SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
OMB APPROVAL
OMB Number: 3235-0287
Estimated average burden
hours per response: 0.5
  
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
Hicks George G

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
LILIS ENERGY, INC. [ LLEX ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director X 10% Owner
Officer (give title below) Other (specify below)
3. Date of Earliest Transaction (Month/Day/Year)
10/10/2018
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
Form filed by One Reporting Person
X Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 10/10/2018 J 5,952,763 A $5 47,486,944 I See footnotes(1)(2)(3)(4)(5)(9)(10)
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Series C-2 9.75% Convertible Participating Preferred Stock $6.15 10/10/2018 J 25,000 10/10/2018 (11) Common Stock, $0.001 par value 4,878,049(6) $6.15 25,000 I See footnotes(1)(2)(3)(4)(5)(9)(10)
Series D 8.25% Convertible Participating Preferred Stock $5.5 10/10/2018 J 39,254 10/10/2018 (12) Common Stock, $0.001 par value 8,386,082(7) $5.5 39,254 I See footnotes(1)(2)(3)(4)(5)(9)(10)
Convertible Debt $5.5 10/10/2018 J $56,196,240 10/10/2018 04/26/2021 Common Stock, $0.001 par value 14,338,845(8) $2.74 $109,360,329 I See footnotes(1)(2)(3)(4)(5)(9)(10)
1. Name and Address of Reporting Person*
Hicks George G

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund XI (Master), L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund XI G.P., LLC

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund XII (Master), L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund XII G.P., L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund XII UGP, LLC

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Skyway Master Fund, L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Skyway fund G.P., LLC

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Investment Partners (Offshore) Master, L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
1. Name and Address of Reporting Person*
Varde Fund VI-A, L.P.

