EXHIBIT 7.15
GUARANTEE
OF
CARLYLE/RIVERSTONE GLOBAL ENERGY AND POWER FUND III, L.P.
GUARANTEE, dated as of August 28, 2006 (this "Guarantee"), by
Carlyle/Riverstone Global Energy and Power Fund III, L.P. (the "Guarantor"), in
favor of Xxxxxx Xxxxxx, Inc., a Kansas corporation (the "Company").
1. GUARANTEE. To induce the Company to enter into that certain
Agreement and Plan of Merger, dated as of August 28, 2006 (as amended,
supplemented or otherwise modified from time to time, the "Merger Agreement"),
by and among the Company, Knight Holdco LLC, a Delaware limited liability
company ("Parent"), and Knight Acquisition Co., a Kansas corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub
will merge with and into the Company, the Guarantor absolutely, unconditionally
and irrevocably guarantees to the Company, the due and punctual observance,
payment, performance and discharge of any obligation of Parent and Merger Sub
pursuant to the Merger Agreement to pay 17.35% of the Parent Termination Fee (as
such term is defined in the Merger Agreement) to the Company under the Merger
Agreement (the "Obligations"); provided that notwithstanding anything to the
contrary set forth herein, the maximum amount payable by the Guarantor under
this Guarantee shall not exceed $37,299,352 (the "Cap"), it being understood
that this Guarantee may not be enforced without giving effect to the Cap. The
Company agrees that in the event that Parent or Merger Sub breaches its
Obligations under the Merger Agreement and the Company wishes to enforce its
rights under this Guarantee, the Company shall simultaneously attempt to enforce
its rights under those certain guarantees dated the date hereof by GS Capital
Partners V Fund, L.P., GS Global Infrastructure Partners I, L.P., Carlyle
Partners IV, L.P. and AIG Financial Products Corp. (the "Other Guarantors") in
favor of the Company and shall seek recourse against the Guarantor and the Other
Guarantors on an equal basis. Notwithstanding anything to the contrary contained
in this Guarantee or any other document, the obligations of the Guarantor under
this Agreement and of any other parties under any other guarantees shall be
several and not joint.
2. NATURE OF GUARANTEE. The Company shall not be obligated to
file any claim relating to the Obligations in the event that Parent or Merger
Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and
the failure of the Company to so file shall not affect the Guarantor's
obligations hereunder. In the event that any payment to the Company in respect
of any Obligations is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor shall remain liable hereunder with respect to such
Obligations as if such payment had not been made. This is an unconditional
guarantee of payment and not of collectibility. The Guarantor reserves the right
to assert defenses which Parent or Merger Sub may have to payment of any
Obligations other than defenses arising from the bankruptcy or insolvency of
Parent or Merger Sub and other defenses expressly waived hereby.
3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees
that the Company may at any time and from time to time, without notice to or
further consent of the Guarantor, extend the time of payment of any of the
Obligations, and may also make any agreement with Parent or Merger Sub for the
extension, renewal, payment, compromise, discharge or release thereof, in whole
or in part, or for any modification of the terms thereof or of any agreement
between the Company and Parent or Merger Sub or any such other person without in
any way impairing or affecting this Guarantee. The Guarantor agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (a) the failure of the Company to
assert any claim or demand or to enforce any right or remedy against Parent or
Merger Sub or any other entity or person interested in the transactions
contemplated by the Merger Agreement; (b) any change in the time, place or
manner of payment of any of the Obligations or any rescission, waiver,
compromise, consolidation or other amendment or modification of any of the terms
or provisions of the Merger Agreement or any other agreement evidencing,
securing or otherwise executed in connection with any of the Obligations, (c)
the addition, substitution or release of any other entity or person interested
in the transactions contemplated by the Merger Agreement; (d) any change in the
corporate existence, structure or ownership of Parent or Merger Sub or any other
entity or person interested in the transactions contemplated by the Merger
Agreement; (e) any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Parent or Merger Sub or any other entity or person
interested in the transactions contemplated in the Merger Agreement; (f) the
existence of any claim, set-off or other rights which the Guarantor may have at
any time against Parent, Merger Sub or the Company, whether in connection with
the Obligations or otherwise; or (g) the adequacy of any other means the Company
may have of obtaining payment of the Obligations. To the fullest extent
permitted by law, the Guarantor hereby expressly waives any and all rights or
defenses arising by reason of any law which would otherwise require any election
of remedies by the Company. The Guarantor waives promptness, diligence, notice
of the acceptance of this Guarantee and of the Obligations, presentment, demand
for payment, notice of non-performance, default, dishonor and protest, notice of
any Obligations incurred and all other notices of any kind (except for notices
to be provided to Parent and Merger Sub in accordance with Section 8.7 of the
Merger Agreement), all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the Parent or Merger Sub or
any other entity or other person interested in the transactions contemplated by
the Merger Agreement, and all suretyship defenses generally (other than fraud or
willful misconduct by the Company or any of its Subsidiaries or defenses to the
payment of the Obligations that are available to Parent or Merger Sub under the
Merger Agreement or breach by the Company of this Guarantee). The Guarantor
acknowledges that it will receive substantial direct and indirect benefits from
the transactions contemplated by the Merger Agreement and that the waivers set
forth in this Guarantee are knowingly made in contemplation of such benefits.
