June 13, 2007
To: Xxxxxx Group Acquisitions, LLC
Re: Everlast Worldwide Inc.
Gentlemen:
Reference is made to the Agreement and Plan of Merger dated as of June
1, 2007 (as it may be amended from time to time, the "MERGER AGREEMENT"), by and
among Xxxxxx Group Acquisitions, LLC, a Delaware limited liability company
("PARENT"), Xxxxxx Group Acquisitions, Inc., a Delaware corporation ("MERGER
SUB") and Everlast Worldwide Inc., a Delaware corporation (the "COMPANY"),
pursuant to which Merger Sub will be merged with and into the Company (the
"MERGER"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Merger Agreement. The undersigned and the parties to the
Equity Commitment Letters (and such other parties that enter into similar equity
commitment letters with Parent) are collectively referred to herein as the
"INVESTORS".
This letter confirms the commitment of the undersigned, subject to the
conditions set forth herein, to transfer, contribute and deliver to Parent
127,993 Shares in the aggregate (the "ROLLOVER CONTRIBUTION SHARES") immediately
prior to the Effective Time in exchange for a pro rata (in kind and amount)
share of the equity of Parent based on the value of the aggregate equity
commitments of all the Investors and assuming that the value of each Rollover
Contribution Share is equal to the Merger Consideration (such share of the
equity of Parent, the "SUBJECT EQUITY SECURITIES"). The undersigned's obligation
to transfer, contribute and deliver the Rollover Contribution Shares to Parent
is subject to the satisfaction or waiver by Parent (in the manner agreed by the
Investors) of the conditions precedent to Parent's and Xxxxxx Sub's obligation
to effect the Closing and the terms of this letter, and will occur
contemporaneously with the Closing and immediately prior to the Effective Time
and the simultaneous issuance to the undersigned of the Subject Equity
Securities.
The undersigned's obligation to transfer, contribute and deliver the
Rollover Contribution Shares will terminate automatically and immediately upon
the earliest to occur of (a) termination of the Merger Agreement, (b) if the The
Xxxxxx Group, LLC ("XXXXXX") agrees to terminate this letter and the
corresponding letters delivered by each of the Investors, and (c) the Company or
any of its Affiliates asserts in any litigation or other proceeding any claim
under any limited guarantee of even date herewith of any Investor (each, a
"LIMITED GUARANTEE") or otherwise against any Investor or any Affiliate thereof
in connection with the Merger Agreement or any of the transactions contemplated
hereby or thereby (other than any claim relating to a breach or seeking to
prevent a breach of the Confidentiality Agreement).
The undersigned's obligation to transfer, contribute and deliver the
Rollover Contribution Shares may not be assigned, except as permitted in this
paragraph. The undersigned may assign all or a portion of its obligations to
transfer, contribute and deliver the Rollover Contribution Shares to its
Affiliates or any heir, legatees, beneficiaries and or/devisees of any
individual who is an Affiliate of the undersigned; PROVIDED, HOWEVER that,
except to the extent otherwise agreed
to by Parent, any such assignment shall not relieve the undersigned of its
obligations under this letter.
This letter shall be binding solely on, and inure solely to the benefit
of, the undersigned and Parent and their respective successors and permitted
assigns, and nothing set forth in this letter shall be construed to confer upon
or give to any person other than the undersigned and Parent and their respective
successors and permitted assigns any benefits, rights or remedies under or by
reason of, or any rights to enforce or cause Parent to enforce, the obligation
to transfer, contribute and deliver the Rollover Contribution Shares or any
provisions of this letter.
Notwithstanding anything that may be expressed or implied in this
letter, Parent, by its acceptance of the benefits of this equity commitment,
covenants, agrees and acknowledges that no person other than the undersigned and
its successors and permitted assigns shall have any obligation hereunder and
that, notwithstanding that the undersigned or its successors or permitted
assigns 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, agent, Affiliate,
employee, general or limited partner, member, manager or stockholder of the
undersigned or any of its successors or permitted assigns or any former, current
or future director, officer, agent, Affiliate, employee, general or limited
partner, member, manager, stockholder, heir, legatee, beneficiary, devisee or
estate 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 former, current or future director, officer, agent, Affiliate,
employee, general or limited partner, member, manager or stockholder of the
undersigned or any former, current or future director, officer, agent,
Affiliate, employee, general or limited partner, member, manager, stockholder,
heir, legatee, beneficiary, devisee or estate of any of the foregoing, as such,
for any obligations of the undersigned or any of its successors or permitted
assigns 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
obligation or their creation.
This letter may only be enforced by Parent at the direction of Xxxxxx
in its sole discretion. Parent shall have no right to enforce this letter unless
directed to do so by Xxxxxx in its sole discretion. 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 entering into a voting agreement with Xxxxxx and Xxxxxx Sub,
which is a condition precedent to the effectiveness of this letter, and is
executing and delivering to the Company a Limited Guarantee related to Parent's
and Xxxxxx Sub's obligations under the Merger Agreement. The Company's remedies
against the undersigned under the Limited Guarantee shall, and are intended to
be, the sole and exclusive direct or indirect remedies available to the Company
and its Affiliates 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, assignee, heir, legatee, beneficiary, devisee or
estate of any of the foregoing in respect of any liabilities or obligations
arising under, or in connection with, the
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Merger Agreement and the transactions contemplated thereby, including in the
event Parent or Merger Sub breaches its 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 undersigned, any right, benefit or remedy of any nature whatsoever under or
by reason of this letter.
This letter may be executed in counterparts (including by facsimile).
This letter and any related dispute shall be governed by, construed and enforced
in accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that State. Each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any state or
federal court located in the Borough of Manhattan of The City of New York in the
event any dispute arises out of this letter or any of the transactions
contemplated by this letter, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction or venue by motion or other request for leave
from any such court and (c) agrees that it will not bring any action relating to
this letter or any of the transactions contemplated by this letter in any court
other than such courts sitting in the Borough of Manhattan of The City of New
York.
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.
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Very truly yours,
AQUAMARINE MASTER FUND, L.P.
By: Aquamarine GP Ltd.,
its general partner
By: /s/ Xxx Xxxxx
-------------------------
Name: Xxx Xxxxx
Title: Managing Member
Accepted and Acknowledged as of
the date first written above:
XXXXXX GROUP ACQUISITIONS, LLC
By: The Xxxxxx Group, LLC,
its member
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Member
[Rollover Letter Signature Page]
