Description of Registrants Securities

As of April 30, 2020, Lilis Energy, Inc., a Nevada corporation (the “Company”), has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which class is its common stock, par value $0.0001 per share (the “Common Stock”). As of April 30, 2020, the Common Stock is listed on the NYSE American under the symbol “LLEX.” In addition to the Common Stock, the Company’s Amended and Restated Articles of Incorporation (as amended and including the Certificates of Designation (as defined below), the “Charter”) authorize the Company to issue shares of its preferred stock, par value $0.0001 per share (the “Preferred Stock”), in one or more series as described below. As of April 30, 2020, no class or series of the Preferred Stock is registered under Section 12 of the Exchange Act.

This document describes certain matters related to the Common Stock. Because the rights of the Common Stock may be affected by the rights of one or more series of the Preferred Stock, this document also describes certain matters related to the Preferred Stock. The information in this document is based on the Charter, the Company’s Amended and Restated Bylaws (the “Bylaws”) and applicable law, including Chapters 78 and 92A of the Nevada Revised Statutes (the “NRS”), each as in effect on April 30, 2020. This document does not contain complete descriptions of the terms of the Common Stock, the Preferred Stock or any series of the Preferred Stock, and the information herein is qualified in its entirety be reference to the Company’s Charter and Bylaws, copies of which are filed as exhibits to the Company’s Annual Report on Form 10-K to which this document also is filed as an exhibit (the “Form 10-K”), as well as to the provisions of applicable law, including Chapters 78 and 92A of the NRS.

The Company is authorized by its Charter to issue 150,000,000 shares of Common Stock. As of April 30, 2020, there were 95,422,277 shares of Common Stock issued and outstanding and 253,598 shares of Common Stock held by the Company as treasury stock. Such number of issued and outstanding shares of Common Stock does not include (a) shares of Common Stock issuable upon conversion of outstanding shares of the Series E Preferred Stock (as defined below), (b) shares of Common Stock issuable upon exercise of outstanding warrants, or (c) shares of Common Stock issuable upon exercise of outstanding stock options issued under the Company’s equity incentive plans.

The authorized but unissued shares of Common Stock are available for future issuance without stockholder approval, unless otherwise required by law or applicable stock exchange rules.

Except as otherwise required by law and subject to the voting rights of holders of outstanding shares of Preferred Stock as described below, holders of shares of Common Stock are entitled to one vote per share on all matters submitted to a vote of the Company’s stockholders, including the election of directors. Generally, except as otherwise required by law (including with respect to certain matters described below) and subject to the voting rights of holders of outstanding shares of Preferred Stock as described below, all matters to be voted on by the Company’s stockholders, other than the election of directors, must be approved by a majority of the votes entitled to be cast by all shares of Common Stock that are present in person or represented by proxy at a meeting duly called and held for the purpose of acting on the applicable matter and at which a quorum is present. Under the Company’s Bylaws, the presence, in person or represented by proxy, at a meeting of the holders of a majority of the issued and outstanding stock of the Company entitled to vote at the meeting will constitute a quorum.

Except as otherwise provided by law and subject to the voting rights of holders of outstanding shares of Preferred Stock as described below, amendments to the Company’s Charter generally must be approved by a majority of the votes entitled to be cast by all outstanding shares of Common Stock. Additionally, under Chapter 92A of the NRS, with certain exceptions and subject to the voting rights of holders of outstanding shares of Preferred Stock, the approval of certain plans of merger, conversion or exchange requires the approval of a majority of the votes entitled to be cast by all outstanding shares of Common Stock.

Pursuant to Chapter 78 of the NRS and the Company’s Charter and Bylaws, directors of the Company are elected by a plurality of the votes cast in the election. The Company’s Charter and Bylaws do not provide for cumulative voting in the election of directors. The Company’s Charter and Bylaws also do not provide for classification of the Company’s board of directors. Section 78.335 of the NRS provides that directors may be removed by stockholders only by the vote of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote.

The Company’s Bylaws provide that, except as otherwise provided in any applicable provision of the NRS, any action required or permitted to be taken at a meeting of the Company’s stockholders may be taken without a meeting by written consent signed by stockholders holding a majority of the voting power of the Company’s stockholders or such greater proportion of the voting power as may otherwise be required for the approval of such action at a meeting.

Subject to the terms of any series of Preferred Stock of which shares are outstanding as described below, holders of Common Stock are entitled to receive such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available for the payment of dividends.

