AMENDED AND RESTATED GUARANTEE OF CARLYLE PARTNERS IV, L.P.
Exhibit (d)(1)(C)
GUARANTEE, dated as of January 15, 2007 (this “Guarantee”), by Carlyle Partners IV,
L.P. (the “Guarantor”), in favor of ElkCorp, a Delaware corporation (the
“Company”).
1. GUARANTEE. To induce the Company to enter into that certain Amended and Restated
Agreement and Plan of Merger, dated as of January 15, 2007 (as amended, supplemented or otherwise
modified from time to time, the “Merger Agreement”), by and among the Company, CGEA
Holdings, Inc. a Delaware corporation (“Parent”), and CGEA Investor Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which
Merger Sub will commence a tender offer (the “Offer”) to purchase all outstanding shares of
common stock, par value $1.00 per share, of the Company, and following the consummation of the
Offer, 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
the obligation of Parent and Merger Sub to pay (a) the Parent Termination Fee pursuant to Section
7.3 of the Merger Agreement, (b) the Company Financing Expenses, and (c) the Company Note
Repurchase Expenses (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 $35
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. This
Amended and Restated Guarantee amends and restates the Guarantee dated as of December 18, 2006
among the parties hereto and as so amended and restated shall be deemed to be the Guarantee
referred to in Section 4.6 of the Merger Agreement.
2. NATURE OF GUARANTEE. The Company shall not be obligated to seek payment
of the Obligations from Parent or Merger Sub or 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Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor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 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 or any rescission, waiver,
compromise, consolidation or other amendment or modification of any of the terms or provisions of
the Offer, 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 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 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
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 Offer and 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 Termination Fee,
2
the Company Financing Expenses or the Company Note Repurchase Expenses, the Guarantor shall be
similarly relieved of its Obligations under this Guarantee but only to the same extent.
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;
3
(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:
4
| Attention: | Xxxxx X. Xxxxxxxx | |||
| Address: | Carlyle Partners IV, L.P. | |||
| c/o The Carlyle Group | ||||
| 0000 Xxxxxxxxxxxx Xxxxxx, XX | ||||
| Xxxxx 000 Xxxxx | ||||
| Xxxxxxxxxx, XX 00000-0000 | ||||
| Facsimile No.: | (000) 000-0000 | |||
| with a copy to: | ||||
| Attention: | Xxxx X. Xxxx | |||
| Address: | Debevoise & Xxxxxxxx LLP | |||
| 000 Xxxxx 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 Obligations are 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 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 declaratory relief in connection with obtaining payment hereunder
from Guarantor, Parent or Merger Sub, with respect to
5
the transactions contemplated by the Offer, 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 Offer, 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,
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 Parent
or Merger Sub in connection with a suit for declaratory relief in connection with obtaining payment
hereunder from 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 to Parent) arising under, or in connection with, the Offer, 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
6
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 Parent or Merger Sub in connection with a suit for declaratory
relief in connection with obtaining payment hereunder from 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.
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
7
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 $500,000. 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 $500,000.
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]
8
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 PARTNERS IV, L.P. |
||||
| By: | TC Group IV, LP., its general partner | |||
| By: TC Group IV, 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/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Managing Director | |||
Accepted and Agreed to: ELKCORP |
||||
| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | CEO | |||
