Exhibit C Rights Offering Procedures, 1145 Beneficial Holder Subscription Form, and Master 1145 Subscription Form

Transcription

1 Case Document Filed in TXSB on 05/29/17 Page 1 of 45 Exhibit C Rights Offering Procedures, 1145 Beneficial Holder Subscription Form, and Master 1145 Subscription Form

2 Case Document Filed in TXSB on 05/29/17 Page 2 of 45 VANGUARD NATURAL RESOURCES, LLC (THE COMPANY ), ON BEHALF OF VNR FINANCE CORP. (AS REORGANIZED PURSUANT TO AND UNDER THE PLAN, OR ANY SUCCESSOR THERETO) 1145 RIGHTS OFFERING PROCEDURES The 1145 Rights Offering Equity is being distributed and issued by the Debtors without registration under the Securities Act of 1933, as amended (the Securities Act ) 1, in reliance upon the exemption provided in Section 1145 of the Bankruptcy Code. None of the rights being offered in the 1145 Rights Offering (the Rights ) or the 1145 Rights Offering Equity issuable upon exercise of such rights distributed pursuant to these offering procedures (the 1145 Rights Offering Procedures ) have been or will be registered under the Securities Act, nor any state or local law requiring registration for offer and sale of a security. The record ownership of the Rights is not transferable. The Disclosure Statement (as defined below) has previously been distributed in connection with the Debtors solicitation of votes to accept or reject the Plan (as defined below) and that document sets forth important information, including risk factors, that should be carefully read and considered by each 1145 Eligible Holder (as defined below) prior to making a decision to participate in the 1145 Rights Offering. Additional copies of the Disclosure Statement are available upon request from Prime Clerk LLC (the Rights Offering Subscription Agent ). The 1145 Rights Offering is being conducted by the Company on behalf of Reorganized VNR in good faith and in compliance with the Bankruptcy Code. In accordance with Section 1125(e) of the Bankruptcy Code, a debtor or any of its agents that participate, in good faith and in compliance with the applicable provisions of the Bankruptcy Code, in the offer, issuance, sale, or purchase of a security offered or sold under the plan of the debtor, of an affiliate participating in a joint plan with the debtor, or of a newly organized successor to the debtor under the plan, is not liable, on account of such participation, for violation of any applicable law, rule, or regulation governing the offer, issuance, sale or purchase of securities. 1 Terms used and not defined herein shall have the meaning assigned to them in the Joint Plan of Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, modified, or supplemented from time to time, the Plan ).

3 Case Document Filed in TXSB on 05/29/17 Page 3 of Eligible Holders should note the following times relating to the 1145 Rights Offering: Date Calendar Date Event Record Date. June 7, 2017 The date and time fixed by the Company for the determination of the holders eligible to participate in the 1145 Rights Offering. Subscription Commencement Date.. June 12, 2017 Commencement of the 1145 Rights Offering. Subscription Expiration Deadline 4:00 p.m. Central Time on June 30, 2017 The deadline for 1145 Eligible Holders to subscribe for 1145 Rights Offering Equity. An 1145 Eligible Holder s applicable 1145 Beneficial Holder Subscription Form(s) (as defined below) must be received by the 1145 Eligible Holder s Nominee (as defined below) in sufficient time to allow such Nominee to deliver the Master 1145 Subscription Form (as defined below) to the Rights Offering Subscription Agent by the Subscription Expiration Deadline Eligible Holders who are not Backstop Parties must deliver the aggregate Purchase Price (as defined below) by the Subscription Expiration Deadline Eligible Holders who are Backstop Parties must deliver the aggregate Purchase Price no later than the deadline specified in the

4 Case Document Filed in TXSB on 05/29/17 Page 4 of 45 Funding Notice (as defined below) in accordance with the terms of the Backstop Agreement.

5 Case Document Filed in TXSB on 05/29/17 Page 5 of 45 To 1145 Eligible Holders and Nominees of 1145 Eligible Holders: On May 24, 2017, the Debtors filed the Plan with the United States Bankruptcy Court for the Southern District of Texas and the Disclosure Statement Relating to the Joint Plan of Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended from time to time in accordance with its terms, the Disclosure Statement ). Pursuant to the Plan, each holder of an Allowed Senior Notes Claim as of the Record Date (as defined in the 1145 Beneficial Holder Subscription Form) (each such holder, an 1145 Eligible Holder ) has a right to participate in the 1145 Rights Offering, in accordance with the terms and conditions of these 1145 Rights Offering Procedures. Pursuant to the Plan, in the 1145 Rights Offering, each 1145 Eligible Holder will receive rights to subscribe for its pro rata portion of a rights offering of 1145 Rights Offering Equity in an aggregate amount of $10,176,081 provided that it timely and properly executes and delivers the attached 1145 Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) (the 1145 Beneficial Holder Subscription Form ) to the Rights Offering Subscription Agent or its Nominee, as applicable, in advance of the Subscription Expiration Deadline. Included with the 1145 Beneficial Holder Subscription Form, each such Nominee will receive a Master 1145 Subscription Form (a Master 1145 Subscription Form ) which it shall use to summarize the Rights exercised by each 1145 Eligible Holder that timely returns the applicable properly filled out 1145 Beneficial Holder Subscription Form(s) to such Nominee Beneficial Holder Subscription Forms should only be returned directly to the Rights Offering Subscription Agent if the 1145 Eligible Holder is the direct holder of record on the books of the applicable indenture trustee and does not hold its Allowed Senior Notes Claim through a Nominee. Please note that all 1145 Beneficial Holder Subscription Forms must be returned to the applicable Nominee in sufficient time to allow such Nominee to process and deliver the Master 1145 Subscription Form and copies of all 1145 Beneficial Holder Subscription Forms, and the accompanying IRS Forms prior to the Subscription Expiration Deadline. To the extent of any discrepancy between the Master 1145 Subscription Form and the 1145 Beneficial Holder Subscription Form(s) regarding the 1145 Eligible Holder s principal amount, the Master 1145 Subscription Form shall govern. While the amount of time necessary for a Nominee to process and deliver the Master 1145 Subscription Form to the Rights Offering Subscription Agent will vary from Nominee to Nominee, 1145 Eligible Holders are urged to consult with their Nominees to determine the necessary deadline to return their 1145 Beneficial Holder Subscription Forms. Failure to submit such 1145 Beneficial Holder Subscription Forms on a timely basis will result in forfeiture of an 1145 Eligible Holder s rights to participate in the 1145 Rights Offering. None of the Company, the Rights Offering Subscription Agent or any of the Backstop Parties will have any liability for any such failure. No 1145 Eligible Holder shall be entitled to participate in the 1145 Rights Offering unless the aggregate Purchase Price (as defined below) for the 1145 Rights Offering Equity it subscribes for is received by the Rights Offering Subscription Agent (i) in the case of an 1145 Eligible Holder that is not a Backstop Party, by the Subscription Expiration Deadline, and (ii)