Notwithstanding anything to the contrary contained in this Guarantee, the
Company hereby agrees that to the extent Parent and Merger Sub are relieved of
their obligations under Section 7.2(b) of the Merger Agreement, the Guarantor
shall be similarly relieved of its Obligations under this Guarantee.
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4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the
Company to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Company of any right, remedy or power hereunder preclude any
other or future exercise of any right, remedy or power hereunder. Each and every
right, remedy and power hereby granted to the Company or allowed it by law or
other agreement shall be cumulative and not exclusive of any other, and may be
exercised by the Company at any time or from time to time.
5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants that:
(a) the execution, delivery and performance of this
Guarantee have been duly authorized by all necessary action and do not
contravene any provision of the Guarantor's partnership agreement, operating
agreement or similar organizational documents or any law, regulation, rule,
decree, order, judgment or contractual restriction binding on the Guarantor or
its assets;
(b) all consents, approvals, authorizations and permits
of, filings with and notifications to, any governmental authority necessary for
the due execution, delivery and performance of this Guarantee by the Guarantor
have been obtained or made and all conditions thereof have been duly complied
with, and no other action by, and no notice to or filing with, any governmental
authority or regulatory body is required in connection with the execution,
delivery or performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors' rights generally, and (ii) general equitable principles (whether
considered in a proceeding in equity or at law); and
(d) Guarantor has the financial capacity to pay and
perform its obligations under this Guarantee, and all funds necessary for the
Guarantor to fulfill its Obligations under this Guarantee shall be available to
the Guarantor for so long as this Guarantee shall remain in effect in accordance
with Section 8 hereof.
6. NO ASSIGNMENT. Neither the Guarantor nor the Company may
assign its rights, interests or obligations hereunder to any other person
(except by operation of law) without the prior written consent of the Company or
the Guarantor, as the case may be; provided, however, that the Guarantor may
assign all or a portion of its obligations hereunder to an affiliate or to an
entity managed or advised by an affiliate of the Guarantor, provided that no
such assignment shall relieve the Guarantor of any liability or obligation
hereunder except to the extent actually performed or satisfied by the assignee.
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7. NOTICES. All notices and other communications hereunder shall
be in writing in the English language and shall be given (a) on the date of
delivery if delivered personally, (b) on the first business day following the
date of dispatch if delivered by a nationally recognized next-day courier
service, (c) on the fifth business day following the date of mailing if
delivered by registered or certified mail (postage prepaid, return receipt
requested) or (d) if sent by facsimile or electronic transmission, when
transmitted and receipt is confirmed. All notices to the Guarantor hereunder
shall be delivered as set forth below:
Attention: Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx, Xx.
Address: c/o Riverstone Holdings LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000) 000-0000
with a copy to:
Attention: Xxxx Xxxxxxxxxxx
Address: Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
or to such other address or facsimile number as the Guarantor shall have
notified the Company in a written notice delivered to the Company in accordance
with the Merger Agreement. All notices to the Company hereunder shall be
delivered as set forth in the Merger Agreement.
8. CONTINUING GUARANTEE. This Guarantee shall remain in full
force and effect and shall be binding on the Guarantor, its successors and
assigns until all amounts payable under this Guarantee have been indefeasibly
paid or satisfied in full. Notwithstanding the foregoing, this Guarantee shall
terminate and the Guarantor shall have no further obligations under this
Guarantee as of the earlier of (i) the Effective Time (as defined in the Merger
Agreement) and (ii) the first anniversary of any termination of the Merger
Agreement in accordance with its terms, except as to a claim for payment of any
Obligation presented by the Company to Parent, Merger Sub or the Guarantor by
such first anniversary. Notwithstanding the foregoing, in the event that the
Company or any of its affiliates asserts in any litigation or other proceeding
that the provisions of Section 1 hereof limiting the Guarantor's liability to
the Cap or the provisions of this Section 8 or Section 9 hereof are illegal,
invalid or unenforceable in whole or in part, or asserting any theory of
liability against any Affiliate (as hereinafter defined) or, other than
liability of other than its right to recover from Guarantor for up to the amount
of the Obligations (subject to the Cap and the other limitations described
herein), Guarantor, Parent or Merger Sub, with respect to the transactions
contemplated by the Merger Agreement, then (i) the obligations of the Guarantor
under this Guarantee shall terminate ab initio and be null and void, (ii) if the
Guarantor has previously made any payments under this Guarantee, it shall be
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entitled to recover such payments, and (iii) neither the Guarantor nor any
Affiliate shall have any liability to the Company with respect to the
transactions contemplated by the Merger Agreement or under this Guarantee;
provided, however, that if the Guarantor asserts in any litigation or other
proceeding that this Guarantee is illegal, invalid or unenforceable in
accordance with its terms, then, to the extent the Company prevails in such
litigation or proceeding, the Guarantor shall pay on demand all reasonable fees
and out of pocket expenses of the Company in connection with such litigation or
proceeding.
