-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BIl+8hBiAyET2OYpzgrrMvX6UGcBpDnJeY/XXNDEstN9WUNSWfI/E0y6ft9McpAg H1pgDoPrOhIfZ8/SyIWDRQ== 0000909518-06-000809.txt : 20060830 0000909518-06-000809.hdr.sgml : 20060830 20060829203600 ACCESSION NUMBER: 0000909518-06-000809 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20060830 DATE AS OF CHANGE: 20060829 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KINDER RICHARD D CENTRAL INDEX KEY: 0001031190 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 713-369-9000 MAIL ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KINDER MORGAN INC CENTRAL INDEX KEY: 0000054502 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 480290000 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-11513 FILM NUMBER: 061063783 BUSINESS ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 713-369-9000 MAIL ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: K N ENERGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: KN ENERGY INC DATE OF NAME CHANGE: 19920430 FORMER COMPANY: FORMER CONFORMED NAME: KANSAS NEBRASKA NATURAL GAS CO INC DATE OF NAME CHANGE: 19830403 SC 13D/A 1 mv8-29_13da2.txt AMEND NO.2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* Kinder Morgan, Inc. - -------------------------------------------------------------------------------- (NAME OF ISSUER) Common Stock, par value $5 per share - -------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 49455P - -------------------------------------------------------------------------------- (CUSIP NUMBER) James Westra, Esq. Weil, Gotshal & Manges LLP 100 Federal Street 34th Floor Boston, MA 02110 (617) 772-8300 R. Jay Tabor, Esq. Weil, Gotshal & Manges LLP 200 Crescent Court Suite 300 Dallas, Texas 75201 (214) 746-7700 - -------------------------------------------------------------------------------- ( NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) August 28, 2006 - -------------------------------------------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A EXPLANATORY NOTES: This Amendment No. 2 to Schedule 13D (this "Amendment") is being filed by Richard D. Kinder and the other reporting persons (collectively, the "Reporting Persons") identified in the Schedule 13D filed on May 30, 2006, as amended by Amendment No. 1 thereto filed on June 7, 2006 (as so amended, the "Schedule 13D") with the Securities and Exchange Commission (the "Commission") relating to the common stock, par value $5.00 per share ("Common Stock"), of Kinder Morgan, Inc. (the "Issuer"). The Schedule 13D is hereby amended and supplemented by the Reporting Persons as set forth below in this Amendment. Capitalized terms used but not defined in this Amendment shall have the meanings given in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION. The disclosure in Item 3 is hereby amended and restated in its entirety as follows: The aggregate value of the transactions (the "Transactions") contemplated by the Agreement and Plan of Merger, dated as of August 28, 2006, among Knight Acquisition Co. ("Merger Sub"), Knight Holdco LLC ("Parent"), and the Issuer (the "Merger Agreement"), which are described in Item 4 below, including debt incurred or to remain outstanding in connection with the Transactions, is approximately $22.4 billion. In separate Sponsor Equity Commitment Letters, dated August 28, 2006 (the "Sponsor Equity Commitment Letters"), each of the Sponsors agreed, subject to certain conditions, to contribute up to an aggregate of approximately $5.5 billion in cash to Parent in exchange for Class A units of Parent (the "Parent Class A Units"), solely for the purpose of funding the merger consideration pursuant to the Merger Agreement and to pay related expenses. The amounts under the Equity Commitment Letters may be reduced in the event of receipt of additional equity rollover or cash contributions from certain management or directors of the Issuer. This summary of the Sponsor Equity Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Sponsor Equity Commitment Letters, which are attached hereto as Exhibits 7.01 through 7.09 and incorporated by reference in their entirety into this Item 3. In addition, Richard D. Kinder entered into a Rollover Equity Commitment Letter, dated as of August 28, 2006 (the "Rollover Equity Commitment Letter"), pursuant to which Mr. Kinder agreed, subject to certain conditions, to contribute up to approximately 24 million shares of Common Stock to Parent (together with any rollover shares committed after the date hereof by management or directors of the Issuer, the "Rollover Shares") in exchange for Parent Class A Units. This summary of the Rollover Equity Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Rollover Equity Commitment Letter, which is attached hereto as Exhibit 7.10 and incorporated by reference in its entirety into this Item 3. The total equity to be contributed by the Sponsors, Mr. Kinder and the other members of management or directors of the Issuer, either through cash or the contribution of Rollover Shares, is approximately $7.9 billion. Page 2 of 9 In addition, Merger Sub entered into a Debt Commitment Letter with Goldman Sachs Credit Partners L.P., Citigroup Global Markets Inc., Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Wachovia Bank, National Association, Wachovia Investment Holdings, LLC, Wachovia Capital Markets, LLC, Merrill Lynch Capital Corporation, and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Lenders"), dated as of July 18, 2006 (the "Debt Commitment Letter"), pursuant to which the Lenders committed to provide, subject to certain conditions, up to $8.6 billion in debt financing through a combination of term loan facilities and a $1.0 billion senior secured credit facility (which will replace the existing $800 million unsecured facility of the Issuer), which financing will be used to fund the merger consideration under the Merger Agreement, pay certain expenses, refinance maturing debt, and for general corporate purposes for the operation of the Issuer following the closing of the Transactions. This summary of the Debt Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Debt Commitment Letter, which is attached hereto as Exhibit 7.11 and incorporated by reference in its entirety into this Item 3. Total funded indebtedness of the Issuer following the consummation of the Transactions is expected to be approximately $14.5 billion. The existing senior indebtedness of the Issuer and Kinder Morgan Finance Company, ULC is expected to be equally and ratably secured with the new debt financing described above. Finally, in separate Guarantees, each dated as of August 28, 2006 (the "Guarantees"), each of the Sponsors or their Affiliates unconditionally and irrevocably guaranteed to the Issuer, subject to certain conditions, a portion of Parent's and Merger Sub's payment obligations under the Merger Agreement. This summary of the Guarantees does not purport to be complete and is qualified in its entirety by reference to the Guarantees, which are attached hereto as Exhibits 7.12 through 7.16 and incorporated by reference in their entirety into this Item 3. ITEM 4. PURPOSE OF TRANSACTION. The disclosure in Item 4 is hereby supplemented by adding the following after the last paragraph thereof: On August 28, 2006, the Issuer announced in a Press Release (the "Press Release") that it had entered into the Merger Agreement, pursuant to which all of the outstanding shares of Issuer Common Stock (other than any Rollover Shares owned by Parent, Merger Sub or the Issuer) would be converted into the right to receive $107.50 per share in cash. The Press Release is attached hereto as Exhibit 7.17 and is incorporated by reference in its entirety into this Item 4. The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 7.18 and incorporated by reference in its entirety into this Item 4. In connection with the Transactions, Richard D. Kinder entered into a Voting Agreement with Parent and Merger Sub, dated as of August 28, 2006 (the "Voting Agreement"), pursuant to which Mr. Kinder agreed, subject to certain conditions, to vote his Issuer Common Stock in favor of the adoption of the Merger Agreement and against any competing takeover proposal that may be submitted by the Issuer for a vote of its stockholders. This summary of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement, which is attached hereto as Exhibit 7.19 and incorporated by reference in its entirety into this Item 4. Page 3 of 9 The Sponsors and Richard D. Kinder entered into a Limited Liability Company Agreement of Parent, dated as of August 28, 2006 (the "Interim LLC Agreement"), which will govern their conduct in respect of the Transactions between the time of the signing of the Merger Agreement and the effective time of the merger contemplated thereby or the termination of the Merger Agreement, whichever is earlier, including matters such as determining whether any closing condition contained in the Merger Agreement has been satisfied or shall be waived by Parent or Merger Sub. This summary of the Interim LLC Agreement does not purport to be complete and is qualified in its entirety by reference to the Interim LLC Agreement, which is attached hereto as Exhibit 7.20 and incorporated by reference in its entirety into this Item 4. The purpose of the Transactions is to acquire all of the outstanding Issuer Common Stock (other than Rollover Shares). If the Transactions are consummated, the Common Stock of the Issuer will be delisted from the New York Stock Exchange and will cease to be registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Issuer will be privately held by the Sponsors, the Reporting Persons, and certain additional members of the Issuer's management who elect to participate in the Transactions. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The information set forth or incorporated by reference in Item 3 and Item 4 is incorporated by reference in its entirety into this Item 6. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The disclosure in Item 7 is hereby supplemented by adding the following in appropriate numerical order at the end of that section: Exhibit 7.01. GS Capital Partners V Fund, L.P. Equity Commitment Letter, dated August 28, 2006. Exhibit 7.02 GS Capital Partners V Offshore Fund, L.P. Equity Commitment Letter, dated August 28, 2006 Exhibit 7.03 GS Capital Partners V GmbH & Co. KG Equity Commitment Letter, dated August 28, 2006 Exhibit 7.04 GS Capital Partners Institutional, L.P. Equity Commitment Letter, dated August 28, 2006 Exhibit 7.05 GS Global Infrastructure Partners I, L.P. Equity Commitment Letter, dated August 28, 2006 Exhibit 7.06 The Goldman Sachs Group, Inc. Equity Commitment Letter, dated August 28, 2006 Page 4 of 9 Exhibit 7.07. Carlyle Partners IV, L.P. Equity Commitment Letter, dated August 28, 2006. Exhibit 7.08. Carlyle/Riverstone Global Energy and Power Fund III, L.P.. Equity Commitment Letter, dated August 28, 2006. Exhibit 7.09. AIG Knight LLC Equity Commitment Letter, dated August 28, 2006. Exhibit 7.10. Rollover Equity Commitment Letter, dated August 28, 2006. Exhibit 7.11. Debt Commitment Letter, dated July 18, 2006. Exhibit 7.12. GS Capital Partners V Fund, L.P. Guarantee, dated August 28, 2006. Exhibit 7.13 GS Global Infrastructure Partners I, L.P. Guarantee, dated August 28, 2006 Exhibit 7.14. Carlyle Partners IV, L.P. Guarantee, dated August 28, 2006. Exhibit 7.15. Carlyle/Riverstone Global Energy and Power Fund III, L.P. Guarantee, dated August 28, 2006. Exhibit 7.16. AIG Financial Products Corp. Guarantee, dated August 28, 2006. Exhibit 7.17. Press Release, dated August 28, 2006 (incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by the Issuer on August 28, 2006). Exhibit 7.18. Agreement and Plan of Merger, by and between Knight Acquisition Co., Knight Holdco LLC and Kinder Morgan, Inc., dated as of August 28, 2006 (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Issuer on August 28, 2006). Exhibit 7.19. Voting Agreement, by and between Knight Holdco LLC, Knight Acquisition Co. and Richard D. Kinder, dated as of August 28, 2006. Exhibit 7.20. Limited Liability Agreement of Knight Holdco LLC, 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., The Goldman Sachs Group, Inc., Carlyle Partners IV, L.P., Carlyle/Riverstone Global Energy and Power Page 5 of 9 Fund III, L.P., AIG Knight LLC and Richard Kinder, dated as of August 28, 2006. Page 6 of 9 Signatures After reasonable inquiry and to the best knowledge and belief of each of the undersigned, such person certifies that the information set forth in this Schedule 13D/A with respect to such person is true, complete and correct. Dated: August 29, 2006 * ------------------------------------------ RICHARD D. KINDER * ------------------------------------------ C. PARK SHAPER * ------------------------------------------ STEVEN J. KEAN * ------------------------------------------ DAVID D. KINDER /S/ JOSEPH LISTENGART ------------------------------------------ JOSEPH LISTENGART * ------------------------------------------ KIMBERLY A. DANG * ------------------------------------------ JAMES E. STREET Page 7 of 9 PORTCULLIS PARTNERS, LP BY: PORTCULLIS G.P., LLC BY: * -------------------------------------- WILLIAM V. MORGAN MANAGER PORTCULLIS G.P., LLC BY: * -------------------------------------- WILLIAM V. MORGAN MANAGER * ------------------------------------------ WILLIAM V. MORGAN * ------------------------------------------ MICHAEL C. MORGAN * ------------------------------------------ FAYEZ SAROFIM Page 8 of 9 * Joseph Listengart, by signing his name hereto, does sign this document on behalf of each of the persons indicated above for whom he is attorney-in-fact pursuant to a power of attorney duly executed by such person and filed with the Securities and Exchange Commission /S/ JOSEPH LISTENGART ------------------------------------------ JOSEPH LISTENGART Page 9 of 9 EX-7 2 mm8-2906_sc13de701.txt 7.01 EXHIBIT 7.01 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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 3 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. [remainder of this page has been intentionally left blank] 4 Very truly yours, GS CAPITAL PARTNERS V FUND, L.P. By: GS CP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ------------------------------ Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ------------------------------ Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By: /s/ Glenn A. Youngkin ------------------------------ Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. ------------------------------ Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis ------------------------------ Name: James McGinnis Title: /s/Richard D. Kinder ------------------------------ Richard D. Kinder Schedule A - ------------------------------------------ ------------------------------------ INVESTOR DOLLAR COMMITMENT - ------------------------------------------ ------------------------------------ GS Capital Partners V Fund, L.P. $263,280,038 - ------------------------------------------ ------------------------------------ Schedule B OTHER MEMBERS 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 Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 3 mm8-2906_sc13de702.txt 7.02 EXHIBIT 7.02 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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. The Company's remedies against GS Capital Partners V Fund, L.P. 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 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 3 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. [remainder of this page has been intentionally left blank] 4 Very truly yours, GS CAPITAL PARTNERS V OFFSHORE FUND, L.P. By: GSCP V Offshore Advisors, L.L.C, its General Partner By: /s/ Henry Cornell ---------------------------------- Name: Henry Cornell Title: Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ---------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ---------------------------- Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By:/s/ Glenn A. Youngkin ---------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. -------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis ---------------------------- Name: James McGinnis Title: /s/Richard D. Kinder ---------------------------- Richard D. Kinder Schedule A - -------------------------------------------- ----------------------------------- INVESTOR DOLLAR COMMITMENT - -------------------------------------------- ----------------------------------- - -------------------------------------------- ----------------------------------- GS Capital Partners V Offshore Fund, L.P. $135,999,471 - -------------------------------------------- ----------------------------------- Schedule B OTHER MEMBERS GS Capital Partners V 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 Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 4 mm8-2906_sc13de703.txt 7.03 EXHIBIT 7.03 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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. The Company's remedies against GS Capital Partners V Fund, L.P. 