April 30, 2006
K-Two Holdco Limited
Coral Towers
Paradise Island, The Bahamas
Gentlemen:
Reference is made to (i) the Amended and Restated Agreement and Plan
of Merger (the "Agreement"), dated as of the date hereof, among Xxxxxxx
International Limited (the "Company"), an international business company
incorporated under the laws of the Commonwealth of The Bahamas, K-Two Holdco
Limited, an international business company incorporated under the laws of the
Commonwealth of The Bahamas ("Newco"), and K-Two Subco Limited, an
international business company incorporated under the laws of the Commonwealth
of The Bahamas and a wholly-owned subsidiary of Newco and (ii) our letter to
Newco, dated as of March 20, 2006, pursuant to which, and subject to the terms
and conditions thereof, we committed to transfer, contribute and deliver to
Newco the aggregate number of Ordinary Shares set forth therein (the "Original
Commitment Letter"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Agreement.
This letter agreement shall become effective concurrently with the
execution and delivery of the Agreement by each party thereto. We and Newco
hereby covenant, agree and acknowledge that, at such time as this letter
agreement becomes effective in accordance with the immediately preceding
sentence, this letter agreement shall supersede the Original Commitment Letter
in all respects and that the Original Commitment Letter shall terminate
automatically and cease to be of any force or effect.
In the event of the satisfaction or waiver of the conditions
precedent to Newco's obligation to consummate the Merger set forth in Article
VIII of the Agreement (it being agreed for purposes of this letter agreement
that any condition precedent the satisfaction of which is dependent upon the
contribution contemplated by this paragraph and which shall become satisfied
upon the making of such contribution shall be deemed to have been satisfied),
we agree that at the Closing we will transfer, contribute and deliver to Newco
an aggregate number of 3,395,062 Ordinary Shares (the "Rollover Contribution
Shares"), which shares will be cancelled and retired in the Merger and will
not be entitled to receive the Merger Consideration. We will not be under any
obligation pursuant to the preceding sentence unless and until the conditions
precedent to Newco's obligation to consummate the Merger set forth in Article
VIII of the Agreement are satisfied or waived. We will not be under any
obligation under any circumstances to contribute or cause to be contributed to
Newco a number of Ordinary Shares in excess of the Rollover Contribution
Shares.
Notwithstanding anything that may be expressed or implied in this
letter agreement, Newco, by its acceptance of the benefits hereof, covenants,
agrees and acknowledges that, no person other than the undersigned shall have
any obligation hereunder and that, notwithstanding that the undersigned is a
partnership, no recourse hereunder or any documents or instruments delivered
in connection herewith shall be had against any current or future officer,
agent or employee of the undersigned, against any current or future general or
limited partner of the undersigned or any current or future director, officer,
employee, general or limited partner, member, Affiliate or 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 being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred
by any current or future officer, agent or employee of the undersigned or any
current or future general or limited partner of the undersigned or any current
or future director, officer, employee, general or limited partner, member,
Affiliate or assignee of any of the foregoing, as such, for any obligations of
the undersigned under this letter agreement or any documents or instruments
delivered in connection herewith or for any claim based on, in respect of or
by reason of such obligations or their creation.
World Leisure Group Limited hereby represents and warrants as
follows:
(a) The undersigned is duly organized, validly existing and in good
standing (to the extent its jurisdiction of organization recognizes the
concept of good standing) under the laws of its jurisdiction of organization.
(b) The execution, delivery and performance of this letter agreement
by the undersigned is within its powers and has been duly authorized by all
necessary action, and no other proceedings or actions on the part of the
undersigned are necessary to perform its obligations hereunder. This letter
agreement is a valid and binding obligation of the undersigned enforceable
against it in accordance with its terms, except as may be limited by any
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally or
by general principles or equity.
(c) The execution, delivery and performance by the undersigned of
this letter agreement do not and will not (i) violate the organizational
documents of the undersigned, (ii) violate any applicable Law or court or
governmental order to which the undersigned or any of its assets are subject
or (iii) require any consent or other action by any Person under, constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in any breach of or give rise to any right of
termination, cancellation, amendment or acceleration of, any right or
obligation of the undersigned.
(d) The undersigned is the record and beneficial owner of 2,895,062
of the Rollover Contribution Shares and owns such shares free and clear of any
Lien.