In the event of the liquidation or dissolution of the Company, holders of Common Stock would be entitled to share ratably in all of the Company’s assets that remain after satisfaction of all of the Company’s liabilities and the payment of any liquidation preference to holders of outstanding shares of Preferred Stock as described below.

Holders of Common Stock have no preemptive rights to acquire additional shares of Common Stock or other securities. The Common Stock is not subject to any redemption or sinking fund provisions and carries no conversion or subscription rights.

The Company is authorized to issue 10,000,000 shares of Preferred Stock. The Company’s Charter authorizes the Company’s board of directors to issue such shares of Preferred Stock in one or more series and to fix for each such series the designations, voting powers, preferences and relative, participating, optional or other special rights of such series and the limitations, qualifications and restrictions thereof.

As of April 30, 2020, an aggregate of 279,254 shares of Preferred Stock had been designated as to series and were issued and outstanding, consisting of:

The terms of each series of the Existing Preferred Stock are set forth in the Certificate of Designation of Preferences, Rights and Limitations of such series of the Existing Preferred Stock (as amended and restated in the case of the Series C Preferred Stock and the Series D Preferred Stock) filed by the Company with the Secretary of State of the State of Nevada (each, a “Certificate of Designation” and, collectively, the “Certificates of Designation”). The Certificates of Designation constitute a part of the Company’s Charter, and a copy of each of the Certificates of Designation is filed as an exhibit to the Form 10-K.

Ranking. Each series of the Existing Preferred Stock ranks senior to the Common Stock with respect to dividends and rights on the liquidation, dissolution or winding up of the Company. The Series F Preferred Stock ranks senior to each other series of the Existing Preferred Stock, the Series E Preferred Stock ranks senior to the Series D Preferred Stock and the Series C Preferred Stock, and the Series D Preferred Stock ranks senior to the Series C Preferred Stock, in each case, with respect to dividends and rights on the liquidation, dissolution or winding up of the Company.

Stated Value. Each series of the Existing Preferred Stock has an initial per share stated value of $1,000, subject to increase in connection with the payment of dividends in kind as described below (the “Stated Value”).

Dividends. Holders of each series of the Existing Preferred Stock are entitled to receive cumulative preferential (based on the relative ranking of each series) dividends, payable and compounded quarterly in arrears, at the following rates per annum of the applicable Stated Value:

Dividends on each series of the Existing Preferred Stock are payable, at the Company’s option, (i) in cash, (ii) in kind by increasing the applicable Stated Value by the amount per share of the applicable dividend or (iii) in a combination thereof.

In addition to the preferential dividends described above, holders of each series of the Existing Preferred Stock are entitled to participate in dividends paid on the Common Stock. For holders of the Series C Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock, such participation will be based on the dividends such holders would have received if, immediately prior to the applicable record date, each outstanding share of such series of Existing Preferred Stock had been converted into a number of shares of Common Stock equal to the applicable Optional Redemption Price (as defined below) divided by $7.00, subject to proportionate adjustment in connection with stock splits and combinations, dividends paid in stock and similar events affecting the outstanding Common Stock (such price, as so adjusted, the “Participation Price”) (regardless of the fact that shares of each such series of the Existing Preferred Stock are not convertible into Common Stock). For holders of the Series E Preferred Stock, such participation will be based on the number of shares of Common Stock such holders would have owned if all shares of Series E Preferred Stock had been converted to Common Stock at the Conversion Rate (as defined below) then in effect.

Optional Redemption. The Company has the right to redeem the outstanding shares of each series of the Existing Preferred Stock, in whole or in part, at any time (subject to certain limitations on partial redemptions and, with respect to the Series E Preferred Stock, subject to the additional limitations described below) at a price per share equal to (in each case, the applicable “Optional Redemption Price”):

The Company may not effect an optional redemption of the Series E Preferred Stock unless:

Shares of each series of the Existing Preferred Stock are not redeemable at the option of the holders thereof except in connection with a Change of Control as described below and are perpetual unless redeemed or, in the case of the Series E Preferred Stock, converted in accordance with the applicable Certificate of Designation.