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 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 3 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. [remainder of this page has been intentionally left blank] 4 Very truly yours, GS CAPITAL PARTNERS V GMBH & CO. KG By: GS Advisors V, L.L.C., its Managing Partner By: /s/ Henry Cornell ---------------------------------- Name: Henry Cornell Title: Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell --------------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell --------------------------------- Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By:/s/ Glenn A. Youngkin --------------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. --------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis --------------------------------- Name: James McGinnis Title: /s/Richard D. Kinder --------------------------------- Richard D. Kinder Schedule A - ------------------------------------------ ------------------------------------- INVESTOR DOLLAR COMMITMENT - ------------------------------------------ ------------------------------------- GS Capital Partners V GmbH & CO. KG $10,438,161 - ------------------------------------------ ------------------------------------- Schedule B OTHER MEMBERS GS Capital Partners V Fund, L.P. GS Capital Partners V Offshore Fund, L.P. GS Capital Partners V Institutional, L.P. GS Global Infrastructure Partners I, L.P. The Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 5 mm8-2906_sc13de704.txt 7.04 EXHIBIT 7.04 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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. The Company's remedies against GS Capital Partners V Fund, L.P. 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 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 3 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. [remainder of this page has been intentionally left blank] Very truly yours, GS CAPITAL PARTNERS V INSTITUTIONAL, L.P. By: GS Advisors V, L.L.C., its General Partner By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell -------------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell -------------------------------- Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By:/s/ Glenn A. Youngkin -------------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. -------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis -------------------------------- Name: James McGinnis Title: /s/Richard D. Kinder -------------------------------- Richard D. Kinder Schedule A - ------------------------------------------- ------------------------------------ INVESTOR DOLLAR COMMITMENT - ------------------------------------------- ------------------------------------ GS Capital Partners V Institutional, L.P. $90,282,330 - ------------------------------------------- ------------------------------------ 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 Global Infrastructure Partners I, L.P. The Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 6 mm8-2906_sc13de705.txt 7.05 EXHIBIT 7.05 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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 3 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. [remainder of this page has been intentionally left blank] Very truly yours, GS GLOBAL INFRASTRUCTURE PARTNERS I, L.P. By: GS Infrastructure Advisors 2006, L.L.C., its General Partner By: /s/ Joseph Martelliti --------------------------- Name: Joseph Martelliti Title: Vice President Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell -------------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell -------------------------------- Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By:/s/ Glenn A. Youngkin -------------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. -------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis -------------------------------- Name: James McGinnis Title: /s/Richard D. Kinder -------------------------------- Richard D. Kinder Schedule A - ------------------------------------------ ------------------------------------- INVESTOR DOLLAR COMMITMENT - ------------------------------------------ ------------------------------------- GS Global Infrastructure Partners I, L.P. $ 300,000,000 - ------------------------------------------ ------------------------------------- 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. The Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 7 mm8-2906_sc13de706.txt 7.06 EXHIBIT 7.06 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 and subject to any assignment to 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 entities. This letter may not be amended, and no provision hereof waived or modified, except by an instrument in writing signed by Parent 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 2 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. The Company's remedies against GS Capital Partners V Fund, L.P. 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 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 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 3 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. [remainder of this page has been intentionally left blank] Very truly yours, THE GOLDMAN SACHS GROUP, INC. By: /s/ Elizabeth Beshel ------------------------------ Name: Elizabeth Beshel Title: Treasurer Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ------------------------------ Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ------------------------------ Name: Henry Cornell Title: Authorized Person 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By:/s/ Glenn A. Youngkin ------------------------------ Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. ------------------------------ Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis ------------------------------ Name: James McGinnis Title: /s/Richard D. Kinder ------------------------------ Richard D. Kinder Schedule A - ---------------------------------- ---------------------------------------- INVESTOR DOLLAR COMMITMENT - ---------------------------------- ---------------------------------------- The Goldman Sachs Group, Inc. $ 1,438,822,666 - ---------------------------------- ---------------------------------------- Schedule B 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. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 8 mm8-2906_sc13de707.txt 7.07 EXHIBIT 7.07 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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 3 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. [remainder of this page has been intentionally left blank] 4 Very truly yours, 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/Glenn A. Youngkin ---------------------------------- Name: Glenn A. Youngkin Title: Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: Authorized Person GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: 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/ Pierre F. Lapeyre, Jr. ---------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis ---------------------------------- Name: James McGinnis Title: /s/Richard D. Kinder ---------------------------------- Richard D. Kinder Schedule A - --------------------------------------- ---------------------------------------- INVESTOR DOLLAR COMMITMENT - --------------------------------------- ---------------------------------------- Carlyle Partners IV, L.P. $988,802,718 - --------------------------------------- ---------------------------------------- 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 Goldman Sachs Group, Inc. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Richard D. Kinder EX-7 9 mm8-2906_sc13de708.txt 7.08 EXHIBIT 7.08 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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 3 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. [remainder of this page has been intentionally left blank] 4 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/ Pierre F. Lapeyre, Jr. ---------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ---------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ---------------------------- Name: Henry Cornell Title: Authorized Person GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ---------------------------- Name: Henry Cornell 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/Glenn A. Youngkin ---------------------------- Name: Glenn A. Youngkin Title: AIG KNIGHT LLC By:/s/ James McGinnis ---------------------------- Name: James McGinnis Title: Managing Director /s/Richard D. Kinder ---------------------------- Richard D. Kinder 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 Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. AIG Knight LLC Richard D. Kinder EX-7 10 mm8-2906_sc13de709.txt 7.09 EXHIBIT 7.09 August 28, 2006 To: Knight Holdco LLC The Other Members Listed on Schedule B Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 Parent 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 2 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, an affiliate of the undersigned (the "Guarantor") 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 Guarantor 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 3 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. [remainder of this page has been intentionally left blank] 4 Very truly yours, AIG KNIGHT LLC By: /s/ James McGinnis ----------------------------- Name: James McGinnis Title: Managing Director Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell ----------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell ----------------------------- Name: Henry Cornell Title: Authorized Person GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ----------------------------- Name: Henry Cornell 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/Glenn A. Youngkin ----------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. ----------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person /s/Richard D. Kinder ----------------------------- Richard D. Kinder Schedule A - ----------------------------------------- -------------------------------------- INVESTOR DOLLAR COMMITMENT - ----------------------------------------- -------------------------------------- AIG Knight LLC $1,263,504,879 - ----------------------------------------- -------------------------------------- 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 Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. Richard D. Kinder EX-7 11 mm8-2906_sc13de710.txt 7.10 EXHIBIT 7.10 August 28, 2006 To: Knight Holdco LLC The Investor Members Listed on Schedule A Re: Acquisition of Kinder Morgan, 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 Kinder Morgan, 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 Goldman Sachs 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 Richard D. Kinder (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 subscribe for Class A units of Parent ("Subscribed Shares") for aggregate consideration consisting of the number of shares of Company Common Stock (the "Committed Shares") and the cash amounts (the "Committed Cash") set forth on Schedule B, provided that the undersigned 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 other than the contribution of the Committed Shares and the Committed Cash. The Subscribed Shares shall have a value for purposes of determining the relative equity contributions of the undersigned and the Investor Members as set forth next to the heading "Total Value" in Schedule B. The obligation of the undersigned to fund the Committed Shares and the Committed Cash (the "Commitment") is subject to the consummation of the Merger and the terms of this letter, and the funding will occur immediately prior to the Effective Time 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 terminate the corresponding letters delivered by each of the Investor Members and (d) the assertion by the Company or any of its affiliates in any litigation or other proceeding any claim under any guarantee of any Investor Member or its Affiliate in connection herewith (the "Guarantees"). Notwithstanding the foregoing, in the event that the Merger Agreement is amended to effect a Change in the Merger Consideration without the consent of the undersigned, such non-consenting signatory may terminate his, her or its Commitment and shall be released from any liability under this letter. 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; (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; (iii) the undersigned is the record and beneficial owner of the Committed Shares, free and clear of any lien or encumbrance (other than those arising under this letter) and has full and unrestricted power to dispose of all of such Committed Shares as contemplated by this letter without the consent or approval of, or any other action on the part of, any other Person; (iv) other than the filing by the undersigned of any reports with the SEC required by Sections 13(d) or 16(a) of the Exchange Act, none of the execution and delivery of this letter by the undersigned, the consummation by the undersigned of the transactions contemplated hereby or compliance by the undersigned with any of the provisions hereof (1) requires any consent or other permit of, or filing with or notification to, any Governmental Entity or any other Person by the undersigned, (2) results in a violation or breach of, or constitutes (with or without notice or lapse of time or both) a default (or gives rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any organizational document or contract to which the undersigned is a party or by which the undersigned or any of the Committed Shares may be bound or affected, (3) violates any law or order or judgment of any governmental authority applicable to the undersigned or the Committed Shares, or (4) results in a lien or encumbrance upon any of the Committed Shares; and (v) the undersigned has not entered into any share disposition, commitment or other agreement that is inconsistent with this letter (including the Commitment). The undersigned covenants and agrees that from and after the date hereof and for so long as this letter remains in effect, the undersigned shall not take or omit to take any action that would or would cause or result in any of the foregoing representations and warranties to become untrue. 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. This letter may not be amended, and no provision hereof waived or modified, except by an instrument in writing signed by Parent and the undersigned and approved in writing by each Member. 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. - 2 - 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. 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. The Company's remedies against the Investor Members (or their Affiliates) under the Guarantees shall, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company against the Members (or their Affiliates), including the undersigned, 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 or Merger Sub's breach is caused by the undersigned's breach of his 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. 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. Except to the extent otherwise required pursuant to a determination (within the meaning of Section 1313(a) of the Code), the parties hereto shall treat the issuance of Subscribed Shares in exchange for the contribution of the Commitment as a tax-free exchange for United States federal income tax purposes to the Company and its Members and shall not take any position, on a tax return, in any tax proceeding or otherwise, that is inconsistent with such treatment. 