EX-2.1 2 d200402dex21.htm EX-2.1 FORM OF MASTER CONTRIBUTION AGREEMENT
Exhibit 2.1
This MASTER CONTRIBUTION AGREEMENT (this “Agreement”), dated [●], 2016, is by and among WildHorse Resource Development Corporation, a Delaware corporation (the “Company”), WildHorse Resources II, LLC, a Delaware limited liability company (“XX XX”), Esquisto Resources II, LLC, a Delaware limited liability company (“EQ II”), WHE AcqCo., LLC, a Delaware limited liability company (“AcqCo.”), NGP XI US Holdings L.P., a Delaware limited partnership (“NGP XI”), WildHorse Investment Holdings, LLC, a Delaware limited liability company (“WH Investment”), Esquisto Investment Holdings, LLC, a Delaware limited liability company (“EQ Investment” and together with the NGP XI, WH Investment, EQ II, AcqCo. and XX XX, the “Company Parties” and each, individually, a “Company Party”), WHE AcqCo. Holdings, LLC, a Delaware limited liability company (“AcqCo. Holdings”), WHR Holdings, LLC, a Delaware limited liability company (“WH Holdings”), Esquisto Holdings, LLC, a Delaware limited liability company (“EQ Holdings” and together with AcqCo. Holdings and WH Holdings, the “Contributors” and each, individually, a “Contributor”), WildHorse Merger Sub, LLC, a Delaware limited liability company (“WH Merger Sub”), and Esquisto Merger Sub, LLC, a Delaware limited liability company (“EQ Merger Sub” and together with WH Merger Sub, the “Merger Subs” and each, individually, a “Merger Sub”). The Company Parties, the Contributors and the Merger Subs are sometimes referred to collectively herein as the “Parties” and each, individually, as a “Party.”
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ARTICLE 1
“Affiliate” means, with respect to any specified Person, a Person that directly or indirectly Controls or is Controlled by, or is under common Control with, such specified Person.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Control” (including the terms “Controls,” “Controlled by” and “under common Control with”) means the possession, direct or indirect, of the power to (a) direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise or (b) vote 10% or more of the securities having ordinary voting power for the election of directors, managers, general partners or other governing body of a Person.
“Contributed Interests” means 100% of the issued and outstanding XX XX membership interests, 100% of the issued and outstanding EQ II membership interests and 100% of the issued and outstanding AcqCo. membership interests owned by WH Holdings, EQ Holdings and AcqCo. Holdings, respectively, after giving effect to the transactions described in Section 2.1(c), Section 2.1(d) and Section 2.1(e), respectively.
“Governmental Authorities” means (a) the United States of America or any state or political subdivision thereof and (b) any court or any governmental or administrative department, commission, board, bureau, agency or arbitration tribunal of the United States of America or of any state or political subdivision thereof.
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“Person” means any natural person, corporation, company, partnership (general or limited), limited liability company, trust, joint venture, joint stock company, unincorporated organization, Governmental Authority or other entity or association.
“Underwriting Agreement” means the Form of Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement.
(a) Unless the context requires otherwise: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (ii) references to Articles and Sections refer to articles and sections of this Agreement; (iii) the terms “include,” “includes,” “including” and words of like import shall be deemed to be followed by the words “without limitation”; (iv) the terms “hereof,” “hereto,” “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement; (v) unless the context otherwise requires, the term “or” is not exclusive and shall have the inclusive meaning of “and/or”; (vi) defined terms herein will apply equally to both the singular and plural forms and derivative forms of defined terms will have correlative meanings; (vii) references to any law or statute shall include all rules and regulations promulgated thereunder, and references to any law or statute shall be construed as including any legal and statutory provisions consolidating, amending, succeeding or replacing the applicable law or statute; (viii) references to any Person include such Person’s successors and permitted assigns; and (ix) references to “days” are to calendar days unless otherwise indicated.
(b) The headings in this Agreement are for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision thereof.
(c) This Agreement shall be construed without regard to any presumption or other rule requiring construction against the Party that drafted or caused this Agreement to be drafted.
ARTICLE 2
(a) WH Merger Sub shall merge with and into XX XX, with XX XX surviving such merger as the surviving entity (the “WH Merger”), and each holder of membership interests in XX XX immediately prior to the WH Merger shall receive equivalent membership interests in WH Investment such that, following the WH Merger, XX XX is a wholly owned subsidiary of WH Investment and each holder of membership interests in XX XX immediately prior to the WH Merger is a holder of an equivalent membership interest in WH Investment;
(b) Simultaneously with the WH Merger, EQ Merger Sub shall merge with and into EQ II, with EQ II surviving such merger as the surviving entity (the “EQ Merger” and
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together with the WH Merger, the “Mergers”), and each holder of membership interests in EQ II immediately prior to the EQ Merger shall receive equivalent membership interests in EQ Investment such that, following the EQ Merger, EQ II is a wholly owned subsidiary of EQ Investment and each holder of membership interests in EQ II immediately prior to the EQ Merger is a holder of an equivalent membership interest in EQ Investment;
(c) Immediately following the WH Merger, WH Investment shall contribute, assign, transfer and deliver to WH Holdings 100% of the issued and outstanding membership interests in XX XX (the “WH Holdings Contribution”) such that, following the WH Holdings Contribution, XX XX is a wholly owned subsidiary of WH Holdings;
(d) Immediately following the EQ Merger, EQ Investment shall contribute, assign, transfer and deliver to EQ Holdings 100% of the issued and outstanding membership interests in EQ II (the “EQ Holdings Contribution”) such that, following the EQ Holdings Contribution, EQ II is a wholly owned subsidiary of EQ Holdings;
(e) Simultaneously with the EQ Holdings Contribution, NGP XI shall contribute, assign, transfer and deliver to AcqCo. Holdings 100% of the issued and outstanding membership interests in AcqCo. (the “AcqCo. Holdings Contribution”) such that, following the AcqCo. Holdings Contribution, AcqCo. is a wholly owned subsidiary of AcqCo. Holdings;
(f) Immediately following the WH Holdings Contribution, WH Holdings shall contribute, assign, transfer and deliver to the Company 100% of the issued and outstanding membership interests in XX XX and the Company shall issue to WH Holdings 21,200,084 shares of Common Stock in the Company (the “WH Company Contribution”);
(g) Immediately following the EQ Holdings Contribution, EQ Holdings shall contribute, assign, transfer and deliver to the Company 100% of the issued and outstanding membership interests in EQ II and the Company shall issue to EQ Holdings 38,755,330 shares of Common Stock in the Company (the “EQ Company Contribution”); and
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
With respect to each representation and warranty specifically regarding any Contributor, each Contributor severally and not jointly represents and warrants to each other Party as to itself, and with respect to each representation and warranty specifically regarding the Contributed Interests, each Contributor severally, as to its interest in the Contributed Interests, and not jointly represents and warrants to each other Party, as follows (with each such representation and warranty being made as of the date of this Agreement and immediately prior to the Initial Delivery Date):
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3.4 Accredited Investor; Restricted Securities. Such Contributor is an “accredited investor” as defined in the Securities Act of 1933, as amended (the “Securities Act”), and is acquiring shares of Common Stock for its own account for investment, and not with a view to any distribution, resale, subdivision or fractionalization thereof in violation of the Securities Act or any other applicable domestic or foreign securities law, and such Contributor does not have any present plan to enter into any contract, undertaking, agreement or arrangement for any such distribution, resale, subdivision or fractionalization. Such Contributor has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of this Agreement with the Company’s management. Such Contributor acknowledges and agrees that the Company shall place a legend in substantially the following form on certificates representing the shares of Common Stock to be received by such Contributor, if applicable, pursuant to this Agreement, other than any shares that are contemplated to be sold in the IPO:
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“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR UNDER APPLICABLE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES
Each of the Company Parties represents and warrants severally and not jointly to each other Party as follows (with each such representation and warranty being made as of the date of this Agreement and as of the Initial Delivery Date):
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failure to be qualified or in good standing, would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the use, ownership or operation of its assets or on its ability to perform its obligations hereunder or consummate the transactions contemplated hereby.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE MERGER SUBS
Each Merger Sub represents and warrants to each other Party as follows (with each such representation and warranty being made as of the date of this Agreement and as of the Initial Delivery Date):
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(a) Such Merger Sub was formed solely for the purpose of effecting the Mergers, and since its formation, such Merger Sub has not engaged in any activity other than the Mergers and related administrative activities.
(b) Other than obligations under this Agreement, such Merger Sub has no liabilities or obligations of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise.
(c) Such Merger Sub has no assets.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each other Party as follows (with each such representation and warranty being made as of the date of this Agreement and as of the Initial Delivery Date):
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“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR UNDER APPLICABLE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”
ARTICLE 7
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the IPO (collectively, the “Transactions”) as a transaction described in Section 351 of the Code. The U.S. federal income tax treatment of the Transactions described in the preceding sentence is referred to herein as the “Tax Treatment.” If any Party becomes aware of any audit, inquiry, litigation or other proceeding relevant to the Tax Treatment, such Party shall promptly notify the other Parties of such proceeding, and all Parties shall use reasonable efforts to cooperate with respect to such proceeding.
(a) Such Contributor does not have any current plan, intention, agreement, arrangement or understanding, and has not engaged in any material negotiations, related to:
(i) engaging in the Transactions, other than pursuant to this Agreement or any agreements referenced herein or in the Registration Statement,
(ii) selling, exchanging, hedging, constructively selling or otherwise disposing of the shares of Common Stock to be received by such Contributor in connection with the Contributions, except as contemplated by this Agreement and the Registration Statement,
(iii) acquiring or retaining any rights in any Contributed Interest,
(iv) allowing any Person other than such Contributor to exercise control over the voting of the shares of Common Stock to be received by such Contributor in connection with the Contributions, except with respect to WH Holdings, EQ Holdings and AcqCo. Holdings, the voting agreement among WH Holdings, EQ Holdings and AcqCo. Holdings (the “Voting Agreement”),
(v) placing any shares of Common Stock to be issued to such Contributor in escrow or the issuance of any shares of Common Stock after the completion of the Transactions under a conditional or contingent stock or similar arrangement,
(vi) creating, extinguishing or modifying any indebtedness between such Contributor and the Company as a result of the Transactions, or
(vii) the issuance of shares of Common Stock by the Company to such Contributor, other than solely for the Contributed Interests contributed by such Contributor to the Company in connection with the Contributions.
(b) Such Contributor does not have any current plan, intention, agreement, arrangement or understanding to request, and has not engaged in material negotiations with respect to, a release or waiver of any of the restrictions set forth in the Lock-Up Agreement (as defined below) with respect to such Contributor;
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(c) The aggregate fair market value of the Contributed Interests to be contributed by such Contributor to the Company in connection with the Contributions exceeds the sum of any liabilities that will be assumed or deemed to be assumed by the Company for U.S. federal income tax purposes with respect to such Contributed Interests, including any expenses paid by the Company on behalf of such Contributor in connection with the Transactions.
(d) Such Contributor is not under the jurisdiction of a court in a Title 11 or similar case (within the meaning of Section 368(a)(3)(A) of the Code).
(e) To such Contributor’s knowledge, the Transactions will occur pursuant to, and in accordance with, the terms of this Agreement and any agreements referenced herein or in the Registration Statement.
(f) To such Contributor’s knowledge, no direct or indirect member, partner or owner of such Contributor has any current plan, intention, agreement, arrangement or understanding to sell, exchange, hedge, constructively sell or otherwise dispose of its direct or indirect interests in such Contributor.
(a) To the Company’s knowledge, there is no agreement, arrangement or understanding relating to rights or obligations to vote its Common Stock, except the Voting Agreement.
(b) There is no current plan, intention, agreement, arrangement or understanding for: (i) the Company to issue any shares of Common Stock or other interests in its equity other than Common Stock issued pursuant to the Transactions and grants to its directors and employees; (ii) the Company to dispose of the Contributed Interests; (iii) the Company or any other Affiliate of the Company to redeem or otherwise reacquire any shares of Common Stock to be issued in connection with the Transactions; or (iv) the Company or, to the Company’s knowledge, any underwriter to release or waive any of the restrictions set forth in the Lock-Up Agreement.
(c) The Company has not engaged in any material negotiations with respect to any release or waiver of any of the restrictions set forth in the Lock-Up Agreement.
(d) To the Company’s knowledge, there is no current plan, intention, agreement, arrangement or understanding for any Person to exercise any stock rights, warrants or subscriptions with respect to Common Stock other than pursuant to the Transactions.
(e) The shares of Common Stock to be issued to WH Holdings, EQ Holdings and AcqCo. Holdings will be issued and paid in exchange for solely the Contributed Interests contributed by such Contributors to the Company in connection with the Contributions. None of
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the shares of Common Stock to be received by any Contributor will be separate consideration for services rendered or to be rendered to the Company or, to the Company’s knowledge, XX XX, EQ II or AcqCo., or allocable to any employment agreements to which the Company or, to the Company’s knowledge, XX XX, EQ II or AcqCo. is a party, and any compensation to be paid by the Company or, to the Company’s knowledge, XX XX, EQ II or AcqCo. to any Contributor was or will be for services actually rendered and was and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services.
(f) There is no indebtedness between any Contributor or the Company or, to the Company’s knowledge, XX XX, EQ II or AcqCo., and there will be no such indebtedness created in favor of any Contributor as a result of the Transactions.
(g) The Company has no stock issued or outstanding other than the Common Stock.
(h) To the Company’s knowledge, there are no agreements, arrangements or understandings between or among any of the Parties relating to the Transactions, including any agreement to place any shares of Common Stock to be issued to such Contributor in escrow or to issue such shares of Common Stock after the completion of the Transactions under a conditional or contingent stock or similar arrangement, other than this Agreement or any agreements referenced herein or in the Registration Statement.
(i) The Company is not an investment company within the meaning of Section 351(e)(1) of the Code and Treasury Regulations Section 1.351-1(c)(1)(ii).
(j) To the Company’s knowledge, the Contributions will occur pursuant to, and in accordance with, the terms of this Agreement, any agreements referenced herein and the Registration Statement.
ARTICLE 8
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Parties and each of their respective present and former officers, directors, employees, agents, predecessors, successors, assigns, insurers and attorneys (the “Released Parties”) from any and all claims, causes of action, liabilities, losses, costs, damages, penalties, charges, expenses and all other forms of liability or obligation whatsoever, in law or equity, whether asserted or unasserted, known or unknown, foreseen or unforeseen (“Claims”), arising prior to the Initial Delivery Date and relating to such Releasing Party’s ownership of the Contributed Interests prior to the Initial Delivery Date or otherwise arising from or relating to the transactions contemplated by this Agreement (collectively, the “Released Claims”); provided, however, that the Released Claims shall exclude any Claims arising from or relating to or in connection with (a) rights or obligations expressly set forth in this Agreement and (b) any claim or right to indemnification or advancement of expenses under the limited liability company agreement of any of XX XX, EQ II or AcqCo. as in effect prior to the Initial Delivery Date. Each Releasing Party expressly acknowledges that the release contained herein applies to all Released Claims and include Released Claims that if known by the Releasing Party might materially affect its decision to effect the release contained herein. Each Releasing Party has considered and taken into account the possible existence of such Released Claims in determining to execute and deliver this Agreement. Without limiting the generality of the foregoing, solely with respect to the Released Claims, each Releasing Party expressly waives any and all rights conferred upon it by any statute or rule of law that provides that a release does not extend to claims that the Releasing Party does not know or suspect to exist in its favor at the time of executing the release, which if known by the Releasing Party would have materially affected the Releasing Party’s release with the Released Parties. This Agreement constitutes a complete defense of any and all Released Claims. Each Releasing Party further agrees not to initiate any litigation, lawsuit, claim or action against any Released Party with respect to any Released Claim, except that the Releasing Party shall not be limited hereby from responding to, joining, prosecuting or being involved in any litigation, lawsuit, claim or action brought against such Releasing Party in respect of a Released Claim, nor from adjudicating whether or not a Claim constitutes a Released Claim.
(a) From and after the Initial Delivery Date, each Party (the “Indemnifying Party”) shall indemnify, defend and hold harmless each other Party and such other Party’s Affiliates, and its and its Affiliates’ respective directors, officers, managers, members, partners, stockholders, employees, agents and representatives, as applicable (the “Indemnitees”), from any and all damages, losses, obligations, liabilities, payments, costs and expenses (including reasonable fees and expenses of outside attorneys, accountants and other professional advisors and expert witnesses), whether known or unknown, contingent or vested, matured or unmatured, that are or may be suffered or incurred by any such Indemnitee arising out of or relating to a breach of any representation, warranty, covenant, agreement or obligation of the Indemnifying Party set forth in this Agreement; provided that in the case of a breach of any representation, warranty, covenant, agreement or obligation contained in Article 7, the indemnity provided for in this Section 8.4(a) shall apply only to the extent that such breach adversely affects the Tax Treatment and such adverse effect results in damages, losses, obligations, liabilities, payments, costs or expenses that are suffered or incurred by an Indemnitee.
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[Signature page follows.]
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WILDHORSE RESOURCE DEVELOPMENT CORPORATION | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: General Counsel | ||
E-mail: xxxxxx@xxxxxxxxxxx.xxx |
Signature Page to Master Contribution Agreement
WILDHORSE RESOURCES II, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: General Counsel | ||
E-mail: xxxxxx@xxxxxxxxxxx.xxx |
Signature Page to Master Contribution Agreement
WHR HOLDINGS, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: General Counsel | ||
E-mail: xxxxxx@xxxxxxxxxxx.xxx |
Signature Page to Master Contribution Agreement
WILDHORSE INVESTMENT HOLDINGS, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: General Counsel | ||
E-mail: xxxxxx@xxxxxxxxxxx.xxx |
Signature Page to Master Contribution Agreement
WILDHORSE MERGER SUB, LLC | ||
By: |
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Name: | ||
Title:
Address for notice:
0000 Xxxx Xxxxxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000 Tel: 000-000-0000 Attention: General Counsel E-mail: xxxxxx@xxxxxxxxxxx.xxx | ||
Signature Page to Master Contribution Agreement
ESQUISTO RESOURCES II, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxxx | ||
E-mail: xxxx@xx0xxxxxx.xxx |
Signature Page to Master Contribution Agreement
ESQUISTO HOLDINGS, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxxx | ||
E-mail: xxxx@xx0xxxxxx.xxx |
Signature Page to Master Contribution Agreement
ESQUISTO INVESTMENT HOLDINGS, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxxx | ||
E-mail: xxxx@xx0xxxxxx.xxx |
Signature Page to Master Contribution Agreement
ESQUISTO MERGER SUB, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxxx | ||
E-mail: xxxx@xx0xxxxxx.xxx |
Signature Page to Master Contribution Agreement
WHE ACQCO., LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxx | ||
E-mail: xxxxxxx@xxxxxx.xxx |
Signature Page to Master Contribution Agreement
WHE ACQCO. HOLDINGS, LLC | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 Xxxx Xxxxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxx | ||
E-mail: xxxxxxx@xxxxxx.xxx |
Signature Page to Master Contribution Agreement
NGP XI US HOLDINGS L.P. | ||
By: |
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Name: | ||
Title: | ||
Address for notice: | ||
0000 X. X’Xxxxxx Xxxx. | ||
00xx Xxxxx | ||
Xxxxxx, Xxxxx 00000 | ||
Tel: 000-000-0000 | ||
Attention: Xxxx Xxxxxx | ||
E-mail: xxxxxxx@xxxxxx.xxx |
Signature Page to Master Contribution Agreement