scope of the businesses conducted by the Company and its Affiliates.

3. Compensation. The Company shall pay to Employee
a base salary of $7,000 per month, full or part, plus applicable bonuses as are awarded by the Board of Directors from time to
time based on performance, which may either be paid in stock or cash at the discretion of the Board. The employee is also entitled
to 30 days paid leave per annum.   

4. During the term, Employee shall serve in the capacity
of the Company's Chief Executive Officer and President.   Employee shall also serve as a director of the Company but
shall not be compensated for his services as a director.

5. Reimbursement for Expenses. The Company shall
reimburse the Employee within 30 days of the submission of appropriate documentation, and in no event later than the last day of
the calendar year following the year in which an expense was incurred, for all reasonable and approved travel and entertainment
expenses and other disbursements incurred by him for or on behalf of the Company in the course and scope of his employment under
the Agreement.

6. Termination of Agreement.

(a) Death. The Agreement shall automatically terminate
upon the death of Employee

(b) Disability. If, as a result of Employee’s
incapacity due to physical or mental illness, Employee shall have been substantially unable, either with or without reasonable
accommodation, to perform his duties hereunder for an entire period of six (6) consecutive months, and within thirty (30) days
after written Notice of Termination is given after such six (6) month period, Employee shall not have returned to the substantial
performance of his duties on a full-time basis, the Company shall have the right to terminate Employee’s employment hereunder
for Disability, and such termination in and of itself shall not be, nor shall it be deemed to be, a breach of the Agreement. Any
dispute between the Employee and the Company regarding whether Employee has a Disability shall be determined in writing by a qualified
independent physician mutually acceptable to the Employee and the Company. If the Employee and the Company cannot agree as to a
qualified independent physician, each shall appoint a physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the Company and Employee shall be final and conclusive
for all purposes of the Agreement. Employee acknowledges and agrees that a request by the Company for such a determination shall
not be considered as evidence that the Company regarded the Employee as having a Disability.

    -1- 

    

    

 

(c) Termination By Company For Cause. The Company
may terminate the Agreement upon written notice to Employee at any time for “Cause” in accordance with the procedures
provided below;

(d) For purposes of the Agreement, “Cause”
shall mean:

(i) the material breach of any provision of the Agreement
by Employee which has not been cured within five business (5) days after the Company provides notice of the breach to Employee;
provided, however, if the act or omission that is the subject of such notice is substantially similar to an act or omission with
respect to which Employee has previously received notice and an opportunity to cure, then no additional notice is required and
the Agreement may be terminated immediately upon the Company’s election and written notice to Employee);

(ii) the entry of a plea of guilty or judgment entered
after trial finding Employee guilty of a crime punishable by imprisonment in excess of one year involving moral turpitude (meaning
a crime that includes the commission of an act of gross dishonesty or bad morals);

(iii) willfully engaging by Employee in conduct that
the Employee knows or reasonably should know is detrimental to the reputation, character or standing or otherwise injurious to
the Company or any of its shareholders, direct or indirect subsidiaries and Affiliates, monetarily or otherwise;

(iv) without limiting the generality of Section 6(d)(i),
the breach or threatened breach of any of the provisions of Sections 8, 9 or 10; or

(v) a ruling in any state or federal court or by
an arbitration panel that the Employee has breached the provisions of a non-compete or non-disclosure agreement, or any similar
agreement or understanding which would in any way limit, as determined by the Board of Directors of the Company, the Employee’s
ability to perform under the Agreement now or in the future.

(e) Termination by Company Without Cause. The Company,
by a vote of a majority of the Board of Directors, may terminate the Agreement at any time, and for any reason, by providing at
least 180 days written notice to Employee.

(f) Termination by Employee with Good Reason. Employee
may terminate his employment with good reason any time after Employee has actual knowledge of the occurrence, without the written
consent of Employee, of one of the following events (each event being referred to herein as “Good Reason”):

(i) Any change in the duties or responsibilities
(including reporting responsibilities) of Employee that is inconsistent in any adverse respect with Employee’s position(s),
duties, responsibilities or status with the Company immediately prior to such change (including any diminution of such duties or
responsibilities) or (B) an adverse change in Employee’s titles or offices (including, membership on the Board of Directors)
with the Company;

 

(ii) A reduction in Employee’s Base Salary or Bonus
opportunity;

(iii) The relocation of the Company’s principal
executive offices more than 50 miles from their present location without satisfactory consultation and mutual consent;

(iv) The failure of the Company to continue in effect
any material employee benefit plan, compensation plan, welfare benefit plan or fringe benefit plan in which Employee is participating
immediately prior to the date of the Agreement or the taking of any action by the Company which would adversely affect Employee’s
participation in or reduce Employee’s benefits under any such plan, unless Employee is permitted to participate in other
plans providing Employee with substantially equivalent benefits;

(v) Any refusal by the Company to continue to permit
Employee to engage in activities not directly related to the business of the Company which Employee was permitted to engage in
prior to the date of the Agreement;

(vi) The Company’s failure to provide in all
material respects the indemnification set forth in the Company’s Articles of Incorporation, By-Laws, or any other written
agreement between Employee and Company;

 

    -2- 

    

    

(vii) Any other breach of a material provision of
the Agreement by the Company.

For purposes of clauses (iii) through (vi) and
(vii) above, an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within
ten (10) days after receipt of notice thereof given by Employee shall not constitute Good Reason. Employee’s right to
terminate employment with Good Reason shall not be affected by Employee’s incapacity due to mental or physical illness and
Employee’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition
constituting cause.

7. Effect of Termination. Upon the termination of
the Agreement, no rights of Employee which shall have accrued prior to the date of such termination, including the right to receive
any bonus Fully-Earned through the date of such termination, shall be affected in any way.