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 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. - 3 - 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. [remainder of this page has been intentionally left blank] - 4 - Very truly yours, /s/Richard D. Kinder -------------------------------------- Richard D. Kinder Accepted and Acknowledged: KNIGHT HOLDCO LLC By: /s/Henry Cornell -------------------------------------- Name: Henry Cornell Title: Authorized Person KNIGHT ACQUISITION CO. By: /s/Henry Cornell -------------------------------------- Name: Henry Cornell Title: Authorized Person GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell -------------------------------------- Name: Henry Cornell 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/Glenn A. Youngkin -------------------------------------- Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. -------------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person NY12528:255157.2 AIG KNIGHT LLC By:/s/ James McGinnis -------------------------------------- Name: James McGinnis Title: Managing Director Schedule A INVESTOR 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 Goldman Sachs Group, Inc. Carlyle Partners IV, L.P. Carlyle/Riverstone Global Energy and Power Fund III, L.P. AIG Knight LLC Schedule B STOCKHOLDER SHARES CASH VALUE - -------------------------------------------------------------------------------- Richard D. Kinder 23,994,827(1) --- $2,423,477,527 Total Shares: 23,994,827 Total Cash: --- Total Value: $2,423,477,527 - -------- (1) Includes 250 shares held by Mr. Kinder for the account of his nephew. Additionally, Mr. Kinder's wife is expected to contribute an additional 5,173 shares of Company Common Stock to Parent. EX-7 12 mm8-2906_sc13de711.txt 7.11 EXHIBIT 7.11 GOLDMAN SACHS CREDIT PARTNERS L.P WACHOVIA BANK, NATIONAL ASSOCIATION 85 Broad Street WACHOVIA INVESTMENT HOLDINGS, LLC New York, NY 10004 WACHOVIA CAPITAL MARKETS, LLC One Wachovia Center 301 South College Street CITIGROUP GLOBAL MARKETS INC. Charlotte, NC 28288-0737 390 Greenwich Street New York, New York 10013 MERRILL LYNCH CAPITAL CORPORATION DEUTSCHE BANK AG NEW YORK BRANCH MERRILL LYNCH, PIERCE, FENNER DEUTSCHE BANK SECURITIES INC. & SMITH INCORPORATED 60 Wall Street 4 World Financial Center New York, NY 10005 250 Vesey Street New York, NY 10080 CONFIDENTIAL July 18, 2006 Knight Acquisition Corp. c/o The Addressees set forth below Project Knight Commitment Letter Ladies and Gentlemen: You have advised Goldman Sachs Credit Partners L.P. ("GSCP"), Citigroup (as defined below), Deutsche Bank AG New York Branch ("DBNY"), Deutsche Bank Securities Inc. ("DBSI"), Wachovia Bank, National Association ("Wachovia Bank"), Wachovia Investment Holdings, LLC ("Wachovia Investments"), Wachovia Capital Markets, LLC ("Wachovia Securities"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("ML") and Merrill Lynch Capital Corporation ("Merrill Lynch", together with GSCP, Citigroup, DBNY, DBSI, Wachovia Bank, Wachovia Investments, Wachovia Securities and ML, "we", "us" or the "Commitment Parties") that Knight Acquisition Corp. ("Merger Co"), formed at the direction of American International Group, Inc. and its affiliates (collectively, "AIG"), Goldman Sachs Capital Partners and its affiliates (collectively, "Goldman"), Riverstone Holdings LLC and its affiliates (collectively, "Riverstone"), The Carlyle Group and its affiliates (collectively, "Carlyle" and, together with AIG, Goldman, Riverstone and Carlyle, the "Sponsors"), and certain members of the management (collectively, the "Management") of the entity previously identified to the Commitment Parties as "Knight" (the "Company"), together with certain other investors arranged by the Sponsors (collectively, the "Investors"), intend to acquire the Company. You have further advised us that, in connection with the foregoing, you intend to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A. Capitalized terms used but not defined herein have the meanings assigned to them in such Exhibit A and in the Term Sheet (as defined below). For purposes of this Commitment Letter, "Citigroup" shall mean Citigroup Global Markets Inc. ("CGMI"), Citibank, N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as Citigroup shall determine to be appropriate to provide the services contemplated herein. In connection with the Transactions, each of GSCP, Citigroup, DBNY, Wachovia Bank (or, in the case of the Tranche C Term Facility (as defined in the Term Sheet defined below, Wachovia Investments) and Merrill Lynch (collectively, the "Initial Lenders") is pleased to advise you of its several, but not joint, commitment to provide 20% of the entire aggregate principal amount of the Senior Secured Facilities upon the terms and subject to the conditions set forth or referred to in this Commitment Letter and in the exhibits hereto (such exhibits, collectively, the "Term Sheet") and 20% of the entire aggregate principal amount of the Revolving Credit Increase on or before November 22, 2006 subject only to the conditions to such increase set forth in Section 2.01(b) of the KMP Credit Agreement. You hereby appoint (i) GSCP to act, and GSCP agrees to act, as co-lead arranger and joint bookrunner for each of the Senior Secured Facilities (with GSCP having "left side" designation and GSCP's name appearing on the left-hand side of the Confidential Information Memorandum or other marketing materials prepared in connection with the Senior Secured Facilities), (ii) Citigroup to act, and Citigroup agrees to act, as co-lead arranger for the Tranche B Term Facility (as defined in the Term Sheet) and joint bookrunner for each of the Senior Secured Facilities, (iii) DBSI to act, and DBSI agrees to act, as co-lead arranger for the Tranche C Term Facility (as defined in the Term Sheet) and joint bookrunner for each of the Senior Secured Facilities, (iv) Wachovia Securities to act, and Wachovia Securities agrees to act, as co-lead arranger for the Tranche D Term Facility and the Revolving Facility (each as defined in the Term Sheet) and joint bookrunner for each of the Senior Secured Facilities, (v) ML to act, and ML agrees to act, as joint bookrunner for each of the Senior Secured Facilities (GSCP, Citigroup, DBSI, Wachovia Securities and ML, collectively, the "Joint Bookrunners"), (vi) Citigroup to act, and Citigroup hereby agrees to act, as sole administrative agent for the Senior Secured Facilities and sole collateral agent for the Senior Secured Facilities with primary responsibility for documentation, (vii) GSCP and DBSI to act, and each of GSCP and DBSI hereby agrees to act, as co-syndication agents for the Senior Secured Facilities and (viii) Wachovia Bank (or, in the case of the Tranche C Term Facility, Wachovia Investments) and ML to act, and each of Wachovia Bank (and Wachovia Investments, as applicable) and ML hereby agrees to act, as co-documentation agents for the Senior Secured Facilities, in each case on the terms and subject to the conditions set forth or referred to in this Commitment Letter and in the Term Sheet. It is understood and agreed that no other agents, co-agents, arrangers, co-arrangers, bookrunners, managers or co-managers will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by the Term Sheet or the Fee Letter referred to below) will be paid in connection with the Senior Secured Facilities unless 2 you and we shall so agree, provided that you may appoint up to two additional agents or co-agents with allocation of compensation thereto as previously discussed with the Sponsors. The Initial Lenders reserve the right, prior to or after the execution of definitive documentation for the Senior Secured Facilities (the "Senior Secured Facilities Documentation"), to syndicate all or a portion of their respective commitments hereunder to one or more financial institutions identified by the Joint Bookrunners in consultation with and reasonably acceptable to you that will become parties to the Senior Secured Facilities Documentation and the KMP Credit Agreement pursuant to syndications to be managed by the Joint Bookrunners (the financial institutions becoming parties to the Senior Secured Facilities Documentation and/or the KMP Credit Agreement being collectively referred to as, the "Lenders"); provided that, notwithstanding the Initial Lenders' right to syndicate the Senior Secured Facilities and the Revolving Credit Increase and receive commitments with respect thereto, no Initial Lender may assign all or any portion of its commitments hereunder prior to the date of the initial funding under the Senior Secured Facilities (the date of such funding, the "Closing Date") or the closing of the Revolving Credit Increase, as the case may be. You understand that the Senior Secured Facilities and the Revolving Credit Increase will be separately syndicated, and you agree actively to assist the Joint Bookrunners in completing timely syndications reasonably satisfactory to the Joint Bookrunners and you. Such assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from your existing banking relationships and the existing banking relationships of the Sponsors and, to the extent practical and appropriate, the Company and its subsidiaries, (b) direct contact between your and the Company's senior management, representatives and advisors, on the one hand, and the proposed Lenders, on the other hand (and your using commercially reasonable efforts to ensure such contact between the senior management, representatives and advisors of each of the Sponsors and the Company, on the one hand, and the proposed Lenders, on the other hand), (c) your assistance (including the use of commercially reasonable efforts to cause the Sponsors, the Company and your and their subsidiaries and representatives and advisors to assist) in the preparation of a customary Confidential Information Memorandum for the Senior Secured Facilities and other customary marketing materials to be used in connection with the syndication, (d) using your commercially reasonable efforts to obtain ratings on the Senior Secured Facilities by each of Moody's and S&P prior to the Closing Date and (e) the hosting, with the Joint Bookrunners, of one or more conference calls with or meetings of prospective Lenders at times and locations mutually agreed upon. You understand that the Joint Bookrunners may decide to commence syndication efforts for the Senior Secured Facilities promptly after the date hereof. Without limiting your obligations to assist with syndication efforts as set forth above, each Initial Lender agrees that completion of such syndications is not a condition to their commitments hereunder. The Joint Bookrunners will manage, in consultation with you, all aspects of the syndication, including, without limitation, selection of Lenders (subject to your consent rights set forth in the preceding paragraph), determination of when the Joint Bookrunners will approach potential Lenders and the time of acceptance of the Lenders' commitments, any naming rights (subject to your right to award additional titles set forth in the third paragraph of this Commitment Letter), the final allocations of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist the Joint Bookrunners in their syndication efforts, you agree promptly to prepare and provide to us (and to use commercially reasonable efforts to cause the 3 Sponsors and the Company to provide to us) all information with respect to you, the Company and your and their subsidiaries and the Transactions, including, without limitation, all financial information and projections (including financial estimates, forecasts and other forward-looking information, the "Projections"), as the Joint Bookrunners may reasonably request in connection with the structuring, arrangement and syndication of the Senior Secured Facilities. At the request of the Joint Bookrunners, you agree to assist (and to use commercially reasonable efforts to cause the Company to assist) in the preparation of a version of the information package and presentation consisting exclusively of information and documentation that is either publicly available or not material with respect to the Company and its affiliates and any of its securities for purposes of United States federal and state securities laws. You hereby represent and warrant that (a) to the best of your knowledge, all written information other than the Projections and information of a general economic or industry nature (the "Information") that has been or will be made available to any Commitment Party by or on behalf of you or any of your representatives or affiliates, taken as a whole, is or will be, when furnished, correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements thereto) and (b) the Projections that have been or will be made available to any Commitment Party by or on behalf of you or any of your representatives or affiliates, have been, or will be, prepared in good faith based upon assumptions believed by you to be reasonable at the time so made available. You agree that, if at any time prior to the Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will supplement the Information and the Projections such that, to the best of your knowledge, the representations and warranties in the preceding sentence will be correct in all material respects under those circumstances. In arranging the Senior Secured Facilities, including the syndications of the Senior Secured Facilities, each of the Commitment Parties will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof. As consideration for the Initial Lenders' commitment hereunder and each Joint Bookrunner's agreement to structure, arrange and syndicate the Senior Secured Facilities, you agree to pay (or to cause to be paid) to the Initial Lenders the nonrefundable fees as set forth in the Term Sheet and in the Fee Letter dated the date hereof and delivered herewith with respect to the Senior Secured Facilities (collectively, the "Fee Letter"). Each Initial Lender's commitment hereunder with respect to the Senior Secured Facilities and each Joint Bookrunner's agreement to perform the services described herein are subject to (a) there not having occurred, since the date hereof, a "Company Material Adverse Effect" (as defined in the Merger Agreement) and (b) the other conditions set forth in the Term Sheet and the other exhibits hereto. In addition, the commitments of the Initial Lenders hereunder with respect to the Senior Secured Facilities are subject to the negotiation, execution and delivery of Senior Secured Facilities Documentation consistent 4 with the Term Sheet and otherwise in form and substance customary and appropriate for transactions of this type for affiliates of the Sponsors. Notwithstanding anything in this Commitment Letter, the Term Sheet, the Fee Letter, the Senior Secured Facilities Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations relating to the Company, its subsidiaries and their businesses the making of which shall be a condition to availability of the Senior Secured Facilities on the Closing Date shall be (A) such of the representations made by the Company in the Merger Agreement as are material to the interests of the Lenders, but only to the extent that you have the right to terminate your obligations under the Merger Agreement as a result of a breach of such representations in the Merger Agreement and (B) the Specified Representations (as defined below) and (ii) the terms of the Senior Secured Facilities Documentation shall be in a form such that they do not impair availability of the Senior Secured Facilities on the Closing Date if the conditions set forth herein and in the Term Sheet are satisfied (it being understood that, to the extent any Collateral (other than the pledge and perfection of the security interest in the capital stock of domestic subsidiaries of the Borrower (to the extent required under the Term Sheet) and other assets pursuant to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) is not provided on the Closing Date after your use of commercially reasonable efforts to do so, the delivery of such Collateral shall not constitute a condition precedent to the availability of the Senior Secured Facilities on the Closing Date but shall be required to be delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed). For purposes hereof, "Specified Representations" means the representations and warranties of the Company set forth in the Term Sheet relating to corporate power and authority, the enforceability of the Senior Secured Facilities Documentation, Federal Reserve margin regulations and the Investment Company Act. You agree (a) to indemnify and hold harmless each Commitment Party, its affiliates and their officers, directors, employees, agents and controlling persons (collectively, the "indemnified persons"), from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Fee Letter, the Term Sheet, the Transactions and the other transactions contemplated hereby, the Senior Secured Facilities or any claim, litigation, investigation or proceeding (any of the foregoing, a "Proceeding") relating to any of the foregoing, regardless of whether any such indemnified person is a party thereto or whether a Proceeding is brought by a third party or by you or any of your affiliates, and to reimburse each such indemnified person upon demand for any reasonable legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses (i) to the extent they have resulted from the willful misconduct, bad faith or gross negligence of such indemnified person or any of its affiliates or its or their officers, directors, employees, agents and controlling persons, (ii) arising from a breach of the obligations of such indemnified person under this Commitment Letter or the Senior Secured Facilities Documentation or (iii) arising out of or in connection with any Proceeding that does not involve an act or omission of you or any of your related parties and that is brought by an indemnified person against any other indemnified person, and (b) if the Closing Date occurs, to reimburse each Commitment Party from time to time for all reasonable and documented out-of-pocket expenses (including, without limitation, 5 expenses of each Commitment Party's due diligence investigation, consultants' fees (to the extent any such consultant has been retained with your prior written consent), syndication expenses, travel expenses and reasonable fees, disbursements and other charges of counsel identified in the Term Sheet and of local counsel (not to exceed one counsel in any jurisdiction)) incurred in connection with the Senior Secured Facilities and the preparation of this Commitment Letter, the Term Sheet, the Fee Letter, the Senior Secured Facilities Documentation and any security arrangements in connection therewith. Notwithstanding any other provision of this Commitment Letter, no indemnified person shall be liable for any damages arising from (i) the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems, except to the extent such damages have resulted from the willful misconduct, bad faith or gross negligence of any indemnified person or any of its affiliates or its or their officers, directors, employees, agents and controlling persons or (ii) for any special, indirect, consequential or punitive damages in connection with its activities related to the Senior Secured Facilities. You shall not be liable for any settlement of any Proceedings effected without your consent (which consent shall not be unreasonably withheld), but if settled with your written consent or if there is a final judgment for the plaintiff in any such Proceedings, you agree to indemnify and hold harmless each indemnified person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with the preceding paragraph. You shall not, without the prior written consent of an indemnified person (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought hereunder by such indemnified person unless (i) such settlement includes an unconditional release of such indemnified person in form and substance reasonably satisfactory to such indemnified person from all liability on claims that are the subject matter of such Proceedings and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified person. You acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. None of the Commitment Parties and their affiliates will use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or any of their other relationships with you in connection with the performance by them and their affiliates of services for other companies, and none of the Commitment Parties and their affiliates will furnish any such information to other companies. You also acknowledge that none of the Commitment Parties and their affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, the Company or your or its subsidiaries, confidential information obtained by the Commitment Parties and their affiliates from other companies. This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (other than to the ultimate borrower under the Senior Secured Facilities so long as such entity is controlled by the Sponsors or, with respect to the Revolving Credit Increase, KMP) without the prior written consent of each other party hereto, and any attempted assignment without such consent shall be void. This Commitment Letter may not be amended or any 6 provision hereof waived or modified except by an instrument in writing signed by the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission (or other electronic means (i.e., a "PDF")) shall be effective as delivery of a manually executed counterpart of this Commitment Letter. This Commitment Letter (including the exhibits hereto) and the Fee Letter are the only agreements that have been entered into among the parties hereto with respect to the Senior Secured Facilities and set forth the entire understanding of the parties hereto with respect thereto. This Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of any state or Federal court of the United States of America sitting in the City of New York, and any appellate court from any thereof, over any suit, action or proceeding arising out of or relating to the Transactions or the other transactions contemplated hereby, this Commitment Letter, the Term Sheet or the Fee Letter or the performance of services hereunder or thereunder. Each of the parties hereto agrees that service of any process, summons, notice or document by registered mail addressed to it shall be effective service of process for any suit, action or proceeding brought in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in any inconvenient forum. Each of the parties hereto hereby irrevocably agree to waive trial by jury in any suit, action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of the Transactions, this Commitment Letter, the Term Sheet or the Fee Letter or the performance of services hereunder or thereunder. We hereby notify you that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the "Patriot Act"), each of us and each of the Lenders may be required to obtain, verify and record information that identifies you and the Company, which information may include your and its names and addresses and other information that will allow each of us and the Lenders to identify you or the Company in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective for each of us and the Lenders. You agree that you will not disclose, directly or indirectly, the Fee Letter and the contents thereof or, prior to you acceptance hereof, this Commitment Letter, the Term Sheet and the contents of each thereof, or the activities of any Commitment Party pursuant hereto or thereto, to any person without prior written approval of a majority of the Joint Bookrunners, except that you may disclose (a) the Commitment Letter, the Term Sheet, the Fee Letter and the contents hereof and thereof (i) to the Sponsors and to your and any Sponsor's officers, directors, agents, employees, attorneys, accountants and advisors directly involved in the consideration of this matter on a confidential and need-to-know basis and (ii) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or 7 otherwise as required by applicable law or compulsory legal process based on the advice of your legal counsel (in which case you agree to inform us promptly thereof), (b) this Commitment Letter, the Term Sheet and the contents hereof and thereof (and, after your acceptance of the terms hereof and of the Fee Letter and return of executed signature pages hereto and thereto, the Fee Letter and the contents thereof) to the Company, the members of the special committee of the board of directors of the Company and to each of their respective officers, directors, employees, attorneys, accountants and advisors, in each case in connection with the Transactions and on a confidential and need-to-know basis, (c) the existence and contents of the Term Sheet to any rating agency in connection with the Transactions and (d) to the extent required by applicable law, the existence and contents of this Commitment Letter and the Term Sheet in any public filing or prospectus in connection with the Merger or the financing thereof; provided, that the foregoing restrictions shall cease to apply (except in respect of the Fee Letter and the contents thereof) after the Senior Secured Facilities Documentation shall have been executed and delivered by the parties thereto. The Commitment Parties and their affiliates will use all confidential information provided to them or such affiliates by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially all such information; provided that nothing herein shall prevent the Commitment Parties from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case the Commitment Parties, to the extent permitted by law, agree to inform you promptly thereof), (b) upon the request or demand of any regulatory authority having jurisdiction over the Commitment Parties or any of their affiliates, (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by the Commitment Parties or any of their affiliates, (d) to the extent that such information is received by the Commitment Parties from a third party that is not to the Commitment Parties' knowledge subject to confidentiality obligations to you, (e) to the extent that such information is independently developed by the Commitment Parties, (f) to the Commitment Parties' affiliates and their employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with the Transactions and are informed of the confidential nature of such information or (g) to potential Lenders, participants or assignees who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph). The Commitment Parties' obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the definitive documentation relating to the Senior Secured Facilities upon the initial funding thereunder. The indemnification, jurisdiction and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Senior Secured Facilities Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the Initial Lenders' commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) titles awarded in connection with the Senior Secured Facilities and assistance to be provided in connection with the syndication thereof and (b) confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be superseded by the provisions of the Senior Secured Facilities Documentation upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time. You may 8 terminate the Initial Lenders' commitments hereunder at any time subject to the provisions of the preceding sentence. Please indicate your acceptance of the terms hereof and of the Fee Letter by signing in the appropriate space below and in the Fee Letter and returning to Citigroup the enclosed duplicate originals (or facsimiles) of this Commitment Letter and the Fee Letter, in each case not later than 5:00 p.m., New York City time, on September 20, 2006, failing which the Initial Lenders' commitments hereunder will expire at such time. In the event that the initial borrowing under the Senior Secured Facilities does not occur on or before September 30, 2007, then this Commitment Letter and the commitments hereunder shall automatically terminate unless we shall, in our discretion, agree to an extension. 9 We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions. Very truly yours, GOLDMAN SACHS CREDIT PARTNERS L.P., by /s/William W. Archer ----------------------------------- Name: William W. Archer Title: Managing Director CITIGROUP GLOBAL MARKETS INC., by /s/Richard Zogheb ----------------------------------- Name: Richard Zogheb Title: Managing Director DEUTSCHE BANK AG NEW YORK BRANCH, by /s/Calli S. Hayes ----------------------------------- Name: Calli S. Hayes Title: Managing Director by /s/Victoria Minsell ----------------------------------- Name: Victoria Minsell Title: Managing Director DEUTSCHE BANK SECURITIES INC., by /s/Terrence E. Nesafsey ----------------------------------- Name: Terrence E. Nesafsey Title: Managing Director by /s/Kevin M. Sherlock ----------------------------------- Name: Kevin M. Sherlock Title: Managing Director WACHOVIA BANK, NATIONAL ASSOCIATION, by /s/Stephen M. Neill ----------------------------------- Name: Stephen M. Neill Title: Director WACHOVIA INVESTMENT HOLDINGS, LLC, by /s/Stephen M. Neill ----------------------------------- Name: Stephen M. Neill Title: Director WACHOVIA CAPITAL MARKETS, LLC, by /s/Stephen M. Neill ----------------------------------- Name: Stephen M. Neill Title: Director MERRILL LYNCH CAPITAL CORPORATION, by /s/Richard C. Stoddard ----------------------------------- Name: Richard C. Stoddard Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, by /s/Richard C. Stoddard ----------------------------------- Name: Richard C. Stoddard Title: Managing Director Accepted and agreed to as of the date first written above: KNIGHT ACQUISITION CO. by /s/Henry Cornell ----------------------------------------------- Name: Henry Cornell Title: Authorized Person In care of: Mr. Richard D. Kinder c/o Kinder Morgan, Inc. 500 Dallas Street, Suite 1000 Houston, TX 77002 GS Capital Partners V Fund, L.P. 85 Broad Street New York, NY 10004 Attention of Henry Cornell AIG Global Asset Management Holdings Corp. 70 Pine Street New York, NY 10270 Attention of Brian T. Schreiber The Carlyle Group 1001 Pennsylvania Avenue, N.W., Suite 200 South Washington, DC 20004-2505 Attention of Allan M. Holt Riverstone Holdings LLC 712 Fifth Avenue, 51st Floor New York, NY 10019 Attention of Pierre F. Lapeyre, Jr. and David M. Leuschen EX-7 13 mm8-2906_sc13de712.txt 7.12 EXHIBIT 7.12 GUARANTEE OF GS CAPITAL PARTNERS V FUND, L.P. GUARANTEE, dated as of August 28, 2006 (this "Guarantee"), by GS Capital Partners V Fund, L.P. (the "Guarantor"), in favor of Kinder Morgan, 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 39.07% 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 $84,002,270 (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 Global Infrastructure Partners I, L.P., Carlyle Partners IV, L.P., Carlyle/Riverstone Global Energy and Power Fund III, 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 - 5 - 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. 2 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. 3 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: Ben I. Adler Address: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Facsimile No: (212) 482-3820 with a copy to: Attention: David M. Silk Mitchell S. Presser Igor Kirman Address: Wachtell, Lipton, Rosen & Katz 51 West 52 Street New York, NY 10019 Facsimile No.:(212) 403-2000 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 4 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 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 5 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. 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 6 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. GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ------------------------------------ Name: Henry Cornell Title: Accepted and Agreed to: KINDER MORGAN, INC. By: /s/Joseph Listengart ------------------------------------ Name: Joseph Listengart Title: Vice President EX-7 14 mm8-2906_sc13de713.txt 7.13 EXHIBIT 7.13 GUARANTEE OF GS GLOBAL INFRASTRUCTURE PARTNERS I, L.P. GUARANTEE, dated as of August 28, 2006 (this "Guarantee"), by GS Global Infrastructure Partners I, L.P. (the "Guarantor"), in favor of Kinder Morgan, 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 0.21% 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 $450,000 (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., Carlyle Partners IV, L.P., Carlyle/Riverstone Global Energy and Power Fund III, 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. 2 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. 3 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: Ben I. Adler Address: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Facsimile No: (212) 482-3820 with a copy to: Attention: David M. Silk Mitchell S. Presser Igor Kirman Address: Wachtell, Lipton, Rosen & Katz 51 West 52 Street New York, NY 10019 Facsimile No.:(212) 403-2000 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 4 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 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 5 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. 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 6 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. GS GLOBAL INFRASTRUCTURE PARTNERS I, L.P. By: GS Infrastructure Advisors 2006, L.L.C., its General Partner By: /s/Renee Beaumont ------------------------------------ Name: Renee Beaumont Title: Vice President Accepted and Agreed to: KINDER MORGAN, INC. By: /s/Joseph Listengart ------------------------------------ Name: Joseph Listengart Title: Vice President 7 EX-7 15 mm8-2906_sc13de714.txt 7.14 EXHIBIT 7.14 GUARANTEE OF CARLYLE PARTNERS IV, L.P. GUARANTEE, dated as of August 28, 2006 (this "Guarantee"), by Carlyle Partners IV, L.P. (the "Guarantor"), in favor of Kinder Morgan, 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/Riverstone Global Energy and Power Fund III, 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. 2 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. 3 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: Glenn A. Youngkin Address: c/o The Carlyle Group 1001 Pennsylvania Avenue, NW Suite 220 South Washington, DC 20004-2505 Facsimile No: (202) 347-1818 with a copy to: Attention: Daniel T. Lennon Address: c/o Latham & Watkins LLP 555 Eleventh Street, NW Suite 1000 Washington, DC 20004-1304 Facsimile No.: (202) 637-2201 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 4 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 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 5 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 6 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, L.P., 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. By: /s/Glenn A. Youngkin ---------------------------------- Name: Glenn A. Youngkin Title: Accepted and Agreed to: KINDER MORGAN, INC. By: /s/Joseph Listengart ---------------------------------- Name: Joseph Listengart Title: Vice President 7 EX-7 16 mm8-2906_sc13de715.txt 7.15 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 Kinder Morgan, 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. 2 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. 3 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: David M. Leuschen Pierre F. Lapeyre, Jr. Address: c/o Riverstone Holdings LLC 712 Fifth Avenue, 51st Floor New York, NY 10019 Facsimile No: (212) 993-0077 with a copy to: Attention: Mike Rosenwasser Address: Vinson & Elkins LLP 666 Fifth Avenue, 26th Floor New York, NY 10103 Facsimile No.: (212) 237-0100 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 4 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 5 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 6 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/Pierre F. Lapeyre, Jr. ----------------------------------- Name: Pierre F. Lapeyre, Jr. Title: Authorized Person Accepted and Agreed to: KINDER MORGAN, INC. By: /s/Joseph Listengart ---------------------------------- Name: Joseph Listengart Title: Vice President 7 EX-7 17 mm8-2906_sc13de716.txt 7.16 EXHIBIT 7.16 GUARANTEE OF AIG FINANCIAL PRODUCTS CORP. Guarantee, dated as of August 28, 2006 (this "Guarantee"), by AIG Financial Products Corp., a Delaware corporation with its principal office located at 50 Danbury Road, Wilton, CT 06897-4444 (the "Guarantor"), in favor of Kinder Morgan, Inc., a Kansas corporation (the "Guaranteed Party"). 