Form 8-K LRR Energy, L.P. For: Oct 05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 5, 2015

 

LRR Energy, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware	001-35344	90-0708431
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification No.)

  

5847 San Felipe, Suite 3000 Houston, Texas 77057

(Address of principal executive offices)

 

Registrant’s Telephone Number, including Area Code: (832) 327-2255

 

Heritage Plaza

1111 Bagby Street, Suite 4600

Houston, Texas 77002
(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Termination and Continuing Obligations Agreement

 

Concurrently with the closing of the merger described in Item 2.01 below, LRR Energy, L.P., a Delaware limited partnership (the “Partnership”), entered into a Termination and Continuing Obligations Agreement (the “Termination Agreement”), dated as of October 5, 2015, by and among Vanguard Natural Resources, LLC, a Delaware limited liability company (“Vanguard”), Lime Rock Management LP, a Delaware limited partnership (“Management”), Lime Rock Resources A, L.P., a Delaware limited partnership (“LRR A”), Lime Rock Resources B, L.P., a Delaware limited partnership (“LRR B”), Lime Rock Resources C, L.P., a Delaware limited partnership (“LRR C” and, together with LRR A and LRR B, the “Fund I Partnerships”), LRR GP, LLC, a Delaware limited liability company and the ultimate general partner of each of the Fund I Partnerships (“LRR GP”), the Partnership, LRE GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “General Partner”), and LRE Operating, LLC, a Delaware limited liability company and wholly owned subsidiary of the Partnership (“OLLC”). Pursuant to the Termination Agreement, (i) that certain Omnibus Agreement, entered into, and effective as of, November 16, 2011 (the “Omnibus Agreement”), by and among the Partnership, the General Partner, OLLC, the Fund I Partnerships, LRR GP and Management, was terminated and (ii) the Fund I Partnerships, severally and in proportion to each entity’s Property Contributor Percentage (as defined in the Omnibus Agreement), agreed to indemnify the Partnership, the General Partner, OLLC and all of their respective subsidiaries from and against any losses arising out of any federal, state or local income tax liabilities attributable to the ownership or operation of the MLP Assets (as defined in the Omnibus Agreement) prior to the closing of the Partnership’s initial public offering. The indemnification obligations of the Fund I Partnerships under the Termination Agreement will survive until the first anniversary of the closing date of the transactions contemplated by the Merger Agreement (defined below).

 

The description of the Termination Agreement in this Item 1.01 is qualified in its entirety by reference to the full text of the Termination Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

 

Item 1.02 Termination of a Material Definitive Agreement.

 

Pursuant to that certain Voting and Support Agreement dated as of April 20, 2015, by and among Vanguard, the Fund I Partnerships, the Partnership, the General Partner, Management, Lime Rock Resources II-A, L.P., a Delaware limited partnership (“LRR II-A”), and Lime Rock Resources II-C, L.P., a Delaware limited partnership (“LRR II-C”), concurrently with the closing of the merger described in Item 2.01 below, the following agreements were terminated by the parties thereto:

 

·

Purchase and Sale Agreement dated March 18, 2013 between LRR II-A and LRR II-C, as seller, and the Partnership and OLLC, as purchaser;

 

·

Stakeholders’ Agreement, dated effective as of May 5, 2011, by and among the Partnership, the General Partner, Lime Rock Resources GP, L.P., the Fund I Partnerships, Management, Lime Rock Resources GP II, L.P., LRR II-A and LRR II-C;

 

·

Services Agreement, dated as of November 16, 2011, by and among Management, Lime Rock Resources Operating Company, Inc., the General Partner, the Partnership and OLLC;

 

 

 

·

Amended and Restated Purchase, Sale, Contribution, Conveyance and Assumption Agreement, dated effective as of November 16, 2011, by and among the Fund I Partnerships, the General Partner, the Partnership and OLLC;

 

·

LRE GP, LLC Long-Term Incentive Plan, adopted as of November 10, 2011; and

 

·

Purchase and Sale Agreement, dated as of May 2, 2012, between the Fund I Partnerships, as seller, and the Partnership and OLLC, as purchaser.

 

In addition, in connection with the consummation of the merger described in Item 2.01 below, on October 5, 2015, all outstanding obligations in respect of principal, interest, and fees under (i) that certain Credit Agreement, dated as of July 22, 2011 (the “Credit Agreement”), by and among OLLC, as borrower, the Partnership, as parent guarantor, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and BNP Paribas, Citibank, N.A. and Royal Bank of Canada, as co-documentation agents, as amended, and (ii) that certain Second Lien Credit Agreement (the “Second Lien Credit Agreement”), dated as of June 28, 2012, by and among OLLC, as borrower, the Partnership, as parent guarantor, the lenders from time to time party thereto and Wells Fargo Energy Capital, Inc., as administrative agent, as amended, were repaid and the Credit Agreement and the Second Lien Credit Agreement were terminated.

