Lilis Energy, Inc. announced that it is the party to the Second Amended and Restated Senior Secured Revolving Credit Agreement, dated October 10, 2018, among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders party thereto, and BMO Harris Bank N.A., as 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 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” entered into a Limited Forbearance Agreement to the Credit 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 during the Forbearance Period. 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.