The Company and each Holder hereby agree that (i) contemporaneous with the closing of the merger between Lilis Merger Sub, Inc., a wholly-owned subsidiary of the Company, and Brushy Resources, Inc. (the “ Conversion Date ”), Holder will be deemed to have converted such Holder’s Notes without any further action by the Holder, into shares of Common Stock (the “ Conversion ”) as determined by dividing the aggregate principal amount of such Holder’s Notes by $0.11 (the “ Conversion Stock ”) and (ii) that in consideration of the forgoing and on the Conversion Date, any right to payments owed as accrued and unpaid interest (whether in cash or kind) on the Notes is hereby waived and forfeited and no interest on the Notes will be due and payable. Except as amended hereby, all of the terms and conditions of the Note shall remain in full force and effect.