 

The information included under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02 in its entirety.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

On October 5, 2015 (the “Closing Date”), the Partnership and Vanguard completed Vanguard’s acquisition of the Partnership. Pursuant to a Purchase Agreement and Plan of Merger, dated as of April 20, 2015 (the “Merger Agreement”), by and among Vanguard, Lighthouse Merger Sub, LLC, a Delaware limited liability company and a wholly owned indirect subsidiary of Vanguard (“Merger Sub”), Management, the Fund I Partnerships, LRR II-A, LRR II-C, the Partnership and the General Partner, the Partnership agreed to merge with and into Merger Sub with the Partnership continuing as the surviving entity and as a wholly owned subsidiary of Vanguard (the “Merger”). The Partnership completed the Merger following approval of the Merger Agreement by a majority of the Partnership’s common unitholders on October 5, 2015.

 

At the effective time of the Merger (the “Effective Time”), each common unit representing limited partner interests in the Partnership (collectively, the “Common Units”) issued and outstanding immediately prior to the Effective Time was converted into the right to receive 0.550 common units representing limited liability company interests in Vanguard (“Vanguard Units” and such consideration, the “Unit Consideration”) or, in the case of fractional Vanguard Units, cash (without interest and rounded up to the nearest whole cent) in an amount equal to the product of (i) such fractional part of a Vanguard Unit multiplied by (ii) the average closing price for a Vanguard Unit as reported on the NASDAQ Global Select Market (the “NASDAQ”) for the ten consecutive full trading days ending at the close of trading on the full trading day immediately preceding the Closing Date. Each restricted Common Unit that was outstanding pursuant to the Partnership’s long-term incentive plan vested immediately prior to the Effective Time and was converted into the right to receive the Unit Consideration. In addition, on the Closing Date, Vanguard issued and delivered to the Fund I Partnerships, Management, LRR II-A and LRR II-C 12,320 Vanguard Units in exchange for all of the limited liability company interests in the General Partner. Immediately prior to the Effective Time, Vanguard assigned its right to purchase all of the limited liability company interests in the General Partner to its wholly owned subsidiary, Vanguard Operating, LLC, a Delaware limited liability company (“Vanguard Operating).

 

 

The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on April 22, 2015 and incorporated herein by reference.

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

Following the completion of the Merger, the Partnership (i) notified the New York Stock Exchange (the “NYSE”) on October 5, 2015 that the Merger was effected and that all outstanding Common Units were cancelled and converted into the right to receive 0.550 Vanguard Units and (ii) requested that the NYSE file a notification of removal from listing on Form 25 with the Securities and Exchange Commission with respect to the Common Units. The trading of the Common Units on the NYSE will be suspended from trading before the opening of the market on October 6, 2015.

 

Item 3.03 Material Modification to Rights of Security Holders.

 

As set forth under Item 2.01 of this Current Report on Form 8-K, upon effectiveness of the Merger, each issued and outstanding Common Unit was converted into the right to receive the Unit Consideration.

 

The information included under Items 2.01, 3.01 and 5.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03 in its entirety.

 

Item 5.01 Changes in Control of the Registrant.

 

A change of control of the Partnership occurred on October 5, 2015 upon the filing of the certificate of merger with the Secretary of State of the State of Delaware, at which time Merger Sub merged with and into the Partnership, with the Partnership continuing to exist as a Delaware limited partnership.

 

As a result of the Merger, the Partnership became a wholly owned subsidiary of Vanguard. At the Effective Time, by virtue of the Merger, Vanguard was admitted as the sole limited partner of the Partnership and now holds all Common Units. The general partner interest in the Partnership outstanding immediately prior to the Effective Time remains unchanged, and the General Partner, as the holder of such general partner interest, continues to be the sole general partner of the Partnership.

 

The information included under Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01 in its entirety.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

At the Effective Time of the Merger, each member of the board of directors of the General Partner (the “Board”) resigned from the Board and ceased to be directors of the General Partner. These directors are: Eric Mullins, Charles W. Adcock, John A. Bailey, Jonathan Carroll, Jonathan C. Farber and Townes Pressler Jr. These resignations were not a result of any disagreements between the General Partner and the directors on any matter relating to the General Partner’s operations, policies or practices.

 

 

At the Effective Time of the Merger, each of the following officers of the General Partner resigned and ceased to be an officer of the General Partner: Eric Mullins, Co-Chief Executive Officer, Charles W. Adcock, Co-Chief Executive Officer, Christopher A. Butta, Senior Vice President of Engineering and Chief Engineer, Jaime R. Casas, Vice President and Chief Financial Officer, and C. Timothy Miller, Executive Vice President and Chief Operating Officer.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

Following the closing of the Merger, on October 5, 2015, Vanguard Operating entered into the Second Amended and Restated Limited Liability Company Agreement of the General Partner (the “Second Amended LLC Agreement”). The Second Amended LLC agreement appoints new directors and officers of the General Partner.

 

Immediately following the execution of the Second Amended LLC Agreement by Vanguard Operating, the Partnership merged with and into Vanguard Operating and the General Partner merged with and into Vanguard Natural Gas, LLC, a Kentucky limited liability company and wholly owned subsidiary of Vanguard. Following these transactions, the Partnership and the General Partner ceased to exist.

 

The description of the Second Amended LLC Agreement in this Item 5.03 is qualified in its entirety by reference to the full text of the Second Amended LLC Agreement, which is filed as Exhibit 3.1 hereto and incorporated herein by reference.