6 Case Document Filed in TXSB on 05/29/17 Page 6 of 45 in the case of an 1145 Eligible Holder that is a Backstop Party, no later than the deadline specified in a written notice (a Funding Notice ) delivered by or on behalf of the Debtors to the Backstop Parties in accordance with Section 2.4 of the Backstop Agreement (the Backstop Funding Deadline ), provided that the Backstop Parties may deposit their aggregate Purchase Price in the Escrow Account (as defined below), in accordance with the terms of the Backstop Agreement. No interest is payable on any advanced funding of the Purchase Price. If the 1145 Rights Offering is terminated for any reason, the aggregate Purchase Price previously received by the Rights Offering Subscription Agent will be returned to 1145 Eligible Holders as provided in Section 6 hereof. No interest will be paid on any returned Purchase Price. Any 1145 Eligible Holder who is not a Backstop Party submitting payment via its Nominee must coordinate such payment with its Nominee in sufficient time to allow the Nominee to forward such payment to the Rights Offering Subscription Agent by the Subscription Expiration Deadline. In order to participate in the 1145 Rights Offering, an 1145 Eligible Holder must complete all of the steps outlined below. If all of the steps outlined below are not completed by the Subscription Expiration Deadline or the Backstop Funding Deadline, as applicable, an 1145 Eligible Holder shall be deemed to have forever and irrevocably relinquished and waived its right to participate in the 1145 Rights Offering Rights Offering 1145 Eligible Holders have the right, but not the obligation, to participate in the 1145 Rights Offering Eligible Holders shall receive rights to subscribe for their pro rata portion of the 1145 Rights Offering Equity. Subject to the terms and conditions set forth in the Plan and these 1145 Rights Offering Procedures, each 1145 Eligible Holder is entitled to subscribe for up to: Rights Offering Equity per $1,000 of principal amount of the 8 3/8% Senior Notes due 2019; and Rights Offering Equity per $1,000 of principal amount of the 7.875% Senior Notes due 2020; in each case at a purchase price of $15 per share (the Purchase Price ). The difference in the number of 1145 Rights Offering Equity that an 1145 Eligible Holder is entitled to subscribe for with respect to each series of Senior Notes is to take into account the differing amounts of pre-petition accrued and unpaid interest thereon. There will be no over-subscription privilege in the 1145 Rights Offering. Any 1145 Rights Offering Equity that are unsubscribed by the 1145 Eligible Holders entitled thereto will not be offered to other 1145 Eligible Holders but will be purchased by the applicable Backstop Parties in accordance with the Backstop Agreement. Subject to the terms and conditions of the Backstop Agreement, each Backstop Party is obligated to

7 Case Document Filed in TXSB on 05/29/17 Page 7 of 45 purchase its pro rata portion of the applicable 1145 Rights Offering Equity. Any 1145 Eligible Holder that subscribes for 1145 Rights Offering Equity and is deemed to be an underwriter under 1145(b) of the Bankruptcy Code will be subject to restrictions under the Securities Act on its ability to resell those securities. Resale restrictions are discussed in more detail in Article XII of the Disclosure Statement, entitled Certain Securities Law Matters. SUBJECT TO THE TERMS AND CONDITIONS OF THE 1145 RIGHTS OFFERING PROCEDURES AND THE BACKSTOP AGREEMENT IN THE CASE OF ANY BACKSTOP PARTY, ALL SUBSCRIPTIONS SET FORTH IN THE APPLICABLE 1145 BENEFICIAL HOLDER SUBSCRIPTION FORM(S) ARE IRREVOCABLE. 2. Subscription Period The 1145 Rights Offering will commence on the Subscription Commencement Date and will expire at the Subscription Expiration Deadline. Each 1145 Eligible Holder intending to purchase 1145 Rights Offering Equity in any 1145 Rights Offering must affirmatively elect to exercise its Rights in the manner set forth in the applicable 1145 Beneficial Holder Subscription Form by the Subscription Expiration Deadline. Any exercise of Rights by an 1145 Eligible Holder after the Subscription Expiration Deadline will not be allowed and any purported exercise received by the Rights Offering Subscription Agent after the Subscription Expiration Deadline, regardless of when the documents or payment relating to such exercise were sent, will not be honored, except that the Company shall have the discretion, with the consent of the Senior Commitment Parties holding at least two-thirds of the aggregate Backstop Commitments (as identified in Schedule 1 to the Backstop Agreement) as of the date on which such consent is solicited (the Requisite Commitment Parties ), to allow any exercise of Rights after the Subscription Expiration Deadline. The Subscription Expiration Deadline may be extended with the consent of the Requisite Commitment Parties, or as required by law.