(Last) (First) (Middle)
901 MARQUETTE AVE. S., SUITE 3300

(Street)
MINNEAPOLIS MN 055402

(City) (State) (Zip)
Explanation of Responses:
1. Pursuant to the Transaction Agreement, dated as of October 10, 2018 (the "Transaction Agreement"), by and among the Issuer and The Varde Fund XI (Master), L.P. ("Fund XI"), The Varde Fund XII (Master), L.P. ("Fund XII"), The Varde Skyway Master Fund, L.P. ("Skyway Fund"), Varde Investment Partners (Offshore) Master, L.P. ("VIPO"), The Varde Fund VI-A, L.P. ("Fund VI-A") and Varde Investment Partners, L.P. ("VIP") (collectively, the "Varde Parties"), the Varde Parties purchased 25,000 shares of Series C-2 9.75% Convertible Participating Preferred Stock (the "Series C-2 Preferred Stock") from the Issuer in a private placement and the Issuer issued to the Varde Parties, as consideration for the reduction of a portion of the outstanding principal amount of the Term Loan (as defined in the that certain Credit Agreement,
2. (Continued from Footnote 1) dated as of April 26, 2017, by and among the Issuer, the guarantors from time to time party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent (the "Term Loan Credit Agreement")), together with accrued and unpaid interest thereon and the Make-Whole Amount (as defined in the Term Loan Credit Agreement), (i) 5,952,763 shares of Common Stock and (ii) 39,254 shares of Series D 8.25% Convertible Participating Preferred Stock (the "Series D Preferred Stock").
3. (Continued from Footnote 2) The Issuer has the right to redeem the Series C-2 Preferred Stock, in whole or in part at any time (subject to certain limitations on partial redemptions), at a price per share equal to (i) stated value of $1,000, subject to increase in connection with the payment of dividends (the "Series C 2 Stated Value") then in effect multiplied by (a) 120% if redeemed during 2018, (b) 125% if redeemed during 2019 or (c) 130% if redeemed after 2019, plus (ii) accrued and unpaid dividends thereon and any other amounts payable by the Issuer in respect thereof (the "Series C-2 Optional Redemption Amount"). Each share of Series C-2 Preferred Stock is convertible at any time at the option of the holder into a number of shares of Common Stock equal to (i) the applicable Series C-2 Optional Redemption Amount divided by (ii) a conversion price of $6.15, subject to adjustment (the "Series C 2 Conversion Price").
4. (Continued from Footnote 3) Following the Closing Date, the aggregate number of shares of Series C-2 Preferred Stock became immediately convertible into 4,878,049 shares of Common Stock, based on an initial Series C 2 Conversion Price of $6.15 and the initial Series C 2 Optional Redemption Amount of 120% of the Series C 2 Stated Value. The Issuer has the right to redeem the Series D Preferred Stock, in whole or in part at any time (subject to certain limitations on partial redemptions), at a price per share equal to (i) stated value of $1,000, subject to increase in connection with the payment of dividends (the "Series D Stated Value") then in effect multiplied by 117.5%, plus (ii) accrued and unpaid dividends thereon and any other amounts payable by the Issuer in respect thereof (the "Series D Optional Redemption Amount").
5. (Continued from Footnote 4) Each share of Series D Preferred Stock is convertible at any time at the option of the holder into a number of shares of Common Stock equal to (i) the applicable Series D Optional Redemption Amount divided by (ii) a conversion price of $5.50, subject to adjustment (the "Series D Conversion Price"). Following the Closing Date, the aggregate number of shares of Series D Preferred Stock became immediately convertible into 8,386,082 shares of Common Stock, based on an initial Series D Conversion Price of $5.50 and the initial Series D Optional Redemption Amount of 117.5% of the Series D Stated Value.
6. The amount reported reflects the amount of shares of Common Stock issuable upon conversion of the Series C-2 Preferred Stock.
7. The amount reported reflects the amount of shares of Common Stock issuable upon conversion of the Series D Preferred Stock.
8. The amount reported reflects (i) 5,952,763 shares of Common Stock that was issued to the Reporting Persons and (ii) 8,386,082 shares of Common Stock issuable upon conversion of the Series D Preferred, each of which security in (i) and (ii) was received in consideration for the reduction in principal amount of the Term Loan.
9. Reflects securities held directly or indirectly by Fund XI, Fund XII, Skyway Fund, VIPO, Fund VI-A and VIP. The Varde Fund XI G.P., LLC ("Fund XI GP") is the general partner of Fund XI. The Varde Fund XII G.P., L.P. ("Fund XII GP") is the general partner of Fund XII, and The Varde Fund XII UGP, LLC ("Fund XII UGP") is the general partner of Fund XII GP. The Varde Skyway Fund G.P., LLC ("Skyway Fund GP") is the general partner of Skyway Fund. Varde Investment Partners G.P., LLC ("VIP GP") is the general partner of VIPO. VIP GP is the general partner of Fund VI-A. VIP GP is the general partner of Fund VIP. Varde Partners, L.P. ("Managing Member") is the managing member of each of Fund XI GP, Fund XII UGP, Skyway Fund GP and VIP GP. Varde Partners, Inc. ("General Partner") is the general partner of the Managing Member. Following the transaction described above,
10. (Continued from Footnote 9) George G. Hicks may be deemed to beneficially own all of the securities which may be acquired upon conversion of the Series C 2 Preferred Stock and the Series D Preferred Stock because, as the chief executive officer of the General Partner, he may be deemed to have voting and/or dispositive power over such securities. Each of the Reporting Persons (other than to the extent it directly holds securities reported herein) disclaims beneficial ownership of the securities held by the other Reporting Persons, except to the extent of such Reporting Person's pecuniary interest therein, and, pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act of 1934, each of the Reporting Persons (other than to the extent it directly holds securities reported herein) states that the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of all of the reported securities for purposes of Section 16 or for any other purpose.
11. The Series C-2 Preferred Stock is perpetual and has no expiration date. The amount reported reflects the amount of shares of Common Stock issuable upon conversion of the Series C-2 Preferred Stock.
12. The series D Preferred Stock is perpetual and has no expiration date. The amount reported reflects the amount of shares of common Stock issuable upon conversion of the Series D Preferred Stock.
Remarks:
Due to limitations of the electronic filing system, certain Reporting Persons are filing a separate Form 4.
GEORGE G. HICKS, By: /s/ George G. Hicks, Name: George G. Hicks 10/12/2018
THE VARDE FUND XI (Master), L.P., By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE FUND XI G.P., LLC, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE FUND XII (MASTER), L.P., By:The Varde Fund XII G.P., L.P., Its General Partner, By:The Varde Fund XII UGP, LLC, Its General Partner, By:Varde Partners, L.P., By:Varde Partners, Inc., By:/s/ David A. Marple, Name:David A. Marple, Title:General Co 10/12/2018
THE VARDE FUND XII G.P., L.P., By: The Varde Fund XII UGP, LLC, Its General Partner, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE FUND XII UGP, LLC, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE SKYWAY MASTER FUND, L.P., By: Varde Skyway Fund G.P., LLC, Its General Partner, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE SKYWAY FUND G.P., LLC, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
VARDE INVESTMENT PARTNERS (OFFSHORE) MASTER, L.P., By: Varde Investment Partners G.P., LLC, Its General Partner, By: Varde Partners, L.P., By: Varde Partners, Inc., By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
THE VARDE FUND VI-A, L.P.., By: Varde Investment Partners G.P., LLC, Its General Partner, By: Varde Partners, L.P., Its Managing Member, By: Varde Partners, Inc., Its General Partner, By: /s/ David A. Marple, Name: David A. Marple, Title: General Counsel 10/12/2018
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.