Xxxxxx X. Xxxxxxx hereby represents and warrants that he is the
record and beneficial owner of 500,000 of the Rollover Contribution Shares and
owns such shares free and clear of any Lien.
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In the event that the Agreement is terminated pursuant to Article IX
of the Agreement, this letter agreement shall automatically terminate and be
of no further force or effect without further action by the parties hereto on
the date that is 45 days subsequent to the termination of the Agreement if no
claim for any liability has been made hereunder prior to such 45th day
subsequent to the termination of the Agreement. If such a claim has been made
prior to such date that is 45 days subsequent to the termination of the
Agreement, this letter agreement shall terminate upon final resolution of such
claim.
We shall be entitled to assign all or a portion of our obligations
hereunder to one or more Affiliates that agree to assume our obligations
hereunder, provided that we shall remain obligated to perform our obligations
hereunder to the extent not performed by such Affiliate(s). This letter
agreement shall not be assignable by you without our prior written consent.
Notwithstanding any other term or condition of this letter
agreement, our liability under this letter agreement shall be limited to a
willful and material breach of this letter agreement and under no
circumstances shall our maximum liability for any reason, including our
willful and material breach of any of our commitments set forth herein, extend
beyond our obligation to contribute or cause to be contributed to Newco the
Rollover Contribution Shares, nor shall we be liable for any special,
indirect, or consequential damages.
If the express third party beneficiary hereof determines to enforce
the terms of this letter agreement as a result of a willful and material
breach of this letter agreement, such third party beneficiary must do so on a
pro rata basis against any other party to Equity Financing Commitments and
Equity Rollover Commitments that have willfully and materially breached their
obligations thereunder.
We acknowledge that the Company has relied on this letter agreement
and is an express third party beneficiary hereof and is entitled to enforce
obligations of the undersigned hereunder directly against the undersigned to
the full extent thereof. This letter agreement is not intended to, and does
not, confer upon any Person, other than Newco and the Company, rights or
remedies hereunder or in connection herewith. This letter agreement may be
executed in counterparts.
This letter agreement may not be terminated (except as otherwise
provided herein), amended, and no provision waived or modified, except by an
instrument in writing signed by us and Newco; provided that any termination,
amendment, waiver or modification that would reasonably be expected to be
adverse to the Company in any material respect (after taking into account any
other amendments, waivers or modifications proposed to be made to the other
Financing Commitments) shall require the consent of the Company.
This letter agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware. In addition, each
party (i) irrevocably and unconditionally consents and submits to the personal
jurisdiction of the state and federal courts of the United States of America
located in the State of Delaware solely for the purposes of any suit, action
or other proceeding between any of the parties hereto, or between any of the
parties hereto and the express third-party beneficiary hereof, arising out of
this letter agreement, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other
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request for leave from such court, (iii) waives any claim of improper venue or
any claim that the courts of the State of Delaware are an inconvenient forum
for any action, suit or proceeding between any of the parties hereto, or
between any of the parties hereto and the express third-party beneficiary
hereof, arising out of this letter agreement, (iv) agrees that it will not
bring any action relating to this letter agreement in any court other than the
courts of the State of Delaware and (v) to the fullest extent permitted by
Law, consents to service being made through the notice procedures set forth in
Section 10.1 of the Agreement (with the address of the undersigned being the
address set forth in the first page of this letter agreement).
EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS LETTER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.
The parties hereto shall keep the existence and terms of this letter
agreement confidential, and no party shall, without the prior approval of the
other party, make any press release or other announcement concerning the
existence or the terms of this letter agreement, except (i) as and to the
extent necessary to comply with applicable federal or state laws, (ii) in
connection with the exercise of any remedies hereunder or in any suit, action
or proceeding relating to this letter agreement or enforcement of rights
hereunder, and (iii) to the Company and its directors, officers, employees and
advisors.
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Very truly yours,
WORLD LEISURE GROUP LIMITED
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chairman
XXXXXXX XXXXXXX
/s/ Xxxxxxx Xxxxxxx
--------------------------------
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Accepted and Agreed to
as of the date written above
K-TWO HOLDCO LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
The Company hereby consents to the termination of the Original Commitment
Letter in accordance with the second paragraph of this letter agreement.
XXXXXXX INTERNATIONAL LIMITED
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Director
[Rollover Equity Letter Signature Page]