1. GUARANTEE. To induce the Guaranteed Party 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 Guaranteed Party, 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 Guaranteed Party, the Guarantor absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party the prompt payment when due, subject to applicable grace periods, of 26.02% of the Parent Termination Fee (as such term is defined in 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 $55,949,027 (the "Cap"), it being understood that this Guarantee may not be enforced without giving effect to the Cap. Notwithstanding anything to the contrary contained in this Guarantee or any other document, the obligations of Guarantor under this Agreement and of any other parties under any other guarantees shall be several and not joint. 2. NATURE OF GUARANTEE. The Guarantor's obligations hereunder shall not be affected by the existence, validity, enforceability, perfection or extent of any collateral therefor or by any other circumstance relating to the Obligations that might otherwise constitute a legal or equitable discharge of or defense to the Guarantor not available to Parent or Merger Sub. The Guarantor agrees that the Guaranteed Party may resort to the Guarantor for payment of any of the Obligations whether or not the Guaranteed Party shall have resorted to any collateral therefor or shall have proceeded against Parent or Merger Sub or any other obligor principally or secondarily obligated with respect to any of the Obligations. The Guaranteed Party 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 Guaranteed Party to so file shall not affect the Guarantor's obligations hereunder. In the event that any payment to the Guaranteed Party 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 (a) set-off against any payment owing to the Guaranteed Party hereunder any amounts owing by the Guaranteed Party to Parent, Merger Sub or the Guarantor and (b) 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. 1 3. CHANGES IN OBLIGATIONS, COLLATERAL THEREFOR AND AGREEMENTS RELATING THERETO; WAIVER OF CERTAIN NOTICES. The Guarantor agrees that the Guaranteed Party 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 or with any other party to, or person interested in the transactions contemplated by the Merger Agreement, 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 Guaranteed Party and Parent or Merger Sub or any such other person without in any way impairing or affecting this Guarantee. The Guarantor waives notice of the acceptance of this Guarantee and of the Obligations, presentment, demand for payment, notice of dishonor and protest. 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 Guaranteed Party 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; or (f) the adequacy of any other means the Guaranteed Party may have of obtaining payment of the Obligations. Notwithstanding anything to the contrary contained in this Guarantee, the Guaranteed Party 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. 4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party 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 Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. 5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that: (a) the Guarantor is duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power to execute, deliver and perform this Guarantee; 2 (b) the execution, delivery and performance of this Guarantee have been duly authorized by all necessary corporate action and do not contravene any provision of the Guarantor's certificate of incorporation or by-laws, as amended to date, or any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets; (c) all consents, licenses, clearances, authorizations and approvals of, and registrations and declarations with, any governmental authority or regulatory body necessary for the due execution, delivery and performance of this Guarantee have been obtained and remain in full force and effect 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; and (d) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights, and to general equity principles; 6. ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign its rights, interests or obligations hereunder to any other person (except by operation of law) without the prior written consent of the Guaranteed Party 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 or demands on the Guarantor shall be deemed effective when received, shall be in writing and shall be delivered by hand or by registered mail, or by facsimile transmission promptly confirmed by registered mail, addressed to the Guarantor at: AIG Financial Products Corp. 50 Danbury Road Wilton, CT 06897-4444 Attention: Chief Financial Officer, General Counsel Facsimile: 203-222-4780 or to such other address or facsimile number as the Guarantor shall have notified the Guaranteed Party in a written notice delivered to the Guaranteed Party in accordance with the Merger Agreement. 3 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 Guaranteed Party to Parent, Merger Sub or the Guarantor by such first anniversary. 9. NO RECOURSE. The Guaranteed Party acknowledges that the sole assets of Parent and Merger Sub are cash in a de minimis 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 of instrument delivered contemporaneously herewith, by its acceptance of the benefits of this Guarantee, the Guaranteed Party 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 the 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 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 letters dated as of the date hereof from the AIG Knight LLC and certain other parties 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 Guaranteed Party 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. Recourse against the Guarantor under this Guarantee shall be the sole and exclusive remedy of the Guaranteed Party against the Guarantor or Affiliates in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. Nothing set forth in this Guarantee shall affect or be construed to affect any liability of Parent or Merger Sub to the Guaranteed Party or shall confer or give or shall be construed to confer or give to any Person other than the Guaranteed Party (including any Person acting in a representative capacity) any rights or remedies against any Person other than the Guarantor as expressly set forth herein. For all purposes of this Guarantee, pursuit of a claim against a person by the Guaranteed Party 4 shall be deemed to be pursuit of a claim by the Guaranteed Party arising under or in connection with the Merger Agreement or the transactions contemplated thereby or otherwise relating thereto. 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. The Guaranteed Party 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 New York applicable to contracts executed in and to be performed in that State. 11. JURISDICTION. 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 New York. 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 New York 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. 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. 5 IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered by the Guarantor to the Guaranteed Party as of the date first written above by its officer thereunto duly authorized. AIG FINANCIAL PRODUCTS CORP. By: /s/James McGinnis ------------------------------------ Name: James McGinnis Title: Managing Director Accepted and Agreed to: KINDER MORGAN, INC. By: /s/Joseph Listengart ------------------------------------ Name: Joseph Listengart Title: Vice President [Signature Page to the AIG Guarantee Letter] 6 EX-7 18 mm8-2906_sc13de719.txt 7.19 EXHIBIT 7.19 VOTING AGREEMENT THIS VOTING AGREEMENT (this "Agreement") is dated as of August 28, 2006, by and among Knight Holdco LLC, a Delaware limited liability company ("Parent"), Knight Acquisition Co., a Kansas corporation and wholly-owned subsidiary of Parent ("Merger Sub," and, together with Parent, the "Purchaser Parties") and the Persons executing this Agreement as "Stockholders" on the signature page hereto (each, a "Stockholder" and collectively, the "Stockholders"). RECITALS WHEREAS, simultaneously with the execution of this Agreement, the Purchaser Parties and Kinder Morgan, Inc., a Kansas corporation (the "Company"), have entered into an Agreement and Plan of Merger, as it may be amended, supplemented, modified or waived from time to time (the "Merger Agreement"), which provides, among other things, for the Merger of Merger Sub with and into the Company, upon the terms and subject to the conditions set forth therein; WHEREAS, each Stockholder is the record and Beneficial Owner of, and has the sole right to vote and dispose of, that number of Shares set forth next to such Stockholder's name on Schedule A hereto; and WHEREAS, as an inducement to the Purchaser Parties entering into the Merger Agreement and incurring the obligations therein, the Purchaser Parties have required that each Stockholder enter into this Agreement. NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: I. CERTAIN DEFINITIONS Section 1.1 Capitalized Terms. Capitalized terms used in this Agreement and not defined herein have the meanings ascribed to such terms in the Merger Agreement. Section 1.2 Other Definitions. For the purposes of this Agreement: (a) "Beneficial Owner" or "Beneficial Ownership" with respect to any securities means having "beneficial ownership" of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act). (b) "Expiration Time" has the meaning set forth in Section 2.1. (c) "Investor Members" refers to GS Capital Partners V Fund, L.P., The Carlyle Group, Carlyle/Riverstone Energy Partners III, L.P. and AIG Global Asset Management Holdings Corp. (d) "Legal Actions" means any claims, actions, suits, demand letters, judicial, administrative or regulatory proceedings, or hearings, notices of violation, or investigations. (e) "Owned Shares" has the meaning set forth in Section 2.1. (f) "Permits" means all authorizations, licenses, consents, certificates, registrations, approvals, orders and other permits of any Governmental Entity. (g) "Representative" means, with respect to any particular Person, any director, officer, employee, agent or other representative of such Person, including any consultant, accountant, legal counsel or investment banker. (h) "Shares" has the meaning ascribed thereto in the Merger Agreement, and will also include for purposes of this Agreement all shares or other voting securities into which Shares may be reclassified, sub-divided, consolidated or converted and any rights and benefits arising therefrom, including any dividends or distributions of securities which may be declared in respect of the Shares and entitled to vote in respect of the matters contemplated by Article II. (i) "Transfer" means, with respect to a security, the sale, grant, assignment, transfer, pledge, encumbrance, hypothecation or other disposition of such security or the Beneficial Ownership thereof (including by operation of Law), or the entry into any Contract to effect any of the foregoing, including, for purposes of this Agreement, the transfer or sharing of any voting power of such security or other rights in or of such security, the granting of any proxy with respect to such security, depositing such security into a voting trust or entering into a voting agreement with respect to such security. II. AGREEMENT TO VOTE Section 2.1 Agreement to Vote. Subject to the terms and conditions hereof, each Stockholder irrevocably and unconditionally agrees that from and after the date hereof and until the earliest to occur of (i) the Effective Time; (ii) the termination of the Merger Agreement in accordance with its terms, and (iii) the written agreement of the Purchaser Parties to terminate this Agreement (such earliest occurrence being the "Expiration Time"), at any meeting (whether annual or special, and at each adjourned or postponed meeting) of the Company's stockholders, however called, or in any other circumstances (including any sought action by written consent) upon which a vote or other consent or approval is sought (any such meeting or other circumstance, a "Stockholder's Meeting"), each Stockholder will (y) appear at such a meeting or otherwise cause its Owned Shares to be counted as present thereat for purposes of calculating a quorum and respond to any other request by the Company for written consent, if any, and, unless otherwise expressly consented to in writing by the Purchaser Parties, in their sole discretion, (z) vote, or cause to be voted, all of such Stockholder's Shares Beneficially Owned by such Stockholder as of the relevant time ("Owned Shares") (A) in favor of the adoption of the Merger Agreement (whether or not recommended by the Company's Board of Directors or any committee thereof) and the approval of the transactions contemplated thereby, including the Merger, (B) in favor of the approval of any other matter to be approved by the stockholders of the Company to facilitate the transactions contemplated by the Merger Agreement, including the Merger, (C) against any Alternative Proposal or any transaction contemplated by such Alternative Proposal, (D) against any proposal made in opposition to, or in competition or inconsistent with, the Merger or the Merger Agreement, including the adoption thereof or the consummation thereof, (E) against any extraordinary dividend, distribution or recapitalization by the 2 Company or change in the capital structure of the Company (other than pursuant to or as explicitly permitted by the Merger Agreement) and (F) against any action or agreement that would reasonably be expected to result in any condition to the consummation of the Merger set forth in Article VI of the Merger Agreement not being fulfilled. Section 2.2 Additional Shares. Each Stockholder hereby agrees, while this Agreement is in effect, promptly to notify the Purchaser Parties of the number of any new Shares or Company Stock Options with respect to which Beneficial Ownership is acquired by such Stockholder, if any, after the date hereof and before the Expiration Time. Any such Shares shall automatically become subject to the terms of this Agreement as Owned Shares as though owned by such Stockholder as of the date hereof. Section 2.3 Restrictions on Transfer, Etc. Except as provided for herein or as contemplated in the Equity Rollover Commitment Letter, each Stockholder agrees, from the date hereof until the Expiration Time, not to (i) directly or indirectly Transfer or offer to Transfer any Owned Shares or Company Stock Options; (ii) tender any Owned Shares or Company Stock Options into any tender or exchange offer or otherwise; or (iii) otherwise restrict the ability of such Stockholder freely to exercise all voting rights with respect thereto. Any action attempted to be taken in violation of the preceding sentence will be null and void. Notwithstanding the foregoing, each Stockholder may make transfers of Owned Shares for estate planning or similar purposes so long as such Stockholder retains control over the voting and disposition of such Owned Shares and agrees in writing to continue to vote such Owned Shares in accordance with this Agreement. Each Stockholder further agrees to authorize and hereby authorizes the Purchaser Parties and the Company to notify the Company's transfer agent that there is a stop transfer order with respect to all of the Owned Shares and that this Agreement places limits on the voting of the Owned Shares. Section 2.4 Proxy. Each Stockholder hereby revokes any and all previous proxies granted with respect to its Owned Shares. By entering into this Agreement, each Stockholder hereby grants a proxy appointing Parent, with full power of substitution, as such Stockholder's attorney-in-fact and proxy, for and in such Stockholder's name, to be counted as present and to vote or otherwise to act on behalf of the Stockholder with respect to its Owned Shares solely with respect to the matters set forth in, and in the manner contemplated by Section 2.1 as such proxy or it substitutes shall, in the Purchaser Parties' sole discretion, deem proper with respect to its Owned Shares. The proxy granted by each Stockholder pursuant to this Section 2.4 is, subject to the penultimate sentence of this Section 2.4, irrevocable and is coupled with an interest, in accordance with Section 6502 of the General Corporation Code of the State of Kansas and is granted in order to secure such Stockholder's performance under this Agreement and also in consideration of Parent and Merger Sub entering into this Agreement and the Merger Agreement. If any Stockholder fails for any reason to be counted as present or to vote such Stockholder's Owned Shares in accordance with the requirements of Section 2.1 above (or anticipatorily breaches such section), then the Purchaser Parties shall have the right to cause to be present or vote such Stockholder's Owned Shares in accordance with the provisions of Section 2.1. The proxy granted by each Stockholder shall be automatically revoked upon termination of this Agreement in accordance with its terms. Each Stockholder agrees, from the date hereof until the Expiration Time, not to attempt to revoke, frustrate the exercise of, or challenge the validity of, the irrevocable proxy granted pursuant to this Section 2.4. 