(a) Upon Death of Employee. During the Term, if Employee’s
employment is terminated due to his death, Employee’s estate shall be entitled to receive the Base

 

Salary set forth in Section 3 accrued through the date
of death and any bonus Fully-Earned (as herein defined) through the date of such termination; provided, however, Employee’s
estate shall not be entitled to any other benefits (except as provided by law or separate agreement). “Fully-Earned”
shall mean that for purposes of determining whether the Employee shall be entitled to a bonus, that such Employee shall be treated
as if he had been employed through the last date of the regular period for determining whether or not a bonus is payable in the
standard manner that all such employees are evaluated even though Employee is no longer employed by the Company, and him eligibility
for an incentive bonus, if any, shall be determined accordingly. Further, a surviving spouse of Employee shall be eligible for
continuation of family benefits pursuant to Section 3(c) subject to compliance with Plan provisions at the full premium rate
(Company plus employee portion) for a one-year period after the date of termination.

(b) For Disability; By Company Without Cause; By
Employee with Good Reason.

If the Agreement is terminated under Section 6
(b), (e) or (f):

(i) Employee shall be entitled to receive his Base
Salary set forth in Section 3 accrued through the date of such termination and any bonus Fully-Earned through the date of
such termination, and shall receive a severance equal to 12 month’s salary, paid out in 12 equal monthly installments; and

(ii) Except as provided for in the Section 7(b),
Employee shall not have any rights, which have not previously accrued upon termination of the Agreement.

(c) By Company with Cause. In the event of termination
of Employee’s employment Section 6(c) Employee shall be entitled to receive the Base Salary and benefits set forth in
Section 3 accrued through the date of termination, and he shall not be entitled to any other benefits (except as required
by law).

8. Confidential Information.

(a) The Company shall disclose to Employee, or place
Employee in a position to have access to or develop, trade secrets or confidential information of Company or its Affiliates; and/or
shall entrust Employee with business opportunities of Company or its Subsidiaries; and/or shall place Employee in a position to
develop business good will on behalf of Company or its Subsidiaries.

(b) The Employee acknowledges that in his employment
hereunder he occupies a position of trust and confidence and agrees that he will treat as confidential and will not, without prior
written authorization from the Company, directly or indirectly, disclose or make known to any person or use for her own benefit
or gain, the methods, process or manner of accomplishing the business undertaken by the Company or its Subsidiaries, or any non-public
information, plans, formulas, products, trade secrets, marketing or merchandising strategies, or confidential material or information
and instructions, technical or otherwise, issued or published for the sole use of the company, or information which is disclosed
to the Employee or in any way acquired by him during the term of the Agreement, or any information concerning the present or future
business, processes, or methods of operation of the Company or its

Subsidiaries, or concerning improvement, inventions
or know how relating to the same or any part thereof, it being the intent of the Company, with which intent the Employee hereby
agrees, to restrict him from disseminating or

    -3- 

    

    

using for his own benefit any information belonging
directly or indirectly to the Company which is unpublished and not readily available to the general public.

9. Successors and Assigns. The Agreement is personal
in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer the Agreement or any
rights or obligations hereunder, provided, however, that the provisions hereof shall inure to the benefit of, and be binding upon,
each successor of the Company, whether by merger, consolidation, acquisition or otherwise, unless otherwise agreed to by the Employee
and the Company.

10. Notices. Any notice required or permitted to
be given to the Employee pursuant to the Agreement shall be sufficiently given if sent to the Employee by registered or certified
mail addressed to the Employee at such address as he shall designate by notice to the Company, and any notice required or permitted
to be given to the Company pursuant to the Agreement shall be sufficiently given if sent to the Company by registered or certified
mail addressed to it at its registered agent address as reflected in the records of the Florida Secretary of State.

11. Invalid Provisions. The invalidity or unenforceability
of a particular provision of the Agreement shall not affect the enforceability of any other provisions hereof and the Agreement
shall be construed in all respects as if such invalid or unenforceable provision were omitted.

12. Amendments to The Agreement. The Agreement may
only be amended in writing by an agreement executed by both parties hereto.

13. Entire Agreement. The Agreement contains the
entire agreement of the parties hereto and supersedes any and all prior agreements, oral or written, and negotiations between said
parties regarding the subject matter contained herein.

14. Applicable Law and Venue. The Agreement is entered
into under, and shall be governed for all purposes, by the laws of the State of Florida, with venue of any lawsuit between the
parties being in Broward County, Florida.

15. No Waiver. No failure by either party hereto
at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of the
Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.

16. Severability. If a Court of competent jurisdiction
determines that any provision of the Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision
shall not affect the validity or unenforceability of any other provision of the Agreement, and all other provisions shall remain
in full force and effect.

17. Counterparts. The Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one in the
same agreement.

 

18. Withholding of Taxes and Other Employee Deductions. The
Company may withhold from any benefits and payments made pursuant to the Agreement all federal, state, city and other taxes as
may be required pursuant to any law or governmental regulation or ruling.

19. Indemnification. The Company shall indemnify
Employee from any claims, demands or liabilities of any kind or nature arising out of his employment with the Company, that are
not the result of his own actions, or actions within his control.

20. Gender Correction and Neutrality. This Agreement
may contain one or more references to he or she, or his or her. It is stipulated and agreed that Employee is a male, and all such
references, to the extent they are inconsistent with this, shall be deemed to be corrected

In witness whereof, the parties hereto have executed
the Agreement as of the day and year above written.

 

	HD VIEW 360 INC	 	Employee
	 	 	 
	/s/   Dennis Mancino                   	 	/s/   Dennis Mancino                                                            .
	By: Dennis Mancino, President	 	By: Dennis Mancino

 

    -4-

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