Item 1.01 Entry into a Material Definitive Agreement.



As previously disclosed, Lilis Energy, Inc. (the "Company") is a party to the
Second Amended and Restated Senior Secured Revolving Credit Agreement, dated
October 10, 2018 (as amended, the "Credit Agreement"), among the Company, as
borrower, certain subsidiaries of the Company, as guarantors (the "Guarantors"),
the lenders party thereto, and BMO Harris Bank N.A., as administrative agent
(the "Administrative Agent").
Also as previously disclosed, the January 17, 2020 redetermination of the
borrowing base under the Credit Agreement resulted in a borrowing base
deficiency (the "Borrowing Base Deficiency") under the Credit Agreement in the
amount of $25 million, reflecting the amount by which the principal amount of
borrowings outstanding under the Credit Agreement exceeded the borrowing base as
so redetermined. The Credit Agreement required the Company to repay the amount
of the Borrowing Base Deficiency on the schedule provided for in the Credit
Agreement. The Company previously repaid $17.25 million of the Borrowing Base
Deficiency, and the final payment of the remaining $7.75 million balance of
Borrowing Base Deficiency was required to be made by the Company on June 5,
2020, which the Company has not paid.
On June 5, 2020, the Company, the Guarantors, the Administrative Agent and
certain lenders constituting the "Majority Lenders" (as defined in the Credit
Agreement) entered into a Limited Forbearance Agreement to the Credit Agreement
(the "Forbearance Agreement").
Pursuant to the Forbearance Agreement, the Administrative Agent and the Majority
Lenders agreed to refrain from exercising certain of their rights and remedies
under the Credit Agreement and related documents arising solely as a result of
the occurrence or continuance of certain specified defaults and events of
default under the Credit Agreement (the "Specified Defaults") during the
Forbearance Period (as defined below). The Specified Defaults include the
Company's failure to properly deliver certain financial statements when due,
certain defaults related to the status of trade payables and related liens and
failure to maintain the leverage ratio and asset coverage ratio required by the
Credit Agreement as of the fiscal quarter ended March 31, 2020.
The "Forbearance Period" is the period commencing on the date of the Forbearance
Agreement and continuing until 6:00 p.m., Central time, on June 26, 2020, as
such date may be extended by the Administrative Agent and the majority lenders
under the Credit Agreement, or the earlier date upon which there occurs a
default or event of default under the Credit Agreement, other than the Specified
Defaults, or the Forbearance Agreement or certain other events specified in the
Forbearance Agreement.
The Specified Defaults also include the non-payment by the Company of the final
remaining $7.75 million balance of Borrowing Base Deficiency on June 5, 2020.
The Forbearance Agreement, however, permits the lenders under the Credit
Agreement in their capacity as counterparties to the Company's commodity swap
agreements to unwind and liquidate such swap arrangements during the Forbearance
Period and to apply any net proceeds to pay down the outstanding obligations
under the Credit Agreement. The Company expects that certain of the Company's
swap positions of such lenders will be liquidated in the next few weeks for net
proceeds of at least $10.0 million, as estimated under recent market prices,
which will be applied to reduce the outstanding obligations of the Company under
the Credit Agreement. Any such reduction of outstanding obligations will not,
however, cure Specified Defaults.
If the Company is unable to cure, or obtain a waiver of, the Specified Defaults
before termination of the Forbearance Period and such period is not extended,
the bank lenders under the Credit Agreement will be permitted to exercise all of
their rights and remedies under the Credit Agreement.
The Forbearance Agreement also deferred the scheduled spring redetermination of
the borrowing base under the Credit Agreement from on or about June 5, 2020 to
on or about June 26, 2020 (as such date may be extended by the Administrative
Agent and the majority lenders under the Credit Agreement).
The foregoing description of the terms of the Forbearance Agreement is not
complete and is qualified in its entirety by reference to the full copy of the
Forbearance Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 8.01  Other Events.
As disclosed under Item 1.01 of this Current Report on Form 8-K, on June 5, 2020
we entered into a Forbearance Agreement with the Administrative Agent and the
Majority Lenders under the Credit Agreement. Pursuant to the Forbearance
Agreement, subject to certain terms and conditions, the Administrative Agent and
the Majority Lenders have agreed to refrain from exercising certain of their
rights or remedies under the Credit Agreement arising solely as a result of the
occurrence or continuance of the Specified Defaults during the Forbearance
Period. The Forbearance Period will expire on June 26, 2020, absent further
extension by the Administrative Agent and the Majority Lenders at their sole
discretion, and may expire on an earlier date upon which there occurs a default
or event of default other than the Specified Defaults under the Credit
Agreement. No assurances can be made that we will be able to cure, or obtain a
waiver of, the Specified Defaults before the expiration of the Forbearance
Period, if such period is not extended. There are also no assurances that no
other default or event of default will occur under the Credit Agreement and
trigger an earlier termination of the Forbearance Period.
The Specified Defaults also include the non-payment by the Company of the final
remaining $7.75 million balance of Borrowing Base Deficiency on June 5, 2020.
The Forbearance Agreement, however, permits the lenders under the Credit
Agreement in their capacity as counterparties to the Company's commodity swap
agreements to unwind and liquidate such swap arrangements during the Forbearance
Period. The Company expects that certain of the Company's swap positions of such
lenders will be liquidated in the next few weeks for net proceeds of at least
$10.0 million, as estimated under recent market prices, which will be applied to
reduce the outstanding obligations of the Company under the Credit Agreement.
Any such reduction of outstanding obligations will not, however, cure Specified
Defaults.
The Company intends to continue our discussions regarding the Company's needs
with representatives of the private funds managed by Värde Partners, Inc. and
its affiliates (collectively, "Värde"), which own approximately $25.3 million
principal amount of our outstanding debt under the Credit Agreement, all of our
outstanding preferred stock, and a significant block of our outstanding common
stock. There is, however, no assurance that such discussions will result in any
offer, proposal or agreement or that the Majority Lenders would consider or
grant an extension of the Forbearance Period in light of any such offer,
proposal or agreement.
Forward-Looking Statements:
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the control of
the Company. These risks include, but are not limited to, the Company's ability
to cure the Specified Defaults during the Forbearance Period, the risk of any
default or event of default other than the Specified Defaults occurring under
the Credit Agreement during the Forbearance Period, the ability to continue as a
going concern, the ability to obtain agreements to finance the Company's
continued exploration, drilling operations and working capital needs; all the
other uncertainties, costs and risks involved in exploration and development
activities; and the other risks identified in the Company's Annual Report on
Form 10-K and its other filings with the Securities and Exchange Commission.
Investors are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ materially from
those projected in the forward-looking statements. The forward-looking
statements in this Current Report on Form 8-K are made as of the date hereof,
and the Company does not undertake any obligation to update the forward-looking
statements as a result of new information, future events or otherwise.

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Item 9.01 Financial Statements and Exhibits.



(d) Exhibits


Exhibit
Number      Description
  10.1*       Limited Forbearance Agreement to Second Amended and Restated Credit
            Agreement, dated as of June 5, 2020, among Lilis Energy, Inc., the
            subsidiaries of Lilis Energy, Inc. party thereto, BMO Harris Bank,
            N.A., as administrative agent, and the lenders party thereto.

* Filed herewith

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