3 III. REPRESENTATIONS AND WARRANTIES Section 3.1 Representations and Warranties of Stockholders. The Stockholders, severally and not jointly, represent and warrant to the Purchaser Parties as of the date of this Agreement and at all times during the term of this Agreement, as follows: (a) Each Stockholder has the requisite capacity and authority to execute and deliver this Agreement and to fulfill and perform such Stockholder's obligations hereunder. This Agreement has been duly and validly executed and delivered by such Stockholder and constitutes a legal, valid and binding agreement of such Stockholder enforceable by the Purchaser Parties against such Stockholder in accordance with its terms. (b) The number of Shares of Company Common Stock constituting Owned Shares of each Stockholder as of the date hereof, and the number of votes which the holder of such Shares shall be entitled to cast in respect of any matter as to which holders of Shares are entitled to cast votes, are set forth next to such Stockholder's name on Schedule A of this Agreement. Such Stockholder is the record and Beneficial Owner and has good, valid and marketable title, free and clear of any Liens (other than those arising under this Agreement), of the Owned Shares, and, except as provided in this Agreement, has full and unrestricted power to dispose of and vote all of such Stockholder's Owned Shares without the consent or approval of, or any other action on the part of any other Person, and has not granted any proxy inconsistent with this Agreement that is still effective or entered into any voting or similar agreement with respect to, such Stockholder's Owned Shares. The Owned Shares set forth next to such Stockholder's name on Schedule A hereto constitute all of the capital stock of the Company that is Beneficially Owned by such Stockholder as of the date hereof, and, except for such Stockholder's Owned Shares and the Owned Shares owned by the other Stockholders who are parties to this Agreement, such Stockholder and such Stockholder's Affiliates do not Beneficially Own or have any right to acquire (whether currently, upon lapse of time, following the satisfaction of any conditions, upon the occurrence of any event or any combination of the foregoing) any Shares or any securities convertible into Shares (including Company Stock Options). (c) Other than the filing by a Stockholder of any reports with the SEC required by Sections 13(d) or 16(a) of the Exchange Act, none of the execution and delivery of this Agreement by a Stockholder, the consummation by a Stockholder of the transactions contemplated hereby or compliance by a Stockholder with any of the provisions hereof (i) requires any consent or other Permit of, or filing with or notification to, any Governmental Entity or any other Person by such Stockholder, (ii) results in a violation or breach of, or constitutes (with or without notice or lapse of time or both) a default (or gives rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any organizational document or Contract to which such Stockholder is a party or by which such Stockholder or any of such Stockholder's properties or assets (including such Stockholder's Owned Shares) may be bound, (iii) violates any Order or Law applicable to such Stockholder or any of such Stockholder's properties or assets (including such Stockholder's Owned Shares), or (iv) results in a Lien upon any of such Stockholder's properties or assets (including such Stockholder's Owned Shares). 4 IV. ADDITIONAL COVENANTS OF THE STOCKHOLDERS Section 4.1 Waiver of Appraisal Rights. Each Stockholder hereby waives any rights of appraisal or rights of dissent from the Merger that such Stockholder may have. Section 4.2 Disclosure. Each Stockholder, severally and not jointly, hereby authorizes the Purchaser Parties and the Company to publish and disclose in any announcement or disclosure required by the SEC or other Governmental Entity such Stockholder's identity and ownership of the Owned Shares and the nature of such Stockholder's obligation under this Agreement. Section 4.3 Non-Interference; Further Assurances. Each Stockholder agrees that, prior to the termination of this Agreement, such Stockholder shall not take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing, impeding, interfering with or adversely affecting the performance by such Stockholder of its obligations under this Agreement. Each Stockholder agrees, without further consideration, to execute and deliver such additional documents and to take such further actions as necessary or reasonably requested by the Purchaser Parties to confirm and assure the rights and obligations set forth in this Agreement or to consummate the transactions contemplated by this Agreement. Section 4.4 No Solicitation. Subject to Section 6.18, each Stockholder agrees that it shall not, and shall direct its Representatives not to, directly or indirectly, (i) initiate, solicit, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, an Alternative Proposal, (ii) engage or participate in any negotiations concerning, or provide or cause to be provided any non-public information or data relating to the Company, any of its Subsidiaries, any Company Joint Venture, KMP or KMR in connection with, or have any discussions with any person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Alternative Proposal, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Alternative Proposal, (iv) approve, endorse or recommend, or propose to approve, endorse or recommend, or execute or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to any Alternative Proposal, (v) amend, terminate, waive or fail to enforce, or grant any consent under, any confidentiality, standstill or similar agreement, or (vi) resolve to propose or agree to do any of the foregoing. Each Stockholder agrees that it shall, and shall cause each of its Representatives to, immediately cease any existing solicitations, discussions or negotiations with any Person (other than the parties hereto) that has made or indicated an intention to make an Alternative Proposal. If, prior to the Expiration Time, a Stockholder receives a proposal with respect to the sale of Shares in connection with an Alternative Proposal, then such Stockholder shall promptly (and in any event within 48 hours) advise the Purchaser Parties orally and in writing of (i) any Alternative Proposal or indication or inquiry with respect to or that would reasonably be expected to lead to any Alternative Proposal, (ii) any request for non-public information relating to the Company, its Subsidiaries, a Company Joint Venture, KMP or KMR, other than requests for information in the ordinary course of business and consistent with past practice and not reasonably expected to be related to an Alternative Proposal, and (iii) any inquiry or request for discussion or negotiation regarding an Alternative 5 Proposal, including in each case the identity of the person making any such Alternative Proposal or indication or inquiry and the material terms of any such Alternative Proposal or indication or inquiry (including copies of any document or correspondence evidencing such Alternative Proposal or inquiry). Subject to applicable Law, each Stockholder agrees that it shall not, and that it shall direct its Representatives not to, directly or indirectly, (i) initiate, solicit, encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, a KMP/KMR Proposal, (ii) engage or participate in any negotiations concerning, or provide or cause to be provided any non-public information or data relating to Kinder Morgan Energy Partners, L.P. or Kinder Morgan Management, LLC in connection with, or have any discussions with any person relating to, an actual or proposed KMP/KMR Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement a KMP/KMR Proposal. For the avoidance of the doubt, the fact that the Board of Directors of the Company (or any committee thereof) shall determine that an Alternative Proposal is a Superior Proposal shall in no way affect or limit the obligations of any of the Stockholders under this Agreement, including Section 2.1 and this Section 4.4. V. TERMINATION Section 5.1 Termination. This Agreement shall terminate without further action at the Expiration Time. Section 5.2 Effect of Termination. Upon termination of this Agreement, the rights and obligations of all the parties will terminate and become void without further action by any party except for the provisions of Section 5.1, this Section 5.2 and Article VI, which will survive such termination. For the avoidance of doubt, the termination of this Agreement shall not relieve any party of liability for any willful breach of this Agreement prior to the time of termination. VI. GENERAL Section 6.1 Notices. Any notice, request, instruction or other communication under this Agreement shall be in writing and delivered by hand or overnight courier service or by facsimile, (i) if to a Stockholder, to the address set forth below such Stockholder's name on the signature page hereto, and (ii) if to the Purchaser Parties, in accordance with Section 8.7 of the Merger Agreement, or to such other Persons, addresses or facsimile numbers as may be designated in writing by the Person entitled to receive such communication as provided above. Each such communication, if to a Stockholder, will be effective (A) if delivered by hand or overnight courier service, when such delivery is made at the address specified in this Section 6.1, or (B) if delivered by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 6.1 and appropriate confirmation is received. Section 6.2 Parties in Interest. Other than with respect to the parties to this Agreement, nothing in this Agreement, express or implied, is intended to or shall confer upon any person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 6 Section 6.3 Governing Law. This Agreement shall be governed by, and construed 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 otherwise to govern this Agreement. Section 6.4 Severability. The provisions of this Agreement are severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions of this Agreement. If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision will be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of that provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction. Section 6.5 Assignment. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto, in whole or part (whether by operation of Law or otherwise), without the prior written consent of the other parties hereto and any attempt to do so shall be null and void; except that Merger Sub may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to Parent or any direct or indirect wholly-owned subsidiary of Parent. Section 6.6 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns, including without limitation in the case of each Stockholder, any trustee, executor, heir, legatee or personal representative succeeding to the ownership of (or power to vote) such Stockholder's Shares or other securities subject to this Agreement (including as a result of the death, disability or incapacity of such Stockholder). Section 6.7 Interpretation. The headings in this Agreement are for reference only and do not affect the meaning or interpretation of this Agreement. Definitions apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms. All references in this Agreement to Articles and Sections refer to Articles and Sections of this Agreement unless the context requires otherwise. The words "include," "includes" and "including" are not limiting and will be deemed to be followed by the phrase "without limitation." The phrases "herein," "hereof," "hereunder" and words of similar import shall be deemed to refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "or" shall be inclusive and not exclusive unless the context requires otherwise. Unless the context requires otherwise, any agreements, documents, instruments or Laws defined or referred to in this Agreement will be deemed to mean or refer to such agreements, documents, instruments or Laws as from time to time amended, modified or supplemented, including (i) in the case of agreements, documents or instruments, by waiver or consent and (ii) in the case of Laws, by succession of comparable successor statutes. All references in this Agreement to any particular Law will be deemed to refer also to any rules and regulations promulgated under that Law. References to a Person will refer to its predecessors and successors and permitted assigns. 7 Section 6.8 Amendments. This Agreement may not be amended except by the express written agreement signed by all of the parties to this Agreement. Section 6.9 Extension; Waiver. At any time prior to the Effective Time, the Purchaser Parties, on the one hand, and the Stockholders, on the other hand, may (i) extend the time for the performance of any of the obligations of the other party, (ii) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement or (iii) waive compliance with any of the covenants or conditions contained in this Agreement. Any agreement on the part of a party to any extension or waiver will be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise will not constitute a waiver of such rights. Section 6.10 Fees and Expenses. Except as expressly provided in this Agreement, each party is responsible for its own fees and expenses (including the fees and expenses of financial consultants, investment bankers, accountants and counsel) in connection with the entry into of this Agreement and the consummation of the transactions contemplated hereby. Section 6.11 Entire Agreement. This Agreement (together with the Equity Rollover Commitment Letter executed by each of the Stockholders and the Merger Agreement) constitutes the entire agreement and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties to this Agreement with respect to the subject matter of this Agreement. Section 6.12 Rules of Construction. The parties to this Agreement have been represented by counsel during the negotiation and execution of this Agreement and waive the application of any Laws or rule of construction providing that ambiguities in any agreement or other document will be construed against the party drafting such agreement or other document. Section 6.13 Remedies Cumulative. Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a party to this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at law or in equity. The exercise by a party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy. Section 6.14 Counterparts; Effectiveness; Execution. This Agreement may be executed in any number of counterparts, all of which are one and the same agreement. This Agreement will become effective and binding upon each Stockholder when executed by such Stockholder and the Purchaser Parties. This Agreement may be executed by facsimile signature by any party and such signature is deemed binding for all purposes hereof, without delivery of an original signature being thereafter required. Section 6.15 Specific Performance. The parties to this Agreement agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the termination of this Agreement in accordance with Article V the parties to this Agreement will be entitled to an injunction or injunctions to prevent breaches of this 8 Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. Section 6.16 Submission to Jurisdiction. Each of the parties hereto irrevocably agrees that any Legal Action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in any federal or state court located in the State of Delaware. Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 6.16, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject mater hereof, may not be enforced in or by such courts. Each of the parties hereto agrees that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.1 or in such other manner as may be permitted by applicable Laws, will be valid and sufficient service thereof. Section 6.17 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any litigation, controversy or other Legal Action directly or indirectly arising out of or relating to this Agreement or the transactions contemplated by this Agreement. Each party to this Agreement certifies and acknowledges that (i) no Representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a Legal Action, (ii) such party has considered the implications of this waiver, (iii) such party makes this waiver voluntarily and (iv) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 6.17. Section 6.18 Action in Stockholder Capacity Only. The parties acknowledge that this Agreement is entered into by each Stockholder solely in such Stockholder's capacity as the Beneficial Owner of such Stockholder's Owned Shares and nothing in this Agreement restricts or limits any action taken by such Stockholder in his capacity as a director or officer of the Company, KMP or KMR or any of their respective controlled Affiliates (but not on his own behalf as a stockholder) and the taking of any actions (or failure to act) in his 9 capacity as an officer or director of the Company, KMP or KMR or any of their respective controlled Affiliates will not be deemed to constitute a breach of this Agreement. Section 6.19 Additional Stockholders. Additional Stockholders shall become a party to this Agreement upon their execution of this Agreement. Any such additional Stockholders who become parties to this Agreement shall not affect the rights and obligations of any other party hereto. [Remainder of page intentionally left blank. Signature Page Follows.] 