8 Case Document Filed in TXSB on 05/29/17 Page 8 of Delivery of Subscription Documents Each 1145 Eligible Holder may exercise all or any portion of such 1145 Eligible Holder s Rights, but subject to the terms and conditions contained herein. In order to facilitate the exercise of the Rights, beginning on the Subscription Commencement Date, the applicable 1145 Beneficial Holder Subscription Form and these 1145 Rights Offering Procedures will be sent to each 1145 Eligible Holder, together with appropriate instructions for the proper completion, due execution and timely delivery of the executed 1145 Beneficial Holder Subscription Form and the payment of the applicable aggregate Purchase Price for its 1145 Rights Offering Equity. Distribution by the Rights Offering Subscription Agent of the 1145 Beneficial Holder Subscription Form and these procedures to the Nominees reflected on the securities position report provided by DTC as of the Record Date (with instructions to forward such documents to the Nominees beneficial holder clients) and/or posting of these procedures and 1145 Beneficial Holder Subscription Form on DTC s LENS Noticing System shall constitute valid and sufficient delivery of such documents, and satisfy the obligations of the Rights Offering Subscription Agent with respect thereto. Nominees may utilize an agent to distribute the 1145 Subscription Form and these procedures to their beneficial holder clients and seek reasonable reimbursement of the costs associated therewith by submitting a timely invoice to the Rights Offering Subscription Agent. 4. Exercise of Rights (a) In order to validly exercise its Rights, each 1145 Eligible Holder that is not a Backstop Party must: i. return duly completed and executed applicable 1145 Beneficial Holder Subscription Form(s) to the Rights Offering Subscription Agent or its Nominee, as applicable, so that, if applicable, such documents may be transmitted to the Rights Offering Subscription Agent by the Nominee, so that such documents are actually received by the Rights Offering Subscription Agent by the Subscription Expiration Deadline; and ii. at the same time it returns its 1145 Beneficial Holder Subscription Form(s) to its Nominee, but in no event later than the Subscription Expiration Deadline, arrange for the payment by its Nominee of, the applicable Purchase Price to the Rights Offering Subscription Agent by wire transfer ONLY of immediately available funds in accordance with the instructions included in the applicable 1145 Beneficial Holder Subscription Form(s). (b) In order to validly exercise its Rights, each 1145 Eligible Holder that is a Backstop Party must: i. return duly completed and executed applicable 1145 Beneficial Holder Subscription Form(s) to the Rights Offering Subscription Agent or its Nominee, as applicable so that, if applicable, such documents may be transmitted to the Rights Offering Subscription Agent by the Nominee, so that such documents are actually received by

9 Case Document Filed in TXSB on 05/29/17 Page 9 of 45 the Rights Offering Subscription Agent by the Subscription Expiration Deadline; and ii. no later than the Backstop Funding Deadline, pay the applicable Purchase Price to the Rights Offering Subscription Agent or to the escrow account established and maintained by a third party satisfactory to the Backstop Parties and the Company (the Escrow Account ) by wire transfer ONLY of immediately available funds in accordance with the wire instructions included in the Funding Notice. ALL BACKSTOP PARTIES MUST COORDINATE PAYMENT (WHETHER DIRECTLY OR THROUGH THEIR NOMINEES) OF THEIR APPLICABLE PURCHASE PRICE DIRECTLY TO THE SUBSCRIPTION AGENT OR TO THE ESCROW ACCOUNT, AS APPLICABLE. (c) (d) (e) With respect to 4(a) and (b) above, each 1145 Eligible Holder must duly complete, execute and return the applicable 1145 Beneficial Holder Subscription Form(s) in accordance with the instructions herein to its Nominee in sufficient time to allow its Nominee to process its instructions and deliver to the Rights Offering Subscription Agent the Master 1145 Subscription Form, its completed 1145 Beneficial Holder Subscription Form(s), and, solely with respect to the 1145 Eligible Holders that are not Backstop Parties, payment of the applicable Purchase Price, payable for the 1145 Rights Offering Equity elected to be purchased by such 1145 Eligible Holder, by the Subscription Expiration Deadline Eligible Holders that are Backstop Parties must deliver their payment of the applicable Purchase Price payable for the 1145 Rights Offering Equity elected to be purchased by such Backstop Party directly to the Rights Offering Subscription Agent or to the Escrow Account, as applicable, no later than the Backstop Funding Deadline. In the event that the funds received by the Rights Offering Subscription Agent or the Escrow Account, as applicable, from any 1145 Eligible Holder do not correspond to the Purchase Price payable for the 1145 Rights Offering Equity elected to be purchased by such 1145 Eligible Holder, the number of the 1145 Rights Offering Equity deemed to be purchased by such 1145 Eligible Holder will be the lesser of (a) the number of the 1145 Rights Offering Equity elected to be purchased by such 1145 Eligible Holder and (b) a number of the 1145 Rights Offering Equity determined by dividing the amount of the funds received by the Purchase Price, in each case up to such 1145 Eligible Holder s pro rata portion of 1145 Rights Offering Equity. The cash paid to the Rights Offering Subscription Agent in accordance with these 1145 Rights Offering Procedures will be deposited and held by the Rights Offering Subscription Agent in a segregated account until released to the Debtors in connection with the settlement of the 1145 Rights Offering on the Effective Date. The Rights Offering Subscription Agent may not use such cash for any other purpose prior to the Effective Date and may not encumber or permit such cash to be encumbered with any lien or similar encumbrance. The cash held by

10 Case Document Filed in TXSB on 05/29/17 Page 10 of 45 the Rights Offering Subscription Agent hereunder shall not be deemed part of the Debtors bankruptcy estates. 5. Transfer Restriction; Revocation The record ownership in the Rights is not transferable. If any Rights are transferred by an 1145 Eligible Holder in contravention of the foregoing, the Rights will be cancelled, and neither such 1145 Eligible Holder nor the purported transferee will receive any 1145 Rights Offering Equity otherwise purchasable on account of such transferred 1145 Rights. Any Senior Notes traded after the Record Date will not be traded with the Rights attached. Once an 1145 Eligible Holder has properly exercised its Rights, subject to the terms and conditions contained in these 1145 Rights Offering Procedures and the Backstop Agreement in the case of any Backstop Party, such exercise will be irrevocable. 6. Termination/Return of Payment Unless the Effective Date has occurred, the 1145 Rights Offering will be deemed automatically terminated without any action of any party upon the earlier of (i) termination of the Plan or rejection of the Plan by all classes entitled to vote, (ii) termination of the RSA in accordance with its terms, (iii) termination of the Backstop Agreement in accordance with its terms and (iv) the Outside Date (as defined in the Backstop Agreement) (as such date may be extended pursuant to the terms of the Backstop Agreement). In the event the 1145 Rights Offering is terminated, any payments received pursuant to these 1145 Rights Offering Procedures will be returned, without interest, to the applicable 1145 Eligible Holder as soon as reasonably practicable, but in any event, within six (6) Business Days after the date of termination. 7. Settlement of the 1145 Rights Offering and Distribution of the 1145 Rights Offering Equity The settlement of the 1145 Rights Offering is conditioned on confirmation of the Plan by the Bankruptcy Court, compliance by the Debtors with these 1145 Rights Offering Procedures, and the simultaneous occurrence of the Effective Date. The Debtors intend that the 1145 Rights Offering Equity will be issued to the 1145 Eligible Holders and/or to any party that an 1145 Eligible Holder so designates in the 1145 Beneficial Holder Subscription Form(s), in book-entry form, and that DTC, or its nominee, will be the holder of record of such 1145 Rights Offering Equity. To the extent DTC is unwilling or unable to make the 1145 Rights Offering Equity eligible on the DTC system, the 1145 Rights Offering Equity will be issued directly to the 1145 Eligible Holder or its designee. 8. Fractional Shares No fractional rights or 1145 Rights Offering Equity will be issued in the 1145 Rights Offering. All share allocations (including each 1145 Eligible Holder s 1145 Rights Offering Equity) will be calculated and rounded down to the nearest whole share.

