Vanguard Natural Resources, LLC (NASDAQ:VNR) Files An 8-K Entry into a Material Definitive Agreement

As previously disclosed, Vanguard Natural Resources, LLC (the
Company) and certain subsidiaries (such subsidiaries, together
with the Company, the Debtors) filed voluntary petitions for
relief (the cases commenced thereby, the Chapter 11 Cases) under
chapter 11 of the United States Bankruptcy Code (the Bankruptcy
Code) in the United States Bankruptcy Court for the Southern
District of Texas (the Bankruptcy Court). The Chapter 11 Cases
are being administered under the caption In re Vanguard Natural
Resources, et al. Prior to commencing the Chapter 11 Cases, the
Debtors entered into a Restructuring Support Agreement, dated as
of February 1, 2017 (the Restructuring Support Agreement), with
(i) certain holders (the Consenting 2020 Noteholders) of the
7.875% Senior Notes due 2020 (the Senior Notes due 2020); (ii)
certain holders (the Consenting 2019 Noteholders and, together
with the Consenting 2020 Noteholders, the Consenting Senior
Noteholders) of the 8 3/8% Senior Notes due 2019 (the Senior
Notes due 2019, and all claims arising under or in connection
with the Senior Notes due 2020 and Senior Notes due 2019, the
Senior Note Claims); and (iii) certain holders (the Consenting
Second Lien Noteholders) of the 7.0% Senior Secured Second Lien
Notes due 2023.

Backstop Commitment Agreement

As contemplated by the Restructuring Support Agreement, on
February 24, 2017, the Company entered into a Backstop Commitment
and Equity Investment Agreement (the Backstop Commitment
Agreement) with the commitment parties thereto (collectively, the
Commitment Parties), to which the Commitment Parties, which are
also Consenting Senior Noteholders under the Restructuring
Support Agreement, have agreed to backstop a total of $255.75
million in new-money investments in the Debtors to rights
offerings to be conducted in accordance with the Plan. The
investments consist of (i) a $127.875 million rights offering
(the Rights Offering) of new equity in a reorganized Company (the
Rights Offering Units), which will be offered pro rata to all
holders of Senior Note Claims, and (ii) a $127.875 million equity
investment, to which the Commitment Parties will purchase new
equity in the reorganized Company (the 4(a)(2) Backstop
Commitment Units). The Company will offer the Rights Offering
Units and 4(a)(2) Backstop Commitment Units each at a 25%
discount to the Companys total enterprise value. The Commitment
Parties have agreed to purchase their pro rata>share of the
Rights Offering Units to which holders of Senior Note Claims who
are not among the Commitment Parties do not duly subscribe (the
Unsubscribed Units) to the Rights Offering (the Backstop
Commitment). Certain of the Commitment Parties have also agreed
to make any part of the Equity Contribution not made by the
Second Lien Investors to the Equity Commitment Agreement, as
described below.

Subject to Bankruptcy Court approval, the Debtors will pay (i) to
the Senior Commitment Parties (as defined in the Backstop
Commitment Agreement) a commitment premium of new equity
securities in the reorganized Company (or in cash in certain
circumstances if the transactions contemplated by the Backstop
Commitment Agreement are not consummated) equal to $15,345,000,
which is an amount equal to 6.0% of the total of Rights Offering
Units together with the 4(a)(2) Backstop Commitment Units (the
Commitment Premium) and (ii) to the Commitment Parties
reimbursement of expenses, in each case, in accordance with the
terms of the Backstop Commitment Agreement. The Commitment
Premium shall be fully earned and nonrefundable as of the date of
the Bankruptcy Court order approving the Companys entry into the
Backstop Commitment Agreement. The Commitment Premium shall be
paid to the Senior Commitment Parties pro rata>according to
the amount of their respective Backstop Commitments on the
effective date of the Plan, provided that no Commitment Premium
will be paid with respect to a Commitment Party that defaults on
its Backstop Commitment.

The reorganized Company will issue the Rights Offering Units in
reliance upon the exemption from the registration requirements of
the securities laws to Section 1145 of the Bankruptcy Code (i) to
holders of Senior Note Claims to the terms set forth in the
Rights Offering procedures and (ii) to the Commitment Parties in
respect of their Commitment Premium. The reorganized Company will
issue all 4(a)(2) Backstop Commitment Units, and any Unsubscribed
Units purchased by the Commitment Parties, to the Commitment
Parties in reliance upon the exemption from registration provided
by Section 4(a)(2) under the Securities Act of 1933, as amended
(the Securities Act). As a condition to the closing of the
transactions contemplated by the Backstop Commitment Agreement,
the Company will enter into a registration rights agreement with
the Commitment Parties entitling such Commitment Parties to
request that Company register their equity securities in the
Company for sale under the Securities Act at various times.

The Commitment Parties commitments to backstop the Rights
Offering, and the other transactions contemplated by the Backstop
Commitment Agreement, are conditioned upon the satisfaction of
all conditions to the effectiveness of the Plan and other
applicable conditions precedent set forth in the Backstop
Commitment Agreement. The issuances of the Rights Offering Units
and 4(a)(2) Backstop Commitment Units to the Rights Offering and
the Backstop Commitment Agreement are

conditioned upon, among other things, confirmation of the Plan by
the Bankruptcy Court, and the Plans effectiveness upon the
Companys emergence from its Chapter 11 Cases.

The foregoing description of the Backstop Commitment Agreement is
only a summary, does not purport to be complete and is qualified
in its entirety by reference to the Backstop Commitment Agreement
attached as Exhibit 10.1 to this Current Report on Form 8-K and
is incorporated herein by reference.

Equity Commitment Agreement

Concurrently with the Backstop Commitment Agreement, on February
24, 2017, the Company entered into an Equity Commitment Agreement
(the Equity Commitment Agreement) with certain of the Consenting
Second Lien Noteholders (the Second Lien Investors) to purchase
$19.25 million in equity (the Equity Contribution) in the
reorganized Company at a 25% discount to the Companys total
enterprise value. The Debtors do not owe the Second Lien
Investors a fee for the Equity Contribution (other than the
reimbursement of certain of their expenses to the Equity
Commitment Agreement).

The foregoing description of the Equity Commitment Agreement is
only a summary, does not purport to be complete and is qualified
in its entirety by reference to the Equity Commitment Agreement
attached as Exhibit 10.2 to this Current Report on Form 8-K and
is incorporated herein by reference.

Item 8.01

The Company cautions that trading in the Companys securities
during the pendency of the anticipated Chapter 11 Cases is highly
speculative and poses substantial risks. Trading prices for the
Companys securities may bear little or no relationship to the
actual recovery, if any, by holders of the Companys securities in
the Chapter 11 Cases.

Item 9.01 Financial Statements and Exhibits.