10 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be signed as of the date first above written. KNIGHT HOLDCO LLC By: /s/ Henry Cornell ---------------------------------- Name: Henry Cornell Title: Authorized Person 11 KNIGHT ACQUISITION CO. By: /s/Henry Cornell ---------------------------------- Name: Henry Cornell Title: Authorized Person 12 STOCKHOLDERS: /s/Richard D. Kinder --------------------------------------- Richard D. Kinder 500 Dallas St Suite 1000 Houston, TX 77002 13 SCHEDULE A BENEFICIAL OWNERSHIP OF SHARES AND COMPANY COMMON STOCK Richard D. Kinder: 23,994,827(1) shares of Company Common Stock with one vote per share. - -------- (1) Includes 250 shares held by Mr. Kinder for the account of his nephew. 14 EX-7 19 mm8-2906_sc13de720.txt 7.20 EXHIBIT 7.20 LIMITED LIABILITY COMPANY AGREEMENT OF KNIGHT HOLDCO LLC This Limited Liability Company Agreement (this "Agreement") of Knight Holdco LLC, dated and effective as of August 28, 2006, is entered into by 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 Goldman Sachs 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 Richard D. Kinder (the "Management Group Member" and, together with the Investor Members, the "Members"). WHEREAS, Knight Holdco LLC, a Delaware limited liability company (the "Company"), Knight Acquisition Co., a Kansas corporation and wholly owned subsidiary of the Company ("Merger Sub"), and Kinder Morgan, Inc., a Kansas corporation ("Kinder Morgan") are, concurrently with the execution of this Agreement, entering into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which Merger Sub will be merged with and into Kinder Morgan, with Kinder Morgan surviving that merger on the terms and subject to the conditions set forth in the Merger Agreement (the "Transaction"); and WHEREAS, the Company and the Management Group Member are, concurrently with the execution of this Agreement, entering into a voting agreement (the "Voting Agreement"), pursuant to which the Management Group Member agrees, subject to the terms and conditions set forth therein, to vote certain Shares (as defined in the Voting Agreement) in favor of the adoption of the Merger Agreement. NOW, THEREFORE, the Members, by execution of this Agreement, hereby form a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. ss. 18-101, et seq.), as amended from time to time (the "Act"), and hereby agree as follows: ARTICLE I DEFINITIONS 1.1. Definitions. When capitalized in this Agreement, the terms set forth in this Article have the following definitions (capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement): (a) "Equity Commitment Letters" means the letters from each of the Investor Members to the Company, dated as of the date of this Agreement, pursuant to which each of the Investor Members has committed, subject to the terms thereof, to provide or cause to be provided the cash amounts set forth therein. (b) "Equity Commitments" means the amounts set forth next to each Member's name on Exhibit A hereto, that such Member has committed to provide to the Company pursuant to and subject to the terms contained in such Member's Equity Commitment Letter or Equity Rollover Commitment Letter, as applicable. (c) "Equity Rollover Commitment Letter" means the letter from Richard D. Kinder, dated as of the date of this Agreement, pursuant to which Richard D. Kinder has committed to contribute to the Company the number of shares of Kinder Morgan common stock set forth therein. (d) "Guarantee" means the guarantee letter, dated as of the date of this Agreement, delivered by certain of the Investor Members or their affiliates to Kinder Morgan. (e) "Majority Equity" means the Members (other than any Terminating Investor Member or Failing Member) whose aggregate Equity Commitments represent a majority of the Equity Commitments of the Members (other than any Terminating Investor Member or Failing Member). (f) "Majority Investor Members" means Investor Members (other than any Terminating Investor Member or Failing Member) whose aggregate Equity Commitments represent a majority of the Equity Commitments of the Investor Members (other than any Terminating Investor Member or Failing Member). (g) "Majority Members" means the Management Group Member (other than a Failing Member) and the Majority Investor Members. ARTICLE II ORGANIZATIONAL MATTERS 2.1. Name. The name of the limited liability company formed hereby is Knight Holdco LLC (the "Company"). 2.2. Certificates. Henry Cornell is hereby designated as an "authorized person" within the meaning of the Act, and has executed, delivered and filed the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware his powers as an "authorized person" ceased, and each Member thereupon became a designated "authorized person" and shall continue as a designated "authorized person" within the meaning of the Act. Subject to Article IV, a Member, as an authorized person within the meaning of the Act, shall execute, deliver and file, or cause the execution, delivery and filing of, all certificates (and any amendments and/or restatements thereof) required or permitted by the Act to be filed with the Secretary of State of the State of Delaware. Subject to Article IV, a Member shall execute, deliver and file, or cause the execution, delivery and filing of, any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in any other jurisdiction in which the Company may wish to conduct business. 2 2.3. Purposes. The purpose and business of the Company is to enter into the Transaction. 2.4. Powers. Except as otherwise provided in this Agreement, the Act or any other applicable laws and regulations, the Company shall have the power and authority to take any and all actions that are necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes described herein. 2.5. Principal Business Office. The principal business office of the Company shall be located at such location as may hereafter be determined by the Members. 2.6. Registered Office. The address of the Company's registered office in Delaware is c/o the Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808. 2.7. Registered Agent. The name and address of the registered agent in Delaware for service of process are the Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808. 2.8. Members. The names and mailing addresses of the Members, and their respective capital contributions, are as follows: 3 - ------------------------------------ ---------------------------- -------------- Capital Name Address Contribution - ------------------------------------ ---------------------------- -------------- GS Capital Partners V Fund, L.P. 85 Broad Street $ 0.33 New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- GS Capital Partners V Offshore 85 Broad Street $ 0.17 Fund, L.P. New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- GS Capital Partners V GmbH & CO. KG 85 Broad Street $ 0.01 New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- GS Capital Partners V Institutional, 85 Broad Street $ 0.11 L.P. New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- GS Global Infrastructure Partners I, 85 Broad Street $ 0.38 L.P. New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- The Goldman Sachs Group, Inc. 85 Broad Street $ 1.82 New York, NY 10004 USA - ------------------------------------ ---------------------------- -------------- Carlyle Partners IV, L.P. 1001 Pennsylvania Ave., NW $ 1.25 Washington, DC 20004 - ------------------------------------ ---------------------------- -------------- Carlyle/Riverstone Global Energy 712 Fifth Ave. $ 1.25 and Power Fund III, L.P. 51st Floor New York, NY 10019 - ------------------------------------ ---------------------------- -------------- AIG Knight LLC 50 Danbury Road $ 1.60 Wilton, CT 06897-4444 - ------------------------------------ ---------------------------- -------------- Richard D. Kinder 500 Dallas Street $ 3.07 Suite 1000 Houston, TX 77002 - ------------------------------------ ---------------------------- -------------- 2.9. Officers. The Majority Members may, from time to time as they deem advisable, select natural persons and designate them as officers of the Company (the "Officers") and assign titles (including, without limitation, President, Vice President, Secretary, and Treasurer) to any such person. Unless the 4 Majority Members decide otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law (the "DGCL"), the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office, except to the extent otherwise limited by this Agreement. An Officer may be removed with or without cause by the Majority Members. 2.10. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the unanimous written consent of the Members, not including the consent of the Terminating Investor Member, if any. 2.11. Effective Time. This Agreement shall become effective upon the execution of this Agreement by all of the Members and shall be effective until the earlier of (i) the consummation of the Merger under the Merger Agreement, at which time this Agreement shall be amended and restated in accordance with the Amended and Restated Limited Liability Company Agreement of Knight Holdco LLC (the "Amended LLC Agreement"), substantially in the form attached as Exhibit B hereto; provided, however, that Sections 5.7, 5.8 and 5.9 shall continue in full force and effect and be enforceable against the parties to this Agreement, and (ii) the dissolution of the Company pursuant to Section 6.3. The Members hereby agree that they shall enter into the Amended LLC Agreement upon the consummation of the Merger under the Merger Agreement. ARTICLE III CAPITALIZATION; DISTRIBUTIONS 3.1. Capital Contributions. The Members are deemed admitted as Members of the Company upon their execution and delivery of this Agreement. Each Member has contributed the amount set forth in Section 2.8. If the Majority Equity determine that the aggregate Equity Commitments of the Members shall be reduced, the Equity Commitments of each Investor Member shall be reduced pro rata based on their respective Equity Commitments. 3.2. Additional Contributions. Except to the extent provided in the Equity Commitment Letters or the Equity Rollover Commitment Letter (subject to the terms of such letters and this Agreement), a Member is not required to make any additional capital contribution to the Company, and without unanimous consent of the Members shall not make any additional capital contributions. 3.3. Distributions. With the exception of the Termination Fee, which shall be distributed as promptly as practicable upon its receipt and allocated in accordance with Section 5.6(a), distributions shall be made to the Members at the times and in the aggregate amounts determined by the Majority Members, and shall be distributed pro rata among the Members in proportion to their respective Equity Commitments. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Members on account of their interests in the Company if such distribution would violate the Act or other applicable law. 5 ARTICLE IV MEMBERS AND ACTIONS 4.1. Powers of Members. The Members shall have the power to exercise any and all rights or powers granted to the Members pursuant to the express terms of this Agreement. Members shall not have the authority to bind the Company by virtue of their status as Members. 4.2. Majority Member Decisions. (a) Except to the extent any Section of this Agreement expressly provides otherwise, the Majority Members, in consultation with all Members, shall make all decisions with respect to all actions taken by the Company or its Subsidiaries (including Merger Sub), including, but not limited to, any decision with respect to the Merger Agreement other than as set forth in Section 4.3; provided, however, that the Majority Members may not cause the Company or Merger Sub to take any action in a way that has a material disproportionate and adverse impact on an Investor Member relative to the other Investor Members without such materially disproportionately and adversely impacted Investor Member's consent, other than action set forth in this Agreement. (b) If the Majority Members have agreed to take any action under Section 4.2(a) (i) to increase or modify the amount or form of the consideration to be offered by the Members to acquire Kinder Morgan in the Transaction (such a decision, a "Change in Merger Consideration") or (ii) to modify or waive, in a manner adverse to the Company or the Investor Members, the provisions of the Merger Agreement relating to the Termination Fee or Reverse Termination Fee (any such action in (i) or (ii), a "Trigger Action"), and any Investor Member declines to consent to such Trigger Action, such Investor Member may terminate its participation in the Transaction (a "Terminating Investor Member") and shall have no obligation to contribute its proportionate share of the Equity Commitments or have any liability by reason of this Agreement, the Merger Agreement, the Equity Commitment Letters, the Guarantees or any related documents (except in respect of prior breaches, if any) other than any obligation or liability pursuant to Sections 5.5, 5.6, 5.7 and Article VI of this Agreement, whether or not the Transaction is ultimately consummated, and the Terminating Investor Member shall be released from any liability under this Agreement, the Merger Agreement, the Equity Commitment Letters, the Guarantees or any related documents, other than as set forth above; provided, however, that if the Terminating Investor Member is subsequently replaced by a new Investor Member that assumes in full the Terminating Investor Member's Equity Commitment, the Terminating Investor Member's obligation to pay its proportionate share of Aggregate Fees and Expenses (as defined below) shall also be assumed by the new Investor Member, provided further that the Terminating Investor Member's obligation to pay its proportionate share of Aggregate Fees and Expenses shall also be reduced pro rata to the extent the Terminating Investor Member's Equity Commitment is accepted by the other Investor Members or new investors pursuant to the last sentence of this Section 4.2(b). The Majority Members must provide two business days' prior written notice of their intention to approve any Trigger Action pursuant to Section 4.2(a). Upon receipt of any such notice, if an Investor Member does not provide written notice to the other Members within two business days of its intent to terminate its participation in the Transaction pursuant to this Section 4.2(b), it shall be deemed to have consented to such Trigger Action. For the avoidance of doubt, in the event an Investor Member terminates its participation in the Transaction, such Terminating Investor Member shall no longer be an Investor Member or a Member of 6 the Company, but shall remain bound by the terms of such Investor Member's confidentiality and exclusivity agreement with GS, dated May 2006. In the event an Investor Member terminates its participation in the Transaction, the amount of the Terminating Investor Member's Equity Commitment shall first be offered to the other Investor Members in proportion to their respective Equity Commitments at the time of such termination, and if none or not all of the Terminating Investor Member's Equity Commitment is accepted by the other Investor Members, then the Majority Investor Members (excluding, for this purpose, the Terminating Investor Member) may offer the Terminating Investor Member's Equity Commitment, or remaining portion thereof, to the other Investor Members or to a new investor or investors. 4.3. Majority Investor Decisions. The Majority Investor Members shall have the exclusive right to make any determination (including with respect to waivers of any conditions and determination as to satisfaction of any conditions) or decision to exercise any rights to terminate the Merger Agreement pursuant to Section 7.1 ("Termination or Abandonment") of the Merger Agreement or to waive any conditions specified under Sections 6.1 ("Conditions to Each Party's Obligation to Effect the Merger") and 6.3 ("Conditions to Obligation of Parent and Merger Sub to Effect the Merger") of the Merger Agreement, including preparatory action relating to any of the foregoing (e.g., writing of letters), which decision or termination shall be absolute and binding on the other Members and shall be exercised in the sole discretion of the Majority Investor Members. 