11 Case Document Filed in TXSB on 05/29/17 Page 11 of Validity of Exercise of Rights All questions concerning the timeliness, viability, form and eligibility of any exercise of Rights will be determined in good faith by the Debtors in consultation with the Requisite Commitment Parties, and, if necessary, subject to a final and binding determination by the Bankruptcy Court. The Debtor, with the consent of the Requisite Commitment Parties, may waive or reject any defect or irregularity in, or permit such defect or irregularity to be corrected within such time as they may determine in good faith, the purported exercise of any Rights. Subscription Forms will be deemed not to have been received or accepted until all irregularities have been waived or cured within such time as the Debtors determine in good faith in consultation with the Requisite Commitment Parties. Before exercising any Rights, 1145 Eligible Holders should read the Disclosure Statement and the Plan for information relating to the Debtors and the risk factors to be considered. All calculations, including, to the extent applicable, the calculation of (i) the value of any 1145 Eligible Holder s Allowed Senior Notes Claims for the purposes of the 1145 Rights Offering and (ii) any 1145 Eligible Holder s 1145 Rights Offering Equity, shall be made in good faith by the Company with the consent of the Requisite Commitment Parties and in each case in accordance with any Claim amounts included in the Plan, and any disputes regarding such calculations shall be subject to a final and binding determination by the Bankruptcy Court. 10. Modification of Procedures With the prior written consent of the Requisite Commitment Parties, the Debtors reserve the right to modify these 1145 Rights Offering Procedures, or adopt additional procedures consistent with these 1145 Rights Offering Procedures to effectuate the 1145 Rights Offering and to issue the 1145 Rights Offering Equity, provided, however, that the Debtors shall provide prompt written notice to each 1145 Eligible Holder of any material modification to these 1145 Rights Offering Procedures made after the Subscription Commencement Date. In so doing, and subject to the consent of the Requisite Commitment Parties, the Debtors may execute and enter into agreements and take further action that the Debtors determine in good faith is necessary and appropriate to effectuate and implement the 1145 Rights Offering and the issuance of the 1145 Rights Offering Equity. The Debtors shall undertake reasonable procedures to confirm that each participant in the 1145 Rights Offering is in fact an 1145 Eligible Holder. 11. Inquiries And Transmittal of Documents; Rights Offering Subscription Agent The 1145 Rights Offering Instructions for 1145 Eligible Holders attached hereto should be carefully read and strictly followed by the 1145 Eligible Holders. Questions relating to the 1145 Rights Offering should be directed to the Rights Offering

12 Case Document Filed in TXSB on 05/29/17 Page 12 of 45 Subscription Agent via to (please reference Vanguard Subscription in the subject line) or at the following phone number: (844) The risk of non-delivery of all documents and payments to the Rights Offering Subscription Agent, the Escrow Account and any Nominee is on the 1145 Eligible Holder electing to exercise its Rights and not the Debtors, the Rights Offering Subscription Agent, or the Backstop Parties.

13 Case Document Filed in TXSB on 05/29/17 Page 13 of 45 VANGUARD NATURAL RESOURCES, LLC, ON BEHALF OF AN ENTITY TO BE FORMED LATER 1145 RIGHTS OFFERING INSTRUCTIONS FOR 1145 ELIGIBLE HOLDERS Terms used and not defined herein shall have the meaning assigned to them in the Plan. To elect to participate in the 1145 Rights Offering, you must follow the instructions set out below: 1. Insert the principal amount of the Allowed Senior Notes Claims that you held as of the Record Date in Item 1 of your applicable 1145 Beneficial Holder Subscription Form(s) (if you do not know such amount, please contact your Nominee immediately). 2. Complete the calculation in Item 2a of your applicable 1145 Beneficial Holder Subscription Form(s), which calculates the maximum number of 1145 Rights Offering Equity available for you to purchase. Such amount must be rounded down to the nearest whole share. 3. Complete the calculation in Item 2b of your applicable 1145 Beneficial Holder Subscription Form(s) to indicate the number of 1145 Rights Offering Equity that you elect to purchase and calculate the aggregate Purchase Price for the 1145 Rights Offering Equity that you elect to purchase. 4. Confirm whether you are a Backstop Party pursuant to the representation in Item 3 of your applicable 1145 Beneficial Holder Subscription Form(s). (This section is only for Backstop Parties, each of whom is aware of their status as a Backstop Party). 5. Read, complete and sign the certification in Item 5 of your applicable 1145 Beneficial Holder Subscription Form(s). Such execution shall indicate your acceptance and approval of the terms and conditions set forth in these 1145 Rights Offering Procedures. 6. Read, complete and sign an IRS Form W-9 if you are a U.S. person. If you are a non- U.S. person, read, complete and sign an appropriate IRS Form W-8. These forms may be obtained from the IRS at its website: 7. Return your applicable signed 1145 Beneficial Holder Subscription Form(s) to your Nominee in sufficient time to allow your Nominee to process your instructions and prepare and deliver the Master 1145 Subscription Form to the Rights Offering Subscription Agent by the Subscription Expiration Deadline. 8. Arrange for full payment of the aggregate Purchase Price by wire transfer of immediately available funds, calculated in accordance with Item 2b of your applicable 1145 Beneficial Holder Subscription Form(s). For 1145 Eligible Holders that are not Backstop Parties, please instruct your Nominee to coordinate payment of the Purchase Price and transmit and deliver such payment to the Rights Offering Subscription Agent

