Exhibit I
March 20, 2006
K-Two Holdco Limited
Coral Towers
Paradise Island, The Bahamas
Gentlemen:
Reference is made to the Agreement and Plan of Merger dated as of the
date hereof (the "Agreement") among ▇▇▇▇▇▇▇ 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. Capitalized terms used and not otherwise
defined herein have the meanings ascribed to them in the Agreement.
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 3,289,474 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
the Rollover Contribution Shares and owns such shares free and clear of any
Lien.
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
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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 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.
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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.
Very truly yours,
WORLD LEISURE GROUP LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Accepted and Agreed to
as of the date written above
K-TWO HOLDCO LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