4.4. Public Announcements. Except as otherwise required by law, including any securities laws or rules of a self-regulatory organization, the content of all public announcements concerning the Transaction issued by any Member shall be subject to the consent of all the Members, which consent shall not be unreasonably withheld. 4.5. Syndication. No Member may syndicate its Equity Commitment without the prior written consent of the Majority Equity. Notwithstanding anything to the contrary contained in this Agreement, an Investor Member may syndicate its Equity Commitment without the prior written consent of the Majority Equity to its affiliated funds, entities and investment vehicles and to co-investors where the Investor Member retains direct or indirect control over voting and disposition (a "Permitted Assignee"); provided, however, that, other than in the case of syndication by The Goldman Sachs Group, Inc., no such syndication shall relieve such Investor Member of its obligations under this Agreement and its Equity Commitment Letter. At Closing, the Members will cause their respective Permitted Assignees to enter into all documentation necessary to cause such Permitted Assignee to become a Member. 4.6. Debt Financing. All actions and decisions of the Company or Merger Sub with respect to debt financing (including with respect to existing debt commitments) shall require the approval of the Majority Equity. Without limiting the foregoing, the Majority Equity may cause the Company or Merger Sub to negotiate, enter into and borrow under definitive agreements relating to debt financing to be provided at the Closing. 4.7. Failing Members. If at the Closing, the conditions to a Member's equity financing commitment set forth in the Equity Commitment Letter or Equity Rollover Commitment Letter, as applicable, are satisfied (it being understood that any decision in accordance with Section 4.3 shall govern such determination) but such Member does not fund its commitment or asserts in 7 writing its unwillingness to fund its commitment in violation of this Agreement or its Equity Commitment Letter or Equity Rollover Commitment Letter, as applicable (a "Failing Member"), the non-Failing Members will be entitled, upon the agreement of the Majority Equity (other than the Failing Member(s)), to: (a) terminate the Failing Member's participation in the Transaction, it being understood that no such termination shall affect the other Members' rights against such Failing Member with respect to such failure or unwillingness to fund; (b) require specific performance of the provisions of such Failing Member's Equity Commitment (and/or limited guaranty, if applicable), whether before or after the Closing, together with any costs of enforcement, the Members hereby acknowledging and agreeing that irreparable damage would occur in the event such provisions were not performed in accordance with the terms therein; and/or (c) require payment by the Failing Member in an amount equal to the actual damages caused by such Failing Member (including amounts paid under any Reverse Termination Fee) up to the amount of the entire Reverse Termination Fee plus any out-of-pocket expenses incurred by the non-Failing Members in connection with the Transaction. Notwithstanding any provision in this Agreement to the contrary, no Member shall be liable for damages in excess of the sum of the Reverse Termination Fee plus out-of-pocket expenses incurred by the non-Failing Members in connection with the Transaction as a result of such Member's breach of this Agreement or such Member's Equity Commitment Letter or Equity Rollover Commitment Letter, as applicable. ARTICLE V ADDITIONAL AGREEMENTS 5.1. Regulatory Efforts. (a) If any Governmental Entity asserts any objections under any antitrust, energy or other regulatory law or regulation with respect to the Transaction in connection with Specified Regulatory Clearances (as defined in the Merger Agreement) that are conditions precedent under the Merger Agreement to the Closing and such objections relate to the activities or investments of an Investor Member or such Investor Member's affiliated funds, such Investor Member will use its reasonable best efforts to take such actions that are within its power and authority as may be necessary to resolve such objections with respect to the Transaction so as to enable the Closing to occur no later than the earlier of (x) the End Date (as defined in the Merger Agreement) and (y) the date all other conditions to Closing have been satisfied (or, if later, 90 days after the date hereof). (b) No Member shall commit to take any actions or positions on behalf of the Company with respect to obtaining a clearance or approval from any Governmental Entity for the Transaction without the approval of the Majority Equity. All Members shall make reasonable best efforts to give each Member the opportunity to participate in making any decisions as to actions or positions 8 the Company will take with respect to obtaining a clearance or approval from any Governmental Entity for the Transaction. (c) Subject to applicable law, no Member shall, and the Company will not, commit to take any actions or positions on behalf of any other Members in connection with obtaining regulatory clearances without such Member's prior consent. 5.2. Voting Agreement. All actions and decisions to be taken by the Company or Merger Sub relating to the Voting Agreement, including with respect to any waivers, extensions, amendments, enforcement actions or negotiations relating to any of the foregoing, shall be made or taken by the Majority Investor Members. 5.3. Equity Commitment Letters. Except as set forth in Section 4.7, all actions and decisions to be taken by the Company relating to any Equity Commitment Letter (other than amendment of any Equity Commitment Letter), including with respect to any waivers, extensions, amendments, enforcement actions or negotiations relating to any of the foregoing, shall be made or taken by the Majority Equity (excluding, for this purpose, the Investor Member signatory thereto). 5.4. Equity Rollover Commitment Letter. Except as set forth in Section 4.7, all actions and decisions to be taken by the Company relating to the Equity Rollover Commitment Letter, including with respect to any waivers, extensions, amendments, enforcement actions or negotiations relating to any of the foregoing, shall be made or taken by the Majority Investor Members. 5.5. Information Supplied. Each Member hereby represents, warrants and covenants to the other Members that none of the information supplied in writing by such Member for inclusion or incorporation by reference in the Proxy Statement and the Schedule 13E-3 will cause a breach of the representation and warranty of the Company or Merger Sub set forth in Section 4.3 of the Merger Agreement. 5.6. Allocation of Termination Fee. (a) Any termination fee or expense reimbursement payment paid by Kinder Morgan or any of its affiliates pursuant to the Merger Agreement (the "Termination Fee") will be applied first (i) to any out-of-pocket expenses and fees incurred by the Members in connection with the Transaction, including legal fees and fees required to be paid to the Members' financial advisor(s) in the event of a termination of the Merger Agreement but excluding fees or expenses incurred pursuant to Section 5.1, and second (ii) to the Investor Members (other than any Failing Member or Terminating Investor Member) or their designees and in proportion to their respective Equity Commitments. (b) In the event any termination fee or expense reimbursement payment is required to be paid by the Members (including as a result of any obligation by the Company and/or Merger Sub to pay such a fee or payment under the Merger Agreement) to Kinder Morgan (such fee or payment, a "Reverse Termination Fee"), the Reverse Termination Fee shall be paid by the Investor Members in proportion to their respective Equity Commitments; provided, however, that in the event the Reverse Termination Fee is payable as a result of a breach of this Agreement or such Member's Equity Commitment Letter or Equity Rollover Commitment Letter, as 9 applicable, by any Member (such Member, the "Defaulting Member"), the Defaulting Member shall pay and bear the full responsibility for payment of the Reverse Termination Fee and the Members who are not Defaulting Members (the "Non-Defaulting Members") shall not be required to pay any amount of the Reverse Termination Fee. In the event there are two or more Defaulting Members, the Defaulting Members shall be liable to pay the entire Reverse Termination Fee in proportion to the ratio of the Equity Commitment of each Defaulting Member to the Equity Commitments of the other Defaulting Member(s). 5.7. Allocation of Expenses. If the Transaction is consummated, the Company shall cause the surviving corporation (i.e., Kinder Morgan) to pay or reimburse each Member (other than a Failing Investor Member) for any and all out-of-pocket fees and expenses incurred by it in connection with the Transaction; provided, that a Terminating Investor Member shall only be entitled to be reimbursed for its fees and expenses incurred prior to such Member becoming a Terminating Investor Member. If the Transaction is not consummated, (a) each of the Investor Members (including a Failing Investor Member and a Terminating Investor Member) will be responsible for the fees and expenses of legal counsel, accountants, financial advisors and other consultants or advisors and any financing or other fees and expenses incurred by Parent or Merger Sub or by any of the Investor Members in connection with the transactions contemplated by the Merger Agreement, excluding the Management Fees and Expenses (as defined below), but including any expenses incurred in connection with due diligence and the negotiation of the Merger Agreement and any related documents and any regulatory filing fees (the "Group Fees and Expenses") in proportion to their respective Equity Commitments; provided, however, that a Terminating Investor Member shall only be responsible for its proportionate share of the Group Fees and Expenses incurred prior to such Member becoming a Terminating Investor Member, and (b) the Management Group Member shall be responsible for the fees and expenses of (i) Weil, Gotshal & Manges LLP as legal counsel to the Management Group Member and (ii) as identified in Exhibit C hereto (the "Management Fees and Expenses"). Except as provided in the first sentence of this Section 5.7, in no event shall the Investor Members be responsible for the Management Fees and Expenses. 5.8. Transaction Fee. At the Closing, the Company shall pay a transaction fee to each Investor Member (or its designees) in the amount set forth beside such Investor Member's name on Exhibit D hereto (the "Transaction Fees"). 5.9. Termination of Agreements. The Members hereby agree that upon the consummation of the Merger, the Members shall, or shall cause Kinder Morgan to, as applicable take all actions necessary to effectuate the termination of the following agreements: (i) the exclusivity agreement by and between GS and AIG, dated May 22, 2006; (ii) the exclusivity agreement by and between GS and Carlyle, dated May 22, 2006; (iii) the exclusivity agreement by and between GS and Riverstone, dated May 21, 2006; (iv) the confidentiality agreement by and between Kinder Morgan and AIG, dated June 20, 2006; (v) the confidentiality agreement by and between Kinder Morgan and Carlyle, dated June 20, 2006; (vi) the confidentiality agreement between Kinder Morgan and GS, dated June 20, 2006; (vii) the confidentiality agreement between Kinder Morgan and Riverstone, dated June 20, 2006; and (viii) the confidentiality agreements between Kinder Morgan and certain members of Kinder Morgan management, dated June 19, 2006. 10 5.10. Contributions With Respect to Guarantees. The Members shall cooperate in defending any claim with respect to which the Investor Members are or any of them is, or is alleged to be, liable to make payments under the Guarantees. Subject to Sections 4.7 and 5.6, each Investor Member agrees to contribute to the amount paid or payable by the other Investor Members in respect of the Guarantees so that each Investor Member will have paid an amount equal to the product of the aggregate amount paid under all of the Guarantees multiplied by a fraction of which the numerator is such Investor Member's Equity Commitment and the denominator is the sum of the Investor Members' Equity Commitments, which amount shall be reduced proportionately based on such Investor Members' respective Equity Commitments for any amounts paid or payable with respect to such Guarantees by any other Investor Member or other person contribution equity to the Company pursuant to the terms of such Investor Member's Equity Commitment Letter. 5.11. Allocation of Class B Units. The Management Group Member shall allocate the Class B Units (as defined in the Amended LLC Agreement), subject to the prior consent of the Majority Investor Members (such consent not to be unreasonably withheld). 5.12. Additional Rollover. The Members hereby agree that additional rollovers of Kinder Morgan Stock by stockholders shall be governed by the terms set forth on Exhibit E hereto. ARTICLE VI GENERAL PROVISIONS 6.1. Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 6.2. Assignments/Transfers. Except in connection with a syndication permitted under Section 4.5, a Member may not at any time (i) assign in whole or in part its limited liability company interest in the Company without the prior written consent of all Members or (ii) transfer in whole or in part its limited liability company interest in the Company without the prior written consent of all Members. 6.3. Dissolution. (a) The Company shall dissolve and its affairs shall be wound up upon the first to occur of the following: (i) the later of (x) the termination of the Merger Agreement by the Company or Kinder Morgan pursuant to Section 7.1 of the Merger Agreement and (y) the payment of all fees due to the Company thereunder; (ii) the unanimous written consent of the Members; (iii) at any time there are no members of the Company unless the Company is continued in accordance with the Act, or (iv) the entry of a decree of judicial dissolution under Section 18-802 of the Act. (b) The bankruptcy of a Member shall not cause such Member to cease to be a member of the Company and, upon the occurrence of such an event, the 11 business of the Company shall continue without dissolution. (c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act. (d) Upon the cancellation of the Certificate of Formation of the Company in accordance with the Act, the Company and this Agreement shall terminate. 6.4. Severability of Provisions. Each provision of this Agreement shall be considered separable, and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement that are valid, enforceable and legal. 6.5. Entire Agreement. This Agreement constitutes the entire agreement of the Members with respect to the subject matter hereof. 6.6. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws. 6.7. Amendments. This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed by all of the parties hereto. 6.8. Sole Benefit of the Members. Except as expressly provided in this Agreement, the provisions of this Agreement are intended solely to benefit the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and no Member shall have any duty or obligation to any creditor of the Company to make any contributions or payments to the Company. (signature follows) 12 IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first written above. GS CAPITAL PARTNERS V FUND, L.P. By: GSCP V Advisors, L.L.C., its General Partner By: /s/Henry Cornell ------------------------------------ Name: Henry Cornell Title: GS CAPITAL PARTNERS V INSTITUTIONAL, L.P. By: GS Advisors V, L.L.C., its General Partner By: /s/Henry Cornell ------------------------------------ Name: Henry Cornell Title: GS GLOBAL INFRASTRUCTURE PARTNERS I, L.P. By: GS Infrastructure Advisors 2006, L.L.C., its General Partner By: /s/ Joseph Martelliti ------------------------------------ Name: Joseph Martelliti Title: Vice President GS CAPITAL PARTNERS V OFFSHORE FUND, L.P. By: GSCP V Offshore Advisors, L.L.C, its General Partner By: /s/ Henry Cornell ------------------------------------ Name: Henry Cornell Title: GS CAPITAL PARTNERS V GMBH & CO. KG By: GS Advisors V, L.L.C., its Managing Partner By: /s/ Henry Cornell ------------------------------------ Name: Henry Cornell Title: THE GOLDMAN SACHS GROUP, INC. By: /s/ Elizabeth Beshel ------------------------------------ Name: Elizabeth Beshel Title: Treasurer 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: TC Group, L.L.C., its Sole Member By: TCG Holdings, L.L.C. By: /s/ Glenn A. Youngkin ------------------------------------ Name: Glenn A. Youngkin Title: 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/ Pierre F. Lapeyre, Jr. ------------------------------------ Name: Pierre F. Lapeyre, Jr. Title: Authorized Person AIG KNIGHT LLC By:/s/ James McGinnis ------------------------------------ Name: James McGinnis Title: /s/Richard D. Kinder ------------------------------------ Richard D. Kinder -----END PRIVACY-ENHANCED MESSAGE-----