14 Case Document Filed in TXSB on 05/29/17 Page 14 of 45 by the Subscription Expiration Deadline. An 1145 Eligible Holder that is not a Backstop Party should follow the payment instructions as provided in the Master 1145 Subscription Form. Any Backstop Party should follow the payment instructions that will be provided in the Funding Notice, except to the extent of any aggregate Purchase Price previously paid by such 1145 Eligible Holder to the Rights Offering Subscription Agent or the Escrow Account in accordance with the terms of the Backstop Agreement. The Subscription Expiration Deadline is 4:00 p.m. Central Time on June 30, Please note that the 1145 Beneficial Holder Subscription Form(s) must be received by your broker, bank, commercial bank, transfer agent, trust company, dealer, or other agent or nominee (as applicable, the Nominee ) in sufficient time to allow such Nominee to process and deliver the Master 1145 Subscription Form to the Rights Offering Subscription Agent, by the Subscription Expiration Deadline, along with the appropriate funding (with respect to 1145 Eligible Holders that are not Backstop Parties) or the subscription represented by your applicable 1145 Beneficial Holder Subscription Form(s) will not be counted and you will be deemed forever to have relinquished and waived your right to participate in the 1145 Rights Offering Eligible Holders that are Backstop Parties must deliver the appropriate funding directly to the Rights Offering Subscription Agent or to the Escrow Account, as applicable, pursuant to the Funding Notice (except to the extent of any funding previously provided by any such 1145 Eligible Holder to the Rights Offering Subscription Agent or the Escrow Account in accordance with the terms of the Backstop Agreement) no later than the Backstop Funding Deadline.

15 Case Document Filed in TXSB on 05/29/17 Page 15 of 45 VANGUARD NATURAL RESOURCES, LLC, ON BEHALF OF VNR FINANCE CORP. (AS REORGANIZED PURSUANT TO AND UNDER THE PLAN, OR ANY SUCCESSOR THERETO) 1145 BENEFICIAL HOLDER SUBSCRIPTION FORM FOR 1145 RIGHTS OFFERING FOR USE BY 1145 ELIGIBLE HOLDERS OF 8 3/8% SENIOR NOTES DUE 2019 IN CONNECTION WITH DEBTORS DISCLOSURE STATEMENT DATED May 24, 2017 SUBSCRIPTION EXPIRATION DEADLINE The Subscription Expiration Deadline is 4:00 p.m. Central Time on June 30, Please note that your 1145 Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) must be received by your Nominee in sufficient time to allow such Nominee to deliver the Master 1145 Subscription Form, attached hereto, along with completing wire transfer of the Purchase Price with respect to 1145 Eligible Holders that are not Backstop Parties to the Rights Offering Subscription Agent by the Subscription Expiration Deadline or the subscription represented by your 1145 Beneficial Holder Subscription Form will not be counted and will be deemed forever relinquished and waived Eligible Holders that are Backstop Parties must deliver the appropriate funding directly to the Rights Offering Subscription Agent or the Escrow Account, as applicable (except to the extent of any funding previously provided by any such 1145 Eligible Holder to the Rights Offering Subscription Agent or the Escrow Account in accordance with the terms of the Backstop Agreement), no later than the deadline specified in the Funding Notice (the Backstop Funding Deadline ). The 1145 Rights Offering Equity is being distributed and issued by the Debtors without registration under the Securities Act of 1933, as amended (the Securities Act ), in reliance upon the exemption provided in Section 1145(a) of the Bankruptcy Code. You must complete Exhibit A, if, pursuant to Section 5 of the 1145 Rights Offering Procedures, you are designating any other person to receive all or a portion of the 1145 Rights Offering Equity. Such transferee must also complete an IRS Form W-8 or IRS form W-9, as applicable. In such case, you must complete Exhibit A and deliver it to the Rights Offering Subscription Agent. None of the 1145 Rights Offering Equity has been registered under the Securities Act, nor any State or local law requiring registration for offer or sale of a security.

16 Case Document Filed in TXSB on 05/29/17 Page 16 of 45 Please consult the Plan, the Disclosure Statement and the 1145 Rights Offering Procedures (including the 1145 Rights Offering Instructions attached thereto) for additional information with respect to this 1145 Beneficial Holder Subscription Form. Any terms capitalized but not defined herein shall have the meaning as set forth in the Plan or the 1145 Rights Offering Procedures. If you have any questions, please contact the Rights Offering Subscription Agent via to (please reference Vanguard Subscription in the subject line), or at the following phone number: (844) The record date for the 1145 Rights Offering is June 7, 2017 (the Record Date ).

17 Case Document Filed in TXSB on 05/29/17 Page 17 of 45 Item 1. Amount of Notes. I certify that I am a beneficial holder of 8 3/8% Senior Notes due 2019 (the Notes ), which pursuant to that Fourth Supplemental Indenture, dated October 8, 2015, where following a merger and restructuring, Vanguard Operating, LLC, a wholly owned subsidiary of Vanguard Natural Resources, LLC, became the sole issuer and primary obligor of the Notes, in the following principal amount as of the Record Date (insert amount on the lines below) or that I am the authorized signatory of that beneficial holder. For purposes of this 1145 Beneficial Holder Subscription Form, do not adjust the principal (face) amount for any accrued or unmatured interest. Accrued prepetition interest is accounted for in the multiplier set forth in Item 2a below. (If a Nominee holds your Notes on your behalf and you do not know the principal amount, please contact your Nominee immediately.) Insert principal amount of 8 3/8% Senior Notes due 2019 held as of the Record Date. Item 2. Rights. 2a. Calculation of Maximum Number of 1145 Rights Offering Equity. The maximum number of 1145 Rights Offering Equity for which you may subscribe is calculated as follows: (Insert principal amount from Item 1 above) X = (Maximum number of 1145 Rights Offering Equity) (Round down to nearest whole number) Each 1145 Eligible Holder is entitled to subscribe for Rights Offering Equity per $1,000 of principal amount of the Notes (the Maximum 1145 Participation Amount ), subject to the individual limits included in the calculations in the table above. To subscribe, fill out Items 1, 2a, 2b and 3, read Item 4 and read and complete Item 5 below. 2b. Purchase Price. By filling in the following blanks, you are indicating that the undersigned 1145 Eligible Holder is interested in purchasing the number of 1145 Rights Offering Equity specified below (specify a whole number of 1145 Rights Offering Equity, which is not greater than the Maximum 1145 Participation Amount calculated in Item 2a above), on the terms and subject to the conditions set forth in the 1145 Rights Offering Procedures. (Indicate whole number of 1145 Rights Offering Equity you elect to purchase) (Cannot exceed the Maximum 1145 Participation Amount) X $15 = $ Aggregate Purchase Price

18 Case Document Filed in TXSB on 05/29/17 Page 18 of 45 Item 3. Backstop Party Representation. (This section is only for Backstop Parties, each of whom is aware of its status as a Backstop Party. Please note that checking the box below if you are not a Backstop Party may result in forfeiture of your rights to participate in the 1145 Rights Offering). I am a Backstop Party identified in the Backstop Agreement dated as of February 24, 2017, as amended and restated on May 23, 2017, and as further amended or amended and restated from time to time, among Vanguard Natural Resources, LLC and the Backstop Parties signatory thereto (the Backstop Agreement ). Item 4. Payment and Delivery Instructions For 1145 Eligible Holders that did not check the box in Item 3, payment of the Purchase Price calculated pursuant to Item 2b above shall be made by wire transfer ONLY of immediately available funds in accordance with the procedures of your Nominee. For 1145 Eligible Holders that are Backstop Parties and did check the box in Item 3, payment of the Purchase Price calculated pursuant to Item 2b above shall be made by wire transfer ONLY of immediately available funds directly to an escrow account established and maintained by a third party satisfactory to the Backstop Parties that have requested such escrow account or to a segregated account maintained by the Rights Offering Subscription Agent, in each case in accordance with the Funding Notice that will be delivered to you pursuant to the Backstop Agreement (except to the extent of any funding previously provided by any such 1145 Eligible Holder to the Rights Offering Subscription Agent or the Escrow Account in accordance with the terms of the Backstop Agreement). All cash payments with respect to the exercise of the Rights that are being transmitted to the Rights Offering Subscription Agent shall be made by wire transfer of immediately available funds in accordance with the wire instructions provided in the Funding Notice. NO NOMINEE OR BROKER MAY MAKE ANY PAYMENT IN RESPECT OF THE PURCHASE PRICE OF A BACKSTOP PARTY WHO CHECKED THE BOX IN ITEM 3 AND NO NOMINEE OR BROKER MAY DEDUCT FUNDS FROM THE ACCOUNT OF A BACKSTOP PARTY TO MAKE ANY SUCH PAYMENT (UNLESS DIRECTED BY SUCH BACKSTOP PARTY TO DO SO). Please mail or deliver your completed 1145 Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to your Nominee in sufficient time to allow such Nominee to deliver the Master 1145 Subscription Form (and associated documentation) and all funds (solely with respect to 1145 Eligible Holders that are not Backstop Parties) to the Rights Offering Subscription Agent by the Subscription Expiration Deadline. PLEASE NOTE: NO SUBSCRIPTION WILL BE VALID UNLESS THIS 1145

19 Case Document Filed in TXSB on 05/29/17 Page 19 of 45 BENEFICIAL HOLDER SUBSCRIPTION FORM IS VALIDLY SUBMITTED TO YOUR NOMINEE IN SUFFICIENT TIME TO ALLOW YOUR NOMINEE TO DELIVER THE MASTER 1145 SUBSCRIPTION FORM ALONG WITH THE PURCHASE PRICE (SOLELY WITH RESPECT TO 1145 ELIGIBLE HOLDERS THAT ARE NOT BACKSTOP PARTIES) TO THE RIGHTS OFFERING SUBSCRIPTION AGENT BY THE SUBSCRIPTION EXPIRATION DEADLINE ELIGIBLE HOLDERS THAT ARE BACKSTOP PARTIES MUST DELIVER (OR COORDINATE DELIVERY OF) THE APPROPRIATE FUNDING DIRECTLY TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR THE ESCROW ACCOUNT, AS APPLICABLE, NO LATER THAN THE BACKSTOP FUNDING DEADLINE (EXCEPT TO THE EXTENT OF ANY FUNDING PREVIOUSLY PROVIDED BY ANY SUCH 1145 ELIGIBLE HOLDER TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR THE ESCROW ACCOUNT IN ACCORDANCE WITH THE TERMS OF THE BACKSTOP AGREEMENT). Item 5. Certification. The undersigned hereby certifies that (i) as of the Record Date, the undersigned was the beneficial holder of the Notes set forth in Item 1 above (the Holder ), or the authorized signatory (the Authorized Signatory ) of such holder acting on behalf of the Holder, (ii) the Holder has received a copy of the Plan, the Disclosure Statement and the 1145 Rights Offering Procedures (including the 1145 Rights Offering Instructions attached thereto) and (iii) the Holder understands that the exercise of the rights under the 1145 Rights Offerings is subject to all the terms and conditions set forth in the Plan, the 1145 Rights Offering Procedures and, if applicable, the Backstop Agreement. By electing to subscribe for the amount of 1145 Rights Offering Equity designated under Item 2b above, the Holder (or the Authorized Signatory on behalf of the Holder) is hereby instructing its Nominee to arrange for (i) the completion and delivery of its Master 1145 Subscription Form to the Rights Offering Subscription Agent before the Subscription Expiration Deadline and (ii) payment of the Purchase Price listed under Item 2b above by the Subscription Expiration Deadline (solely with respect to 1145 Eligible Holders that are not Backstop Parties). The Holder (or the Authorized Signatory on behalf of such Holder) acknowledges that, by executing this 1145 Beneficial Holder Subscription Form, the 1145 Eligible Holder named below has elected to subscribe for the number of 1145 Rights Offering Equity designated under Item 2b above and will be bound to pay the Purchase Price listed under Item 2b above for the 1145 Rights Offering Equity it has subscribed for and that it may be liable to the Debtors to the extent of any nonpayment.

20 Case Document Filed in TXSB on 05/29/17 Page 20 of 45 Date: Name of 1145 Eligible Holder: U.S. Federal Tax EIN/SSN (optional): If Non-U.S. person, check here and attach appropriate IRS Form W- 8 If U.S. person, check here and attach IRS Form W-9 Signature: Name of Signatory: Title: Address: Telephone Number: Fax: PLEASE COMPLETE THE THREE SECTIONS BELOW IF 1145 RIGHTS OFFERING EQUITY IS TO BE ISSUED TO THE 1145 ELIGIBLE HOLDER, AND/OR PLEASE COMPLETE EXHIBIT A IF YOU ARE DESIGNATING ANY OTHER PERSON TO RECEIVE ALL OR A PORTION OF THE 1145 RIGHTS OFFERING EQUITY. A. Please indicate on the lines provided below the registration name of the 1145 Eligible Holder in whose name the 1145 Rights Offering Equity should be issued, in the event the 1145 Rights Offering Equity are not DTC eligible (it is strongly recommended that the below information be typed to ensure that it is legible): Registration Name Line 1 (Maximum 35 Characters): Registration Name Line 2 (Maximum 35 Characters): (if needed) Address 1: Address 2: Address 3: Telephone:

21 Case Document Filed in TXSB on 05/29/17 Page 21 of 45 B. DTC Participant for the deposit of 1145 Rights Offering Equity, in the event the 1145 Rights Offering Equity are DTC eligible: DTC Participant Name: DTC Participant Number: Beneficial Holder Account Number Reference: DTC Participant Contact Name: DTC Participant Contact Telephone: DTC Participant Contact C. Wire information in the event a refund is needed: Account Name: Account Holder Address: Bank Account No.: ABA/Routing No.: Bank Name: Bank Address: Reference: PLEASE RETURN THIS 1145 BENEFICIAL HOLDER SUBSCRIPTION FORM (WITH ACCOMPANYING IRS FORM W-9 OR APPROPRIATE IRS FORM W-8, AS APPLICABLE) ONLY TO YOUR NOMINEE. DO NOT RETURN THIS FORM DIRECTLY TO THE RIGHTS OFFERING SUBSCRIPTION AGENT. PLEASE COMPLETE EXHIBIT A IF YOU ARE DESIGNATING ANY OTHER PERSON TO RECEIVE ALL OR A PORTION OF THE 1145 RIGHTS OFFERING EQUITY.

22 Case Document Filed in TXSB on 05/29/17 Page 22 of 45 Special Delivery Instructions EXHIBIT A IF THERE IS MORE THAN ONE DESIGNEE, COMPLETE A SEPARATE FORM FOR EACH DESIGNEE. YOU MUST SPECIFY THE NUMBER OF 1145 RIGHTS OFFERING EQUITY FOR EACH DESIGNEE (WHICH CANNOT EXCEED THE NUMBER OF 1145 RIGHTS OFFERING EQUITY YOU ELECTED TO PURCHASE) Please complete ONLY if 1145 Rights Offering Equity are to be issued in the name of someone OTHER than the 1145 Eligible Holder. Such person(s) must also complete an IRS Form W-8 or IRS Form W-9, as applicable. Number of 1145 Rights Offering Equity to be Issued to Designee: Designee Name: U.S. Federal Tax EIN/SSN (optional for Non U.S. Persons): If Non-U.S. person, check here and attach appropriate IRS Form W- 8 If U.S. person, check here and attach IRS Form W-9 A. Please indicate on the lines provided below the registration name of the designee in whose name the 1145 Rights Offering Equity should be issued, in the event the 1145 Rights Offering Equity are not DTC eligible (it is strongly recommended that the below information be typed to ensure that it is legible): Registration Name Line 1 (Maximum 35 Characters): Registration Name Line 2 (Maximum 35 Characters): (if needed) Address 1: Address 2: Address 3: Telephone: [Continued next page]

23 Case Document Filed in TXSB on 05/29/17 Page 23 of 45 B. DTC Participant for the deposit of 1145 Rights Offering Equity, in the event the 1145 Rights Offering Equity are DTC eligible: DTC Participant Name: DTC Participant Number: Beneficial Holder Account Number Reference: DTC Participant Contact Name: DTC Participant Contact Telephone: DTC Participant Contact C. Wire information in the event a refund is needed: Account Name: Account Holder Address: Bank Account No.: ABA/Routing No.: Bank Name: Bank Address: Reference:

24 Case Document Filed in TXSB on 05/29/17 Page 24 of 45 VANGUARD NATURAL RESOURCES, LLC, ON BEHALF OF VNR FINANCE CORP. (AS REORGANIZED PURSUANT TO AND UNDER THE PLAN, OR ANY SUCCESSOR THERETO) MASTER 1145 SUBSCRIPTION FORM FOR 1145 RIGHTS OFFERING FOR USE BY 1145 ELIGIBLE HOLDERS IN CONNECTION WITH DEBTORS DISCLOSURE STATEMENT DATED May 24, 2017 For use by brokers, banks, commercial banks, transfer agents, trust companies, dealers, or other agents or nominees for beneficial holders of Vanguard Natural Resources, LLC s 8 3/8% Senior Notes due 2019 (the Notes ) governed by an Indenture, dated as of May 27, 2011 (the Original Indenture ), providing for the issuance of the Notes by Eagle Rock Energy Partners, L.P. and Eagle Rock Energy Finance Corp. from time to time in an unlimited aggregate principal amount, as supplemented by the First Supplemental Indenture (herein so called) to the Original Indenture, dated as of June 28, 2011, adding a guarantor for the Notes, the Second Supplemental Indenture (herein so called), dated as of November 19, 2012, adding another guarantor for the Notes, the Third Supplemental Indenture (herein so called), dated as of July 1, 2014, making certain amendments to the Indenture in connection with an exchange offer and the Fourth Supplemental Indenture (herein so called), dated October 8, 2015, where following a merger and restructuring, Vanguard Operating, LLC, a wholly owned subsidiary of Vanguard Natural Resources, LLC, became the sole issuer and primary obligor of the Notes. The Original Indenture, as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture is referred to herein as the Indenture. YOUR MASTER 1145 SUBSCRIPTION FORM AND COPIES OF THE 1145 BENEFICIAL HOLDER SUBSCRIPTION FORMS (WITH ACCOMPANYING TAX FORMS) MUST BE RECEIVED BY THE RIGHTS OFFERING SUBSCRIPTION AGENT, BY 4:00 P.M. (CENTRAL TIME) ON JUNE 30, 2017, (THE SUBSCRIPTION EXPIRATION DEADLINE ) AND PAYMENTS OF THE PURCHASE PRICE MUST BE RECEIVED BY THE SUBSCRIPTION EXPIRATION DEADLINE (SOLELY WITH RESPECT TO 1145 ELIGIBLE HOLDERS THAT ARE NOT BACKSTOP PARTIES) OR THE SUBSCRIPTIONS REPRESENTED BY THIS MASTER 1145 SUBSCRIPTION FORM WILL NOT BE COUNTED AND WILL BE DEEMED FOREVER RELINQUISHED AND WAIVED. NO PAYMENTS NEED TO BE MADE BY ANY NOMINEE FOR RIGHTS EXERCISED BY ANY BACKSTOP PARTIES AS SUCH PARTIES WILL REMIT THEIR PAYMENTS DIRECTLY TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR AN ESCROW ACCOUNT (EXCEPT TO THE EXTENT OF ANY FUNDING PREVIOUSLY PROVIDED BY ANY SUCH 1145 ELIGIBLE HOLDER TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR THE ESCROW ACCOUNT IN ACCORDANCE WITH THE TERMS OF THE BACKSTOP

25 Case Document Filed in TXSB on 05/29/17 Page 25 of 45 AGREEMENT) BY THE BACKSTOP FUNDING DEADLINE, ANY TERMS CAPITALIZED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANING AS SET FORTH IN THE PLAN OR THE 1145 RIGHTS OFFERING PROCEDURES. PLEASE LEAVE SUFFICIENT TIME FOR YOUR MASTER 1145 SUBSCRIPTION FORM TO REACH THE RIGHTS OFFERING SUBSCRIPTION AGENT AND BE PROCESSED. PLEASE CONSULT THE PLAN AND THE 1145 RIGHTS OFFERING PROCEDURES FOR ADDITIONAL INFORMATION WITH RESPECT TO THIS MASTER 1145 SUBSCRIPTION FORM. IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT THE RIGHTS OFFERING SUBSCRIPTION AGENT VIA TO (PLEASE REFERENCE VANGUARD SUBSCRIPTION IN THE SUBJECT LINE), OR AT THE FOLLOWING PHONE NUMBER: (844) Item 1. Certification of Authority to Subscribe. The undersigned certifies that as of the Record Date it (please check the applicable box): Is a broker, bank or other nominee for the beneficial holders of the Notes listed in Item 2 below, and is the registered holder of such Notes, or Is acting under a power of attorney and/or agency (a copy of which will be provided upon request) granted by the broker, bank, or other nominee that is the registered holder of the Notes listed in Item 2 below.

26 Case Document Filed in TXSB on 05/29/17 Page 26 of 45 Item 2a. Notes Beneficial Holder Information for NON-BACKSTOP PARTIES ONLY. The undersigned certifies that as of the Record Date the information provided below (including any information provided on additional sheets attached hereto) is a true and accurate schedule of the beneficial holders of the Notes, as identified by their respective account numbers, that have delivered duly completed 1145 Beneficial Holder Subscription Forms to the undersigned, which forms are attached hereto. (Please complete the information requested below. Attach additional sheets if necessary.) Total Principal Amount of Notes held as of Record Date Number of 1145 Rights Offering Equity Beneficial Holder Elects to Purchase* Name of Beneficial Owner 1. $15 2. $15 3. $15 4. $15 5. $15 6. $15 7. $15 8. $15 9. $ $15 TOTALS $15 Price per share Total amount (Purchase Price) * Rate = $ principal amount X = Maximum number of Rights (round down to nearest whole number) Total amount must be paid by wire transfer ONLY of immediately available funds to the Rights Offering Subscription Agent by the Subscription Expiration Deadline, in accordance with the directions below.

27 Case Document Filed in TXSB on 05/29/17 Page 27 of 45 Item 2b. Notes Beneficial Holder Information. BACKSTOP PARTIES ONLY. The undersigned certifies that as of the Record Date the information provided below (including any information provided on additional sheets attached hereto) is a true and accurate schedule of the beneficial holders of the Notes THAT ARE BACKSTOP PARTIES, as identified by their respective account numbers, that have delivered duly completed 1145 Beneficial Holder Subscription Forms to the undersigned, which forms are attached hereto. (Please complete the information requested below. Attach additional sheets if necessary.) Name of Backstop Party Beneficial Owner Total Principal Amount of Notes held as of Record Date Number of 1145 Rights Offering Equity Beneficial Holder Elects to Purchase* 1. $15 2. $15 3. $15 4. $15 5. $15 6. $15 7. $15 8. $15 9. $ $15 TOTALS $15 Price per share Total amount (Purchase Price) * Rate = $ principal amount X = Maximum number of Rights (round down to nearest whole number) UNLESS DIRECTED OTHERWISE BY A BACKSTOP PARTY, NO PAYMENTS NEED TO BE MADE BY ANY NOMINEE FOR RIGHTS EXERCISED BY ANY BACKSTOP PARTIES AS SUCH PARTIES WILL REMIT THEIR PAYMENTS DIRECTLY TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR AN ESCROW ACCOUNT (EXCEPT TO THE EXTENT OF ANY FUNDING PREVIOUSLY PROVIDED BY ANY SUCH 1145 ELIGIBLE HOLDER TO THE RIGHTS OFFERING SUBSCRIPTION AGENT OR THE ESCROW ACCOUNT IN ACCORDANCE WITH THE TERMS OF THE BACKSTOP AGREEMENT).