EXHIBIT 2.2
GUARANTEE
OF
CARLYLE INFRASTRUCTURE PARTNERS, L.P.
GUARANTEE, dated as of January 28, 2007 (this "Guarantee"), by Carlyle
Infrastructure Partners, L.P., a Delaware limited partnership (the "Guarantor"),
in favor of Synagro Technologies, Inc., a Delaware corporation (the "Company").
1. GUARANTEE. To induce the Company to enter into that certain Agreement
and Plan of Merger, dated as of January 28, 2007 (as amended, supplemented or
otherwise modified from time to time, the "Merger Agreement"), by and among the
Company, Synatech Holdings, Inc., a Delaware corporation ("Parent"), and
Synatech, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent
("Merger Sub"), pursuant to which Merger Sub will merge with and into the
Company, the Guarantor as primary obligor and not as surety, absolutely,
unconditionally and irrevocably guarantees to the Company, the due and punctual
observance, payment, performance and discharge of the obligation of Parent and
Merger Sub to pay (a) the Termination Expenses and (b) the Parent Liquidated
Damage Amount, pursuant to Section 8.03 of the Merger Agreement (as such terms
are defined in the Merger Agreement) to the Company (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
$13.9 million plus any amount payable pursuant to Section 11 of this Guarantee
(the "Cap"), it being understood that this Guarantee may not be enforced without
giving effect to the Cap.
2. NATURE OF GUARANTEE. The Company shall not be obligated to seek payment
of the Obligations from Parent or Merger Sub or 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 seek such payment or 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Obligations is rescinded or must otherwise be returned for any reason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 any defenses which Parent or Merger Sub may have to payment of any
Obligations that arise under the terms of the Merger Agreement.
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 liable with respect to any of the
Obligations; (b) any change in the time, place or manner of payment of any of
the Obligations; (c) the addition, substitution or release of any other entity
or person liable with respect to any of the Obligations; (d) any change in the
corporate existence, structure or ownership of Parent or Merger Sub or any other
entity or person liable with respect to any of the Obligations; (e) any
insolvency, bankruptcy, reorganization, or other similar proceeding affecting
Parent or Merger Sub or any other entity or person liable with respect to any of
the Obligations; (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 9.02 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 liable with
respect to any of the Obligations, and all suretyship defenses generally (other
than fraud 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 terms of
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 with respect to the Parent Liquidated Damage Amount or the
Termination Expenses pursuant to the terms of the Merger Agreement, the
Guarantor shall be similarly relieved of its Obligations under this Guarantee
but only to the same extent.
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The Guarantor hereby unconditionally and irrevocably WAIVES, and agrees not
to exercise, any rights that it may now have or hereafter acquire against Parent
or Merger Sub that arise from the existence, payment, performance, or
enforcement of the Guarantor's obligations under or in respect of this
Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Company against Parent or Merger Sub,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from Parent or Merger Sub, directly or indirectly, in cash or other
property or by setoff or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Obligations and any
amounts payable pursuant to Section 11 of this Guarantee shall have been paid in
full in cash. If any amount shall be paid to the Guarantor in violation of the
immediately preceding sentence at any time prior to the payment in full in cash
of the Obligations and any amounts payable pursuant to Section 11 of this
Guarantee, such amount shall be received and held in trust for the benefit of
the Company, shall be segregated from other property and funds of the Guarantor
and shall forthwith be paid or delivered to the Company in the same form as so
received (with any necessary endorsement or assignment) to be credited and
applied to the Obligations and any amounts payable pursuant to Section 11 of
this Guarantee, in accordance with the terms of the Merger Agreement, whether
matured or unmatured, or to be held as collateral for any Obligations or other
amounts payable pursuant to Section 11 of this Guarantee thereafter arising.
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;
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(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.
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:
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Attention: Xxxxx X. Gold
Address: Carlyle Infrastructure Partners, L.P.
c/o The Carlyle Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Attention: E. Xxxxxxx Xxxxxxx
Address: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
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
the earlier of (i) the Effective Time (as defined in the Merger Agreement), (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 and
(iii) the Obligations are fully and finally satisfied. Upon the termination date
referenced in the preceding sentence, the Guarantee shall terminate and the
Guarantor shall have no further obligations under this Guarantee.
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 asserts any theory of liability against any Affiliate (as
hereinafter defined) 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) and other than a suit against Parent or Merger Sub for
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declaratory relief in connection with obtaining payment hereunder from
Guarantor, 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
entitled to recover such payments, and (iii) neither the Guarantor nor any of
its Affiliates shall have any liability to the Company with respect to the
transactions contemplated by the Merger Agreement or under this Guarantee.
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, 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, (other than Parent or Merger Sub in connection with a suit for
declaratory relief as aforesaid) members, managers, general or limited
partners of the Guarantor, Parent or Merger Sub or any former, current or
future stockholder, director, officer, employee, general or limited
partner, member, manager, affiliate, (other than Parent or Merger Sub in
connection with a suit for declaratory relief as aforesaid) 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) and other than its right to recover from
Parent or Merger Sub in connection with a suit for declaratory relief in
connection with obtaining payment hereunder from Guarantor, Guarantor,
Parent or Merger Sub, 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 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) and other than its
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right to recover from Parent or Merger Sub in connection with a suit for
declaratory relief in connection with obtaining payment hereunder from
Guarantor, Guarantor, Parent or Merger Sub.
(b) Recourse against the Guarantor under this Guarantee (including a
suit against Parent or Merger Sub for declaratory relief in connection with
obtaining payment hereunder from Guarantor) shall be the sole and exclusive
remedy of the Company against the Guarantor and any of its Affiliates in
respect of any liabilities or obligations arising under, or in connection
with, the Merger Agreement or the 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.
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11. EXPENSES OF ENFORCEMENT. The Guarantor agrees to pay all reasonable
out-of-pocket fees and expenses (including the reasonable fees and expenses of
the Company's counsel) incurred by the Company in connection with the
enforcement of the rights of the Company hereunder; provided, that the Guarantor
shall not be liable for expenses of the Company under this Section 11 if it is
finally determined by a court of competent jurisdiction that no payment under
this Guarantee is due provided, further, that the obligation of the Guarantor
under this Section 11 shall not exceed $200,000. The Company agrees to pay all
reasonable out-of-pocket fees and expenses (including the reasonable fees and
expenses of the Guarantor's counsel) incurred by the Guarantor in connection
with the defense and enforcement of the rights of the Guarantor hereunder;
provided, that the Company shall not be liable for any expenses of the Guarantor
under this Section 11 if it is finally determined by a court of competent
jurisdiction that any payment under this Guarantee is due, and provided,
further, that the obligation of the Company hereunder shall not exceed $200,000.
12. 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.
13. 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 INFRASTRUCTURE PARTNERS, L.P.
By: CARLYLE INFRASTRUCTURE GENERAL PARTNER, L.P.,
its general partner
By: TC GROUP INFRASTRUCTURE, L.L.C.,
its general partner
By: TC GROUP, L.L.C., its sole member
By: TCG HOLDINGS, L.L.C., its managing member
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------
Title: Managing Director
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Accepted and Agreed to:
SYNAGRO TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxx, Xx.
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Title: Chief Executive Officer
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