Conversion. Each share of the Series E Preferred Stock is convertible at any time at the option of the holder into a number of shares of Common Stock equal to (a) the Series E Optional Redemption Price then in effect divided by (b) the Conversion Price (as defined below) (the “Conversion Rate”). However, for purposes of determining the Conversion Rate, the Series E Optional Redemption Price will calculated on the basis applicable to an optional redemption occurring after March 5, 2021 (i.e., multiplying the Stated Value by 100%), regardless of the timing or circumstances of the conversion. The “Conversion Price” for the Series E Preferred Stock is $2.50, subject to adjustment as described below. The Conversion Price will be subject to proportionate adjustment in connection with stock splits and combinations, dividends paid in stock and similar events affecting the outstanding Common Stock. Additionally, the Conversion Price will be adjusted, based on a broad-based weighted average formula, if the Company issues, or is deemed to issue, additional shares of Common Stock for consideration per share that is less than the Conversion Price then in effect, subject to certain exceptions. The Company does not have the right to force the conversion of shares of the Series E Preferred Stock based on the trading price of the Common Stock or otherwise.

Shares of the Series C Preferred Stock, the Series D Preferred Stock and the Series F Preferred Stock are not convertible into Common Stock.

Change of Control. Upon the occurrence of a Change of Control (as defined in the Certificates of Designation), each holder of shares of each series of the Existing Preferred Stock will have the option to:

Liquidation Preference. Upon any liquidation, dissolution or winding up of the Company:

Board Designation Rights. The Certificate of Designation for the Series C Preferred Stock provides that holders of the Series C Preferred Stock have the right, voting separately as a class, to designate two members of the Company’s board of directors for so long as the aggregate Stated Value of all outstanding shares of the Series C Preferred Stock is at least equal to $31,250,000.

The Certificate of Designation for the Series D Preferred Stock provides that holders of the Series D Preferred Stock have the right, voting separately as a class, to designate one member of the Company’s board of directors for as long as the aggregate Stated Value of all outstanding shares of the Series D Preferred Stock is at least equal to $9,813,500.

The Certificate of Designation for the Series E Preferred Stock provides that holders of the Series E Preferred Stock have the right, voting separately as a class, to designate one member of the Company’s board of directors for as long as the shares of Common Stock issuable on conversion of the outstanding shares of Series E Preferred Stock

represent at least 5% of the outstanding shares of Common Stock (giving effect to conversion of all outstanding shares of the Series E Preferred Stock).

The Certificate of Designation for the Series F Preferred Stock provides that holders of the Series F Preferred Stock have the right, voting separately as a class, to designate one member of the Company’s board of directors for as long as the aggregate Stated Value of all outstanding shares of the Series F Preferred Stock is at least equal to $13,750,000.

Voting Rights; Negative Covenants. In addition to the board designation rights described above, holders of Series E Preferred Stock are entitled to vote with the holders of the Common Stock, as a single class, on all matters submitted for a vote of holders of the Common Stock. When voting together with the Common Stock, each share of Series E Preferred Stock entitles the holder thereof to a number of votes equal to the applicable Stated Value as of the applicable record date or other determination date divided by the greater of (a) the then-applicable Conversion Price and (b) $1.88, subject to adjustment in the same manner as the Conversion Price may be adjusted as described above.

Holders of shares of the Series C Preferred Stock, the Series D Preferred Stock and the Series F Preferred Stock are not be entitled to vote with the holders of the Common Stock as a single class on any matter.

Each of the Certificates of Designation provides that, as long as any shares of the Existing Preferred Stock of the applicable series are outstanding, the Company may not, without the prior affirmative vote or prior written consent of the holders of a majority of the outstanding shares of the Existing Preferred Stock of each such series, as applicable:

Each of the Certificates of Designation further provides that, (a) in the case of the Series C Preferred Stock, as long as shares of Series C Preferred Stock having an aggregate Optional Redemption Price of at least $50 million are outstanding, (b) in the case of the Series D Preferred Stock, as long as shares of Series D Preferred Stock having an aggregate Optional Redemption Price of at least $19.627 million are outstanding, (c) in the case of the Series E Preferred Stock, as long as shares of Series E Preferred Stock having an aggregate Optional Redemption Price of at least $30 million are outstanding, and (d) in the case of the Series F Preferred Stock, as long shares of the Series F Preferred Stock having an aggregate Optional Redemption Price of at least $27.5 million are outstanding, the Company

may not, and may not permit any of its controlled subsidiaries to, without the prior affirmative vote or prior written consent of the holders of a majority of the outstanding shares of the applicable series of the Existing Preferred Stock: