EXHIBIT 7.08
August 28, 2006
To: Knight Holdco LLC
The Other Members Listed on Schedule B
Re: Acquisition of Xxxxxx Xxxxxx, Inc.
Ladies and Gentlemen:
Reference is made to (1) the Agreement and Plan of Merger, dated as of
the date hereof (the "Merger Agreement"), by and among Xxxxxx Xxxxxx, Inc., a
Kansas corporation (the "Company"), Knight Holdco LLC, a Delaware limited
liability company ("Parent"), and Knight Acquisition Co., a Kansas corporation
and wholly owned subsidiary of Parent ("Merger Sub"), and pursuant to which
Merger Sub will be merged with and into the Company (the "Merger") and (2) the
Limited Liability Company Agreement of Parent, dated as of the date hereof (the
"Interim LLC Agreement"), by and among GS Capital Partners V Fund, L.P., GS
Capital Partners V Offshore Fund, L.P., GS Capital Partners V GmbH & CO. KG, GS
Capital Partners V Institutional, L.P., GS Global Infrastructure Partners I,
L.P. and The Xxxxxxx Xxxxx Group, Inc. (collectively, "GS"), Carlyle Partners
IV, L.P. ("Carlyle"), Carlyle/Riverstone Global Energy and Power Fund III, L.P.
("Riverstone") and AIG Knight LLC ("AIG" and, together with GS, Carlyle and
Riverstone, the "Investor Members" and each an "Investor Member") and Xxxxxxx X.
Xxxxxx (the "Management Group Member" and, together with the Investor Members,
the "Members"). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Merger Agreement and the Interim LLC Agreement,
as appropriate. This letter is being delivered to the addressees in connection
with the execution of the Merger Agreement by the Company, Parent and Merger
Sub.
This letter confirms the commitment of the undersigned, subject to the
conditions set forth herein, to purchase, or cause an assignee permitted by the
fifth paragraph of this letter (a "Permitted Assignee") to purchase, in the
aggregate, Class A units of Parent ("Subscribed Shares") for an aggregate
purchase price equal to the dollar commitment set forth next to the
undersigned's name on Schedule A (the "Commitment") solely for the purpose of
funding, and to the extent necessary to fund, the Merger Consideration pursuant
to and in accordance with the Merger Agreement and to pay fees and expenses
contemplated thereby; provided, however, that the undersigned and its Permitted
Assignees shall not, under any circumstances, be obligated to contribute to,
purchase equity or debt of or otherwise provide funds to Parent in connection
with its formation in any amount in excess of the Commitment. The obligation of
the undersigned and its Permitted Assignees to fund the Commitment is subject to
the consummation of the Merger and the terms of this letter, and the funding
will occur contemporaneous with the consummation of the Merger and the
simultaneous issuance to the undersigned of the Subscribed Shares.
This letter, and the undersigned's obligation to fund the Commitment,
will terminate automatically and immediately upon the earliest to occur of (a)
the Effective Time (at which time the obligation shall be discharged), (b) the
termination of the Merger Agreement, (c) the Members representing a majority of
the Equity Commitments of the Members agreeing to simultaneously terminate this
letter and the corresponding letters delivered by each of the Investor Members,
(d) the undersigned becomes a Terminating Investor Member and (e) the assertion
by the Company or any of its affiliates in any litigation or other proceeding of
any claim under any guarantee of any Investor Member or its affiliate in
connection herewith (each a "Guarantee").
The undersigned represents and warrants to Parent that: (i) the
undersigned has the requisite capacity and authority to execute and deliver this
letter and to fulfill and perform the undersigned's obligations hereunder and
(ii) this letter has been duly and validly executed and delivered by the
undersigned and constitutes a legal, valid and binding agreement of the
undersigned enforceable by the addressees against the undersigned in accordance
with its terms.
The rights and obligations under this letter may not be assigned by
any party hereto without the prior written consent of Parent and each Member,
and any attempted assignment shall be null and void and of no force or effect,
except as permitted in this paragraph. The undersigned may assign all or a
portion of its obligations to fund the Commitment to one or more of its
affiliated funds, entities and investment vehicles and to co-investors where the
undersigned retains direct or indirect control over voting and disposition;
provided, however, that no assignment shall relieve the undersigned of its
obligations under this letter. This letter may not be amended, and no provision
hereof waived or modified, except by an instrument in writing signed by Xxxxxx
and the undersigned and approved in writing by each Member, except that this
letter and Schedule A may be amended by sole action of the undersigned solely to
reflect the addition of one or more Permitted Assignees of all or a portion of
the undersigned's obligations to fund the Commitment as and to the extent
provided for in the immediately preceding sentence.
This letter shall be binding on the undersigned solely for the benefit
of the addressees, and nothing set forth in this letter shall be construed to
confer upon or give to any person other than the addressees any benefits, rights
or remedies under or by reason of, or any rights to enforce or cause such
addressee to enforce, the Commitment or any provisions of this letter.
Notwithstanding anything that may be expressed or implied in this
letter, the addressees, by their acceptance of the benefits of this letter,
covenant, agree and acknowledge that no person other than the undersigned (and
to the extent a portion of the commitment is assigned to one or more Permitted
Assignees, such Permitted Assignees) shall have any obligation hereunder and
that, notwithstanding that the undersigned (and to the extent a portion of the
commitment is assigned to one or more Permitted Assignees, such Permitted
Assignees) may be a partnership or limited liability company, no recourse
hereunder or under any documents or instruments delivered in connection herewith
shall be had against any former, current or future director, officer, employee,
agent, general or limited partner, manager, member, stockholder, affiliate or
assignee (other than a Permitted Assignee) of the undersigned (and to the extent
a portion of the commitment is assigned to one or more Permitted Assignees, such
Permitted Assignees) or any former, current or future director, officer,
employee, agent, general or limited partner, manager, member, stockholder,
affiliate or assignee (other than a Permitted Assignee) of any of the foregoing,
whether by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any statute, regulation or other applicable law, it
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being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise be incurred by any former, current
or future director, officer, employee, agent, general or limited partner,
manager, member, stockholder, affiliate or assignee (other than a Permitted
Assignee) of the undersigned (and to the extent a portion of the commitment is
assigned to one or more Permitted Assignees, such Permitted Assignees) or any
former, current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder, affiliate or assignee (other than a
Permitted Assignee) of any of the foregoing, as such, for any obligations of the
undersigned (and to the extent a portion of the commitment is assigned to one or
more Permitted Assignees, such Permitted Assignees) under this letter or any
documents or instrument delivered in connection herewith or for any claim based
on, in respect of, or by reason of such obligations or their creation.
This letter may only be enforced by the addressees in accordance with
Section 4.7 of the Interim LLC Agreement. Parent's creditors shall have no right
to enforce this letter or to cause Parent to enforce this letter.
Concurrently with the execution and delivery of this letter, the
undersigned is executing and delivering to the Company a Guarantee related to
Parent's and Merger Sub's obligations under the Merger Agreement. The Company's
remedies against the undersigned under the Guarantee shall, and are intended to
be, the sole and exclusive direct or indirect remedies available to the Company
against the undersigned and any former, current or future director, officer,
employee, agent, general or limited partner, manager, member, stockholder,
affiliate or assignee of the undersigned or any former, current or future
director, officer, employee, agent, general or limited partner, manager, member,
stockholder, affiliate or assignee of any of the foregoing in respect of any
liabilities or obligations arising under, or in connection with, the Merger
Agreement and the transactions contemplated thereby, including in the event
Parent or Merger Sub breaches its respective obligations under the Merger
Agreement, whether or not Parent's or Merger Sub's breach is caused by the
undersigned's breach of its obligations under this letter. Nothing in this
letter, express or implied, is intended to or shall confer upon any person,
other than Parent and the Members, any right, benefit or remedy of any nature
whatsoever under or by reason of this letter. The remedies of the Company and
the other addressees of this letter for a breach of this letter shall be limited
to those provided in Section 4.7 of the Interim LLC Agreement.
This letter shall be treated as confidential and is being provided to
the addressees solely in connection with the Merger. This letter may not be
used, circulated, quoted or otherwise referred to in any document, except with
the written consent of the Majority Members. The foregoing notwithstanding, and
without prejudice to the sixth paragraph of this letter, this letter may be
provided to the Company if the Company agrees to treat this letter as
confidential, except that the Company and the undersigned may disclose the
existence of this letter to the extent required by law, the applicable rules of
any national securities exchange or in connection with any SEC filings relating
to the Merger.
This letter may be executed in counterparts and by facsimile. This
letter shall be governed by, and construed and interpreted in accordance with,
the laws of the State of Delaware, without giving effect to any applicable
principles of conflict of laws that would cause the laws of another State to
otherwise govern this Agreement. The parties hereto hereby (a) submit to the
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personal jurisdiction of Delaware Court of Chancery, or in the event (but only
in the event) that such court does not have subject matter jurisdiction over an
action or proceeding, in the United States District Court for the District of
Delaware, and (b) waive any claim of improper venue or any claim that those
courts are an inconvenient forum. The parties hereto agree that mailing of
process or other papers in connection with any action or proceeding in the
manner provided in Section 8.7 of the Merger Agreement or in such other manner
as may be permitted by applicable laws, will be valid and sufficient service
thereof.
EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
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Very truly yours,
CARLYLE/RIVERSTONE GLOBAL ENERGY AND
POWER FUND III, L.P.
By: Carlyle/Riverstone Energy Partners
III, L.P., its General Partner
By: C/R Energy GP III, LLC, its General
Partner
By:/s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Authorized Person
Accepted and Acknowledged:
KNIGHT HOLDCO LLC
By: /s/Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Person
KNIGHT ACQUISITION CO.
By: /s/Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Person
GS CAPITAL PARTNERS V FUND, L.P.
By: GSCP V Advisors, L.L.C., its General Partner
By: /s/Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title:
CARLYLE PARTNERS IV, L.P.
By: TC Group IV, L.P. its General Partner
By: TC Group IV, L.L.C., its General Partner
By: GC Group, L.L.C., its Sole Member
By: TCG Holdings, L.L.C.
By: /s/Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
AIG KNIGHT LLC
By:/s/ Xxxxx XxXxxxxx
----------------------------
Name: Xxxxx XxXxxxxx
Title: Managing Director
/s/Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Schedule A
------------------------------------------- ------------------------------------
INVESTOR DOLLAR COMMITMENT
------------------------------------------- ------------------------------------
Carlyle/Riverstone Global Energy and $988,802,718
Power Fund III, L.P.
------------------------------------------- ------------------------------------
Schedule B
OTHER MEMBERS
GS Capital Partners V Fund, L.P.
GS Capital Partners V Offshore Fund, L.P.
GS Capital Partners V GmbH & CO. KG
GS Capital Partners V Institutional, L.P.
GS Global Infrastructure Partners I, L.P.
The Xxxxxxx Xxxxx Group, Inc.
Carlyle Partners IV, L.P.
AIG Knight LLC
Xxxxxxx X. Xxxxxx