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

 

At the Special Meeting of Unitholders (the “Special Meeting”) of the Partnership held on October 5, 2015, Partnership unitholders approved the Merger Agreement. The vote tabulation is set forth below:

 

For			Against			Abstain			Broker Non-Votes
16,661,192			398,388			118,703			-

 

Partnership unitholders also approved at the Special Meeting, on an advisory, non-binding basis, the merger-related compensation payments that may become payable to certain of the Partnership’s named executive officers in connection with the Merger. The vote tabulation is set forth below:

 

For			Against			Abstain			Broker Non-Votes
14,936,182			1,960,765			281,336			-

 

In connection with the Special Meeting, the Partnership also solicited proxies with respect to a proposal to transact such other business as may properly come before the Special Meeting and any adjournment or postponement thereof. The proposal, which was unnecessary in light of no other business properly coming before the Special Meeting and the approval of the Merger Agreement by the Partnership unitholders as indicated above, was not submitted to the Partnership unitholders for approval at the Special Meeting.

 

 

Item 9.01         Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
2.1		Purchase Agreement and Plan of Merger, dated as of April 20, 2015, by and among Vanguard Natural Resources, LLC, Lighthouse Merger Sub, LLC, Lime Rock Management LP, Lime Rock Resources A, L.P., Lime Rock Resources B, L.P., Lime Rock Resources C, L.P., Lime Rock Resources II-A, L.P., Lime Rock Resources II-C, L.P., LRR Energy, L.P. and LRE GP, LLC (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K (SEC File No. 001-35344), filed on April 22, 2015).
3.1		Second Amended and Restated Limited Liability Company Agreement of LRE GP, LLC dated as of October 5, 2015.
10.1		Termination and Continuing Obligations Agreement, dated as of October 5, 2015, by and among Vanguard Natural Resources, LLC, Lime Rock Management LP, Lime Rock Resources A, L.P., Lime Rock Resources B, L.P., Lime Rock Resources C, L.P., LRR GP, LLC, LRR Energy, L.P. , LRE GP, LLC and LRE Operating, LLC.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

LRR ENERGY, L.P.

 

	By:	LRE GP, LLC,
		its general partner
Dated: October 5, 2015	By:	/s/ Richard A. Robert
	Name:	Richard A. Robert
	Title:	Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

 

 

Exhibit Index

 

Exhibit No.		Description
2.1		Purchase Agreement and Plan of Merger, dated as of April 20, 2015, by and among Vanguard Natural Resources, LLC, Lighthouse Merger Sub, LLC, Lime Rock Management LP, Lime Rock Resources A, L.P., Lime Rock Resources B, L.P., Lime Rock Resources C, L.P., Lime Rock Resources II-A, L.P., Lime Rock Resources II-C, L.P., LRR Energy, L.P. and LRE GP, LLC (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K (SEC File No. 001-35344), filed on April 22, 2015).
3.1		Second Amended and Restated Limited Liability Company Agreement of LRE GP, LLC dated as of October 5, 2015.
10.1		Termination and Continuing Obligations Agreement, dated as of October 5, 2015, by and among Vanguard Natural Resources, LLC, Lime Rock Management LP, Lime Rock Resources A, L.P., Lime Rock Resources B, L.P., Lime Rock Resources C, L.P., LRR GP, LLC, LRR Energy, L.P., LRE GP, LLC and LRE Operating, LLC.

 

 

 

 

 

Exhibit 3.1

LRE GP, LLC

 

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT

 

OCTOBER 5, 2015

 

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF LRE GP, LLC (this “Agreement”), dated October 5, 2015 (the “Effective Time”) is adopted, executed and agreed to by Vanguard Operating, LLC, a Delaware limited liability company (“VNR Operating” or the “Sole Member”), in connection with the ownership and management of LRE GP, LLC (the “Company”), pursuant to the provisions of the Delaware Limited Liability Company Act as amended from time to time (the “Act”).

 

RECITALS

 

WHEREAS, the Company was formed as a Delaware limited liability company pursuant to the Act by the filing of that certain Certificate of Formation (the “Certificate”) with the Secretary of State of the State of Delaware on April 28, 2011;

 

WHEREAS, the Members (as defined in the A&R LLC Agreement) entered into that certain Amended and Restated Limited Liability Company Agreement of the Company on November 16, 2011 (the “A&R LLC Agreement”);

 

WHEREAS, pursuant to that certain Purchase Agreement and Plan of Merger (the “Merger Agreement”) by and among the Members, Vanguard Natural Resources, LLC (“Vanguard”) and certain other parties, dated as of April 20, 2015, the Members have sold all of their limited liability company interests to VNR Operating;

 

WHEREAS, upon consummation of the transactions contemplated by the Merger Agreement on October 5, 2015 (the “Closing”), the Company became a wholly owned indirect subsidiary of Vanguard and VNR Operating became the Sole Member of the Company;

 

WHEREAS, pursuant to Section 11.4 of the A&R LLC Agreement, the A&R LLC Agreement may be amended or restated only by a written instrument executed by the Class A Member(s) holding at least 66 ^2/3% of the Class A Membership Interests (as defined in the A&R LLC Agreement) of the Company; and

 

WHEREAS, as a result of the Closing, VNR Operating owns 100% of the Class A Membership Interests of the Company.

 

  

NOW, THEREFORE, in consideration of the premises and the covenants, agreements and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend and restate the A&R LLC Agreement as follows:

 

AGREEMENT

 

Formation. The affairs of the Company and the conduct of its business will be governed by the terms and be subject to the conditions set forth in this Agreement, as amended from time to time. This Agreement amends and restates in its entirety and supersedes the A&R LLC Agreement, which shall have no further force or effect as of the Effective Time. The Sole Member is hereby authorized and directed to file any and all necessary amendments to the Certificate in the office of the Secretary of State of the State of Delaware and any other documents as may be required or appropriate under the Act or the laws of any jurisdiction in which the Company may conduct business or own property.

 

Members. The Sole Member shall be the only member of the Company; provided, however, that the Sole Member may admit new members in its sole discretion.

 

Name. The name of the limited liability company is LRE GP, LLC. The Company's business may be conducted under any other name or names deemed necessary or appropriate by the Sole Member in its discretion. The words “Limited Liability Company,” “L.L.C.” or “LLC” or similar words or letters shall be included in the Company's name as necessary for the purpose of complying with the laws of any jurisdiction that so requires. The Sole Member in its discretion may change the name of the Company at any time and from time to time.

 

Registered Office; Registered Agent. The name of the Company’s registered agent for service of process shall be CT Corporation, and the address of the Company’s registered agent and the address of the Company’s registered office in the State of Delaware shall be 1209 Orange Street, Wilmington, DE 19801. The Sole Member may change the registered agent and the registered office of the Company at any time and from time to time. The Company may maintain offices at any other place or places within or outside the State of Delaware as the Sole Member deems necessary or appropriate.

 

Purpose. The purpose of the Company shall be to engage in any lawful business purpose or activity in which a limited liability company formed under the Act may engage or participate. The Company shall have any and all powers necessary or desirable to carry out the purpose and business of the Company to the extent the powers may be legally exercised by limited liability companies under the Act. The Company shall carry out the foregoing activities pursuant to the Certificate of Formation and this Agreement.

 

Contributions. The Sole Member is deemed admitted as a member of the Company upon its execution and delivery of this Agreement. The Sole Member may, but is not required to, make any additional capital contributions to the Company. Without creating any rights in favor of any third party, the Sole Member may, from time to time, make additional contributions of cash or property to the capital of the Company, but shall have no obligation to do so.

 

  

Units. Ownership in the Company shall be represented by membership units. Such units shall not be represented by written certificates unless otherwise approved by the Sole Member. As of the date of this Agreement, the Sole Member owns 100% of each of the Class A Membership Interests, Class B Membership Interests and Class C Membership Interests (each as defined in the A&R LLC Agreement and collectively the “Units”), which Units represent all the issued and outstanding Units of the Company.

 

Distributions. The Sole Member shall be entitled (i) to receive all distributions (including, without limitation, liquidating distributions) made by the Company, and (ii) to enjoy all other rights, benefits and interests in the Company. The Sole Member may determine the timing and the amounts of distributions.

 

Management. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Sole Member, which shall make all decisions and take all actions for the Company. Notwithstanding the foregoing, the Sole Member may designate one or more persons, who may or may not be members of the Company, as officers (“Officers”) of the Company.

 

Officers; Appointment; Powers. The Sole Member may, from time to time as it deems advisable, appoint officers of the Company and assign in writing titles (including, without limitation, President, Chief Executive Officer, Vice President, Secretary and Treasurer) to any such person. Officers are not “Managers” as that term is used in the Act. Unless the Sole Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the General Corporation Law of the State of Delaware (the “DGCL”) the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this paragraph may be revoked at any time by the Sole Member. Any number of offices may be held by the same person. Each Officer shall hold office until his or her successor is elected and qualified or until such Officer’s earlier death, resignation or removal. Any Officer may resign at any time upon written notice to the Company. The salaries of all Officers and agents of the Company shall be fixed by or in the manner prescribed by the Sole Member. Any Officer elected or appointed by the Sole Member may be removed at any time, with or without cause, by the Sole Member. Any vacancy occurring in any office of the Company shall be filled by the Sole Member. The Officers of the Company as of the Effective Time are as follows:

 

  

Officer		Position
Scott W. Smith		Chief Executive Officer
Richard A. Robert		Executive Vice President, Chief Financial
		Officer and Corporate Secretary

 

Officers as Agents. The Officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Sole Member not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business, and the actions of the Officers taken in accordance with such powers shall bind the Company.

 

Officers; Fiduciary Duty. Except to the extent otherwise provided herein, each Officer, when appointed, shall have a fiduciary duty of loyalty and care similar to that of officers of business corporations organized under the DGCL.

 

Liability. The Sole Member and the Officers, if any, shall not have any liability for the obligations, debts or liabilities of the Company except as provided in the Act.

 

Indemnification.

 

(a)        To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, each Indemnitee (as defined prior to the Effective Time in the A&R LLC Agreement) shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, penalties, interest, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of such person’s status as an Indemnitee; provided, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this section, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to that specified above. Any indemnification pursuant to this section shall be made only out of assets of the Company, it being agreed that the Sole Member shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Company to enable it to effectuate such indemnification.

 

(i)        To the fullest extent permitted by law, expenses (including reasonable legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to clause (a) of this section in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this section.

 

  

(ii)        The Company shall, to the fullest extent permitted under the Act, pay or reimburse expenses incurred by an Indemnitee in connection with the Indemnitee’s appearance as a witness or other participation in a proceeding involving or affecting the Company at a time when the Indemnitee is not a named defendant or respondent in the proceeding.

 

(b)        The indemnification provided by this section shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

 

(c)        The Company may purchase and maintain insurance, on behalf of the members of the Board of Directors serving the Company immediately prior to the Effective Time, the officers serving immediately prior to the Effective Time and such other Persons (as defined in the A&R LLC Agreement) as the Sole Member shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Company’s activities or such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

 

(d)        For purposes of this section, the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the Indemnitee of such Indemnitee’s duties to the Company also imposes duties on, or otherwise involves services by, the Indemnitee to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to Applicable Law shall constitute “fines” within the meaning of clause (a) of this section; and action taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of such Indemnitee’s duties for a purpose reasonably believed by such Indemnitee to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is in, or not opposed to, the best interests of the Company.

 

(e)        An Indemnitee shall not be denied indemnification in whole or in part under this section because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

 

 

 

(f)        The provisions of this section are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

 

(g)        No amendment, modification or repeal of this section or any provision hereof shall in any manner terminate, reduce or impair either the right of any past, present or future Indemnitee to be indemnified by the Company or the obligation of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this section as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted, provided such Person became an Indemnitee hereunder prior to such amendment, modification or repeal.

 

(h)        Any act or omission performed or omitted by an Indemnitee on advice of legal counsel or an independent consultant who has been employed or retained by the Company shall be presumed to have been performed or omitted in good faith without gross negligence or willful misconduct.

 

(i)        THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION ARE INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF INDEMNIFYING AND EXCULPATING THE INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

 

Dissolution. The Company shall dissolve and its affairs shall be wound up upon (i) the consent of the Sole Member or (ii) the entry of a decree of judicial dissolution under the Act. No other event will cause the Company to dissolve.

 

Books and Records. The Sole Member shall keep or cause to be kept complete and accurate books of account and records with respect to the Company’s business. The books of the Company shall at all times be maintained by the Sole Member. The Company’s books of account shall be kept using the method of accounting determined by the Sole Member. The Company’s independent auditors, if required as determined by the Sole Member, shall be an independent public accounting firm selected by the Sole Member.

 

Severability of Provisions. Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

 

Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company.

 

  

Tax Classification. It is intended that the Company be disregarded as an entity separate from the Sole Member for U.S. federal tax purposes; provided that the Sole Member may elect to change this classification pursuant to Treasury Regulation § 301.7701.3.

 

Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO ITS CONFLICT-OF-LAWS PRINCIPLES), ALL RIGHTS AND REMEDIES BEING GOVERNED BY SAID LAWS.

 

Amendments. This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Sole Member.

 

Entire Agreement. This Agreement constitutes the entire agreement of the Sole Member with respect to the subject matter hereof.

 

[Signature page follows]

 

  

IN WITNESS WHEREOF, the Sole Member has adopted, executed and agreed to this Agreement effective as of the date first above written.

 

	SOLE MEMBER:
	VANGUARD OPERATING, LLC
	By:	Vanguard Natural Gas, LLC, its sole member
		By: Vanguard Natural Resources, LLC, its sole manager
	By:	/s/ Richard A. Robert
	Name:	Richard A. Robert
	Title:	Executive Vice President, Chief Financial Officer and Corporate Secretary

 

 

Exhibit 10.1

 

TERMINATION AND CONTINUING OBLIGATIONS AGREEMENT

 

This TERMINATION AND CONTINUING OBLIGATIONS AGREEMENT, dated October 5, 2015 (this “Agreement”), is entered into by and among Vanguard Natural Resources, LLC, a Delaware limited liability company (“Parent”), Lime Rock Management LP, a Delaware limited partnership (“Management”), Lime Rock Resources A, L.P., a Delaware limited partnership (“LRR A”), Lime Rock Resources B, L.P., a Delaware limited partnership (“LRR B”), Lime Rock Resources C, L.P., a Delaware limited partnership (“LRR C” and, together with LRR A and LRR B, the “Fund Entities,” and each referred to individually as a “Fund Entity”), LRR GP, LLC, a Delaware limited liability company and the ultimate general partner of each Fund Entity (the “Fund General Partner”), LRR Energy, L.P., a Delaware limited partnership (the “Partnership”), LRE GP, LLC, a Delaware limited liability company (the “Partnership GP”), and LRE Operating, LLC, a Delaware limited liability company and wholly owned subsidiary of the Partnership (“OLLC”). The parties to this Agreement are sometimes referred to herein collectively as the “parties,” and individually as a “party.” Capitalized terms used herein without definition shall have the respective meanings specified in the Merger Agreement (as defined below).

 

WHEREAS, this Agreement is made in connection with the Purchase Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 20, 2015, by and among Parent, Lighthouse Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (“Merger Sub”), the Fund Entities, Lime Rock Resources II-A, L.P., a Delaware limited partnership, Lime Rock Resources II-C, L.P., a Delaware limited partnership, Management, the Partnership and the Partnership GP, pursuant to which, among other things, on the date hereof (i) Parent will purchase all of the outstanding membership interests in Partnership GP, and (ii) Merger Sub will be merged with and into the Partnership, with the Partnership surviving as a wholly owned, directly and indirectly, Subsidiary of Parent, all upon the terms and subject to the conditions set forth in the Merger Agreement (the “Merger”);

 

WHEREAS, the parties hereto have determined that, in connection with the Merger, it is advisable and in each of their respective best interests to terminate the Omnibus Agreement, entered into, and effective as of, November 16, 2011, by and among the Partnership, the Partnership GP, OLLC, the Fund Entities, the Fund General Partner and Management (the “LRR Omnibus Agreement”), but to retain the Fund Entities’ certain surviving indemnification obligations, by entering into this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto agree as follows:

 

 

ARTICLE I

TERMINATION OF LRR OMNIBUS AGREEMENT

 

Section 1.1   Termination.  Subject to the provisions of Article II, the parties hereto agree that, effective as of the date hereof, the LRR Omnibus Agreement shall be terminated and that the parties thereto and any other Person that could be bound by the LRR Omnibus Agreement are released from all of their respective duties, obligations and liabilities arising thereunder and are no longer entitled to any of their respective rights or benefits to the extent arising solely thereunder, whether arising before or after the date hereof.

 

ARTICLE II

PAYMENT; CONTINUING INDEMNIFICATION

 

Section 2.1   Indemnification.  Notwithstanding anything to the contrary in Article I, and subject to the provisions of Section 2.2 and Section 2.3, effective as of the date hereof, each Fund Entity, severally, in proportion to its respective Property Contributor Percentage (as defined in the LRR Omnibus Agreement), agrees to indemnify, defend and hold harmless the Partnership, the Partnership GP, OLLC and all of their respective Subsidiaries (the “Partnership Group”) from and against any and all losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, any court costs and reasonable attorneys’ and experts’ fees) of any and every kind and character suffered or incurred by the Partnership Group by reason of or arising out of any federal, state or local income tax liabilities attributable to the ownership or operation of the MLP Assets (as defined in the LRR Omnibus Agreement) prior to the closing of the Partnership’s initial public offering (the “Partnership IPO Closing Date”), including any such income tax liabilities that may result from the consummation of the formation transactions for any member of the Partnership Group occurring on or prior to the Partnership IPO Closing Date.

 

Section 2.2   Limitations Regarding Indemnification.

 

(a)   The indemnification obligations of the Fund Entities set forth in Section 2.1 shall survive until the first anniversary of the Closing Date (as defined in the Merger Agreement); provided, however, that any such indemnification obligation pursuant to Section 2.1 shall remain in full force and effect thereafter only with respect to any bona fide claim made thereunder prior to such expiration and then only for such period as may be necessary for the resolution thereof.

 

(b)   No claims may be made against the Fund Entities for indemnification pursuant to Section 2.1 unless the aggregate dollar amount of the Material Losses suffered or incurred by the Partnership Group exceed $500,000; thereafter, each Fund Entity shall be liable, severally, in proportion to its respective Property Contributor Percentage, to the extent and only to the extent that such claims exceed $500,000 in the aggregate.  The term “Material Losses” means only each of those Losses described in Section 2.1 that exceeds $50,000.

 

 

Section 2.3   Indemnification Procedures.

 

(a)   Each Party seeking indemnification (each, an “Indemnified Party”) pursuant to this Article II agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification pursuant to this Article II, it will provide notice thereof in writing to the Parties from whom indemnification is sought pursuant to this Article II (each, an “Indemnifying Party”) specifying the nature of and specific basis for such claim; provided, however, that no Indemnified Party shall submit claims more frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to the expiration of the applicable indemnity coverage under this Agreement); provided further, that failure to timely provide such notice shall not affect the right of the Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is materially prejudiced by such delay or omission.

 

(b)   The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification set forth in this Article II, including, without limitation, the selection of counsel (provided that such counsel shall be reasonably acceptable to the Indemnified Parties), determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (which consent shall not be unreasonably withheld, conditioned or delayed) of the Indemnified Parties unless it includes a full release of the Indemnified Parties and their respective Subsidiaries from such matter or issues, as the case may be.

 

(c)   The Indemnified Parties agree to cooperate fully with the Indemnifying Parties with respect to all aspects of the defense of any claims covered by the indemnification set forth in this Article II, including, without limitation, the prompt furnishing to the Indemnifying Parties of any correspondence or other notice relating thereto that the Indemnified Parties may receive, permitting the names of the Indemnified Parties to be utilized in connection with such defense, the making available to the Indemnifying Parties of any files, records or other information of the Indemnified Parties that the Indemnifying Parties consider relevant to such defense and the making available to the Indemnifying Parties of any employees of the Indemnified Parties; provided, however, that in connection therewith the Indemnifying Parties agree to use commercially reasonable efforts to minimize the impact thereof on the operations of the Indemnified Parties and further agree to reasonably maintain the confidentiality of all files, records and other information furnished by the Indemnified Parties pursuant to this Section 2.3.  In no event shall the obligation of the Indemnified Parties to cooperate with the Indemnifying Parties as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Parties an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article II; provided, however, that the Indemnified Parties may, at their option, cost and expense, hire and pay for counsel in connection with any such defense.  The Indemnifying Parties agree to keep any such counsel hired by the Indemnified Parties reasonably informed as to the status of any such defense, but the Indemnifying Parties shall have the right to retain sole control over such defense.

 

 

(d)   In determining the amount of any Losses for which the Indemnified Parties are entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Parties, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Parties as a result of such claim and (ii) all amounts recovered by the Indemnified Parties under contractual indemnities from third parties.  The Indemnified Parties hereby agree to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities; provided, however, that the costs and expenses (including, without limitation, court costs and reasonable attorneys’ fees) of the Indemnified Parties in connection with such efforts shall be promptly reimbursed by the Indemnifying Parties.  To the extent that the Indemnifying Parties have made any indemnification payment hereunder in respect of a claim for which the Indemnified Parties have asserted a related claim for insurance proceeds or under a contractual indemnity, the Indemnifying Parties shall be subrogated to the rights of the Indemnified Parties to receive the proceeds of such insurance or contractual indemnity.

 

ARTICLE III
MISCELLANEOUS

 

Section 3.1   Expenses.  Each party shall bear its respective expenses, costs and fees (including attorneys’, auditors’ and financing fees, if any) in connection with the preparation, execution and delivery of this Agreement and compliance herewith, whether or not the Merger and the other transactions contemplated by the Merger Agreement are effected.

 

Section 3.2   Notices.  All notices and other communications hereunder will be in writing and deemed given if delivered personally or by facsimile transmission, or mailed by a nationally recognized overnight courier or registered or certified mail (return receipt requested), postage prepaid, to the parties hereto at the following addresses (or at such other address for a party as specified by like notice; provided, however, that notices of a change of address will be effective only upon receipt thereof):

 

 

If to Parent, to:  
  
Vanguard Natural Resources, LLC  
5847 San Felipe, Suite 3000  
Houston, Texas 77057  
Attn:  Scott W. Smith, President and Chief Executive Officer  
Facsimile: (832) 327-2260

 

With a copy to (which does not constitute notice):

 

Paul Hastings LLP  
600 Travis Street, 58th Floor  
Houston, Texas 77002  
Attention:  James E. Vallee / Douglas V. Getten  
Facsimile: (713) 353-3100

 

If to any Unitholder or any GP Seller, to:

 

Heritage Plaza  
1111 Bagby Street, Suite 4600

Houston, Texas 77002  
Attention:  Eric Mullins

Facsimile: (713) 292-9560

 

With a copy to (which does not constitute notice):

 

274 Riverside Avenue

Westport, CT 06880

Attention: Kris Agarwal

Facsimile: (203) 293-2760

 

If to the Partnership or the Partnership GP, to:

 

Heritage Plaza  
1111 Bagby Street, Suite 4600

Houston, Texas 77002  
Attention:  Eric Mullins

Facsimile: (713) 292-9560

 

With a copy to (which does not constitute notice):

 

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Attention: Jon W. Daly / Henry Havre

Facsimile: (713) 238-7492

 

 

Section 3.3   Amendments; Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed (i) in the case of an amendment, by all of the parties hereto, and (ii) in the case of a waiver, by the party (or parties) against whom the waiver is to be effective.  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 3.4   Assignment.  No party to this Agreement may assign any of its rights or obligations under this Agreement, including by sale of stock, operation of law in connection with a merger or sale of substantially all the assets of such party, without the prior written consent of the other parties hereto; provided, however, that Parent may assign its rights and obligations under this Agreement without the consent of any other party to an Affiliate of Parent as of the date hereof, so long as Parent remains liable for its obligations hereunder.

 

Section 3.5   No Partnership, Agency, or Joint Venture.  This Agreement is intended to create, and creates, a contractual relationship and is not intended to create, and does not create, any agency, partnership, joint venture or any like relationship between the parties hereto.

 

Section 3.6   Entire Agreement.  This Agreement together with the Merger Agreement, Voting Agreement, Registration Rights Agreement and the Confidentiality Agreement constitute the entire agreement and understanding of the parties hereto with respect to the matters therein and supersede all prior agreements and understandings on such matters.

 

Section 3.7   No Third-Party Beneficiaries.  Subject to Section 3.4, the provisions of this Agreement are binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns, and no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors.

 

 

Section 3.8   Jurisdiction; Specific Performance; Waiver of Jury Trial.