9. NO RECOURSE.
(a) The Company acknowledges that the sole assets of
Parent and Merger Sub are cash in a de minimus amount and its rights under the
Merger Agreement, and that no additional funds are expected to be contributed to
Parent or Merger Sub unless and until the Closing occurs. Notwithstanding
anything that may be expressed or implied in this Guarantee or any document or
instrument delivered contemporaneously herewith, and notwithstanding the fact
that the Guarantor may be a partnership or limited liability company, by its
acceptance of the benefits of this Guarantee, the Company acknowledges and
agrees that it has no right of recovery against, and no liability shall attach
to, the former, current or future stockholders, directors, officers, employees,
agents, affiliates, members, managers, general or limited partners or assignees
of the Guarantor, Parent or Merger Sub or any former, current or future
stockholder, director, officer, employee, general or limited partner, member,
manager, affiliate, agent or assignee of any of the foregoing (collectively, but
not including Guarantor, Parent or Merger Sub, each an "Affiliate"), or, other
than its right to recover from Guarantor for up to the amount of the Obligations
(subject to the Cap and the other limitations described herein), Guarantor,
Parent or Merger Sub, through Parent, Merger Sub or otherwise, whether by or
through attempted piercing of the corporate, partnership or limited liability
company veil, by or through a claim by or on behalf of Parent or Merger Sub
against an Affiliate, Guarantor, Parent or Merger Sub (including a claim to
enforce the commitment letter dated as of the date hereof from the Guarantor and
the Other Guarantors to Parent) arising under, or in connection with, the Merger
Agreement or the transactions contemplated thereby or otherwise relating
thereto, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute, regulation or applicable law, or
otherwise. The Company hereby covenants and agrees that it shall not institute,
directly or indirectly, and shall cause its respective affiliates not to
institute, any proceeding or bring any other claim arising under, or in
connection with, the Merger Agreement or the transactions contemplated thereby
or otherwise relating thereto, against an Affiliate or, other than its right to
recover from Guarantor for up to the amount of the Obligations (subject to the
Cap and the other limitations described herein), Guarantor, Parent or Merger
Sub.
(b) Recourse against the Guarantor under this Guarantee
and against the Other Guarantors pursuant to their written guarantees delivered
contemporaneously herewith shall be the sole and exclusive remedy of the Company
against the Guarantor and any Affiliates in respect of any liabilities or
obligations arising under, or in connection with, the Merger Agreement or the
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transactions contemplated thereby or hereby or otherwise relating thereto or
hereto. Nothing set forth in this Guarantee shall confer or give or shall be
construed to confer or give to any Person other than the Guarantor and the
Company (including any Person acting in a representative capacity) any rights or
remedies against any Person other than the Company and the Guarantor as
expressly set forth herein.
(c) For all purposes of this Guarantee, a person shall be
deemed to have pursued a claim against another person if such first person
brings a legal action against such person, adds such other person to an existing
legal proceeding, or otherwise asserts a legal claim of any nature against such
person.
(d) The Company acknowledges that the Guarantor is
agreeing to enter into this Guarantee in reliance on the provisions set forth in
this Section 9. This Section 9 shall survive termination of this Guarantee.
10. GOVERNING LAW. This Guarantee shall be governed and construed
in accordance with the laws of the State of Delaware applicable to contracts
executed in and to be performed in that State. All actions arising out of or
relating to this Guarantee shall be heard and determined exclusively in the
state or federal courts of the United States of America located in the State of
Delaware. The parties hereto hereby (a) submit to the exclusive jurisdiction of
the state or federal courts of the United States of America located in the State
of Delaware for the purpose of any action arising out of or relating to this
Guarantee brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such action, any claim
that it is not subject personally to the jurisdiction of the above-named court,
that its property is exempt or immune from attachment or execution, that the
action is brought in an inconvenient forum, that the venue of the action is
improper, or that this Guarantee or the transactions contemplated hereby may not
be enforced in or by the above-named court.
11. WAIVER OF JURY TRIAL. 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 GUARANTEE OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY.
12. COUNTERPARTS. This Guarantee may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same instrument.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the Guarantor and the Company have caused
this Guarantee to be executed and delivered as of the date first written above
by its officer thereunto duly authorized.
CARLYLE/RIVERSTONE GLOBAL ENERGY AND
POWER FUND III, L.P.
By: Carlyle/Riverstone Energy Partners
III, L.P.
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 Agreed to:
XXXXXX XXXXXX, INC.
By: /s/Xxxxxx Xxxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
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