 

(a)   The parties hereto submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such Court does not have subject matter jurisdiction, to the Superior Court of the State of Delaware or, if jurisdiction is vested exclusively in the Federal courts of the United States, the Federal courts of the United States sitting in the State of Delaware, and any appellate court from any such state or Federal court, and hereby irrevocably and unconditionally agree that all claims with respect to any such claim shall be heard and determined in such Delaware court or in such Federal court, as applicable.  The parties hereto agree that a final judgment in any such claim is conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.  Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any related matter in any Delaware state or Federal court located in the State of Delaware and the defense of an inconvenient forum to the maintenance of such claim in any such court.

 

(b)   The parties hereto agree that irreparable damage would occur and that the parties hereto would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and it is accordingly agreed that, to the fullest extent permitted by Law, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this Section 3.8 in the Delaware Court of Chancery or any state or federal court sitting in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity.  To the fullest extent permitted by Law, each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that (i) any party hereto has an adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity.  Each party hereto further agrees that no other party hereto shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3.8(b), and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

(c)   TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON, OR IN CONNECTION WITH, THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE.  ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 3.8(c) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

 

Section 3.9   Governing Law.  This Agreement is governed by and construed and enforced in accordance with the Laws of the State of Delaware, without giving effect to any conflicts of law principles that would result in the applicable of any Law other than the Law of the State of Delaware.

 

Section 3.10   Interpretation.  Unless expressly provided for elsewhere in this Agreement, this Agreement will be interpreted in accordance with the following provisions: (a) the words “this Agreement,” “herein,” “hereby,” “hereunder,” “hereof,” and other equivalent words refer to this Agreement as an entirety and not solely to the particular portion, article, section, subsection or other subdivision of this Agreement in which any such word is used; (b) examples are not to be construed to limit, expressly or by implication, the matter they illustrate; (c) the word “including” and its derivatives means “including without limitation” and is a term of illustration and not of limitation; (d) all definitions set forth herein are deemed applicable whether the words defined are used herein in the singular or in the plural and correlative forms of defined terms have corresponding meanings; (e) the word “or” is not exclusive, and has the inclusive meaning represented by the phrase “and/or”; (f) a defined term has its defined meaning throughout this Agreement and each exhibit and schedule to this Agreement, regardless of whether it appears before or after the place where it is defined; (g) all references to prices, values or monetary amounts refer to United States dollars; (h) wherever used herein, any pronoun or pronouns will be deemed to include both the singular and plural and to cover all genders; (i) this Agreement has been jointly prepared by the parties hereto, and this Agreement will not be construed against any Person as the principal draftsperson hereof or thereof and no consideration may be given to any fact or presumption that any party had a greater or lesser hand in drafting this Agreement; (j) the captions of the articles, sections or subsections appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section, or in any way affect this Agreement; (k) any references herein to a particular Section, Article or Exhibit means a Section or Article of, or an Exhibit to, this Agreement unless otherwise expressly stated herein; the Exhibit attached hereto is incorporated herein by reference and will be considered part of this Agreement; (l) unless otherwise specified herein, all accounting terms used herein will be interpreted, and all determinations with respect to accounting matters hereunder will be made, in accordance with GAAP, applied on a consistent basis; (m) all references to days mean calendar days unless otherwise provided; and (n) all references to time mean Houston, Texas time.

 

 

Section 3.11   Counterparts.  This Agreement may be executed in any number of counterparts, each of which is an original, and all of which, when taken together, constitute one Agreement.  Delivery of an executed signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., “pdf”) will be effective as delivery of a manually executed counterpart hereof.

 

Section 3.12   Severability.  Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective only to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date and year first written above.

 

PARENT:

 

	VANGUARD NATURAL RESOURCES, LLC
	By:	/s/ Scott W. Smith
	Name:	Scott W. Smith
	Title:	Chief Executive Officer and President

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date and year first written above.

 

PARTNERSHIP:

 

	LRR ENERGY, L.P.
	By:	LRE GP, LLC, its general partner
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

PARTNERSHIP GP:

 

	LRE GP, LLC
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

 

OLLC:

 

	LRE OPERATING, LLC
	By:	LRR Energy, L.P., its sole member
	By:	LRE GP, LLC, its general partner
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

 

FUND ENTITIES:

 

	LIME ROCK RESOURCES A, L.P.
	By:	Lime Rock Resources GP, L.P., its general partner
	By:	LRE GP, LLC, its general partner
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

 

	LIME ROCK RESOURCES B, L.P.
	By:	Lime Rock Resources GP, L.P., its general partner
	By:	LRE GP, LLC, its general partner
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

 

	LIME ROCK RESOURCES C, L.P.
	By:	Lime Rock Resources GP, L.P., its general partner
	By:	LRE GP, LLC, its general partner
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

 

 

FUND GENERAL PARTNER:

 

	LRR GP, LLC
	By:	/s/ Eric Mullins
	Name:	Eric Mullins
	Title:	Co-Chief Executive Officer

 

MANAGEMENT:

 

	LIME ROCK MANAGEMENT LP
	By:	Lime Rock Management GP, L.P., its general partner
	By:	/s/ Jonathan C. Farber
	Name:	Jonathan C. Farber
	Title:	Manager

 

 

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