Preview | Commitment Letter |

Whitehall Street Global Real Estate Limited Partnership 2005
Whitehall Street International Real Estate Limited Partnership 2005
Whitehall Street Global Employee Fund 2005 L.P.
Whitehall Street International Employee Fund 2005 (Delaware L.P.)
85 Broad Street
New York, NY 10004
Attention: Jonathan Langer


Re:		Mortgage and Mezzanine Financing (the Facility) of the Atlantis Hotel and Casino, the One & Only Ocean Club located on Paradise Island, Bahamas and certain interests in the One & Only Palmilla located in Los Cabos, Mexico (the Property)

Gentlemen:

This letter shall confirm the agreement of Column Financial, Inc. (together with its successors and permitted assigns, CFI) and German American Capital Corporation (together with its successors and permitted assigns, GACC and, together with CFI, each individually or collectively, Lender) to provide to K-Two Holdco Limited or one or more SPV bankruptcy remote entities (collectively, Borrower), to be owned, directly or indirectly, by Sol and Butch Kerzner, Whitehall Street Global Real Estate Limited Partnership 2005, Colony Capital, LLC, Providence Equity Partners Inc., Istithmar PJSC and The Related Companies and/or affiliates thereof (collectively, the Sponsors), with the Facility in an aggregate amount of up to $2,880,000,000 on the terms and conditions set forth in this letter and the Summary of Terms attached hereto (collectively, this Commitment). Pursuant to the terms of this Commitment, Lender shall provide the funding for the Facility. The Facility shall be provided by CFI (as to 50%) and GACC (as to 50%) on a pari passu basis, and with all obligations of each of CFI and GACC hereunder being on a several but not joint basis.

All terms and conditions of the Summary of Terms attached hereto as Exhibit A and constituting a part hereof (including all exhibits and schedules attached thereto) are incorporated herein by reference for purposes of the Facility and terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Summary of Terms.

A. Closing Requirements

This Commitment and the consummation of the Facility transaction are subject to the satisfaction (or waiver by Lender) of the matters described in this Commitment and in the Summary of Terms. Lender acknowledges and agrees that Lender has completed its due diligence on the Property except as expressly provided in the Schedule of Terms and Schedule 1 attached thereto.

Notwithstanding anything to the contrary contained herein, Lender shall not be required to close the Facility unless each of the conditions precedent to the closing of the Facility have been satisfied by Borrower.

This Commitment is also subject to:

- 2 -

(1) regulations, Bahamian law and all other relevant laws (including, without limitation, any competition laws) having been fully complied with;

(3) there being no breach by the Borrower of the terms of this Commitment;

(4) closing of completed documentation no later than December 29, 2006 (time in respect of which is of the essence) in form and substance acceptable to the Lender reflecting this Commitment;

(5) all financial information provided to Lender in connection with the Facility including, without limitation, any responses to due diligence inquiries, is true, accurate and complete in all material respects and supports an EBITDA for the 2006 year completed through April 30, 2006 of $83,000,000 (which excludes any deductions for management fees);

(6) in the event that Lender or its affiliate shall not have funded the Interim Term Loan Amount, there shall not have occurred a Material Adverse Effect on the Company (as defined in the Amended and Restated Agreement and Plan of Merger dated April 30, 2006 (the Merger Agreement) by and among Kerzner International Limited, K-Two Holdco Limited and K-Two Subco Limited); and

(7) the terms and provisions of the Schedule of Terms and Schedule 1 attached thereto, including, without limitation all conditions precedent to the closing of the Facility.

B. Lenders Counsel

The Loan Documents shall be prepared, and certain of the due diligence investigations outlined above shall be conducted, by Fried, Frank, Harris, Shriver & Jacobson LLP, special counsel for Lender. Lender may engage such other counsel with respect to particular aspects of the transaction as Lender deems necessary or advisable. The fees of special counsel for Lender and other counsel engaged by Lender shall be paid by the parties who accept this Commitment, and whose liability therefor shall be joint and several.

Assignment by Lender

Borrower acknowledges that Lender may (a) assign all or any part of its interest hereunder and its rights granted herein, subject only to such limitations as may be set forth in the Summary of Terms, and (b) designate any of its affiliates to perform any or all of its obligations hereunder.

D. Confidentiality

Borrower shall use reasonable efforts to keep the specific terms of this Commitment and the Summary of Terms confidential; provided, however, that Lender acknowledges that Borrower shall be permitted (and intends) to distribute this Commitment and the Summary of Terms to (x) its officers, directors, employees, accountants, attorneys and other advisors, on a need to know basis in connection with the transactions contemplated hereby and on a

- 3 -

confidential basis, (y) as reasonably required in connection with regulator matters, and (z) the Target and its advisors on a confidential basis in connection with the proposed Acquisition. Lender shall use reasonable efforts to keep the specific terms of this Commitment and the Summary of Terms confidential; provided, however, that Borrower acknowledges that Lender shall be permitted (and intends) to: (a) distribute this Commitment and the Summary of Terms, in connection with Lenders efforts to market and sell all or any part of its interest in the Loan or work toward the closing of the Loan, to (i) persons who Lender reasonably believes would be permitted to acquire any such interest as set forth in the Summary of Terms or any agents or representatives involved in such marketing, and (ii) persons who Lender reasonably believes would be permitted to serve in the capacity of a servicer; and (b) disclose the terms of this Commitment and the Summary of Terms to its agents, representatives, officers, employees, counsel and other consultants, provided that in each such case the recipient of such materials and information agrees to be bound by Lenders confidentiality obligations hereunder. Notwithstanding the foregoing, each party shall not be required to keep confidential any information which (A) was, is or becomes available to such party (or its representatives) from a source other than the other party hereto, (B) is or becomes generally available to the public, (C) was or is independently developed by the disclosing party (or its representatives), (D) is required to be filed or made public by reason of litigation or legal proceedings required in connection with this Commitment and/or (E) is required to be disclosed in order for Lender to comply with any regulatory matters or other legal obligation. The provisions of this Paragraph D shall terminate upon the Closing.

E. Expiration; Extension

Notwithstanding anything contained herein to the contrary, this Commitment shall terminate on (and be of no further force and effect after) 5:00 p.m. (ET) on December 29, 2006 (such date, as the same may be extended as provided in this Paragraph E, the Outside Date), except for (i) those provisions of this Commitment captioned Exclusivity; Break-Up Fee and Paragraph H below, and (ii) those provisions of the Summary of Terms captioned Expenses and Broker, all of which shall survive any termination or expiration of this Commitment. The Outside Date may only be extended by a written instrument executed by Lender and Borrower specifically providing for such extension. Borrower acknowledges and agrees that no course of dealing among Lender, Borrower, Sponsors and their respective counsel (including due diligence investigations or the negotiation or exchange of draft or final executed loan documents) prior to or after the Outside Date shall constitute an extension of such expiration date or otherwise form the basis of any claim against Lender.

F. Exclusivity; Break-Up Fee; Expenses

(i) Borrower certifies and agree that (A) no other commitment, term sheet, letter of intent or application or similar arrangement has been (or will be, prior to the Outside Date) executed or in effect with respect to the financing of the Property, except for (w) the loan from GE Capital in a principal amount not to exceed $14,500,000 secured by the Timeshare Units, (x) the currently contemplated $277MM construction loan facility expected to encumber the planned 495 unit condominium hotel at the Property, (y) that certain term sheet and/or commitment with Deutsche Bank and/or Goldman Sachs for a term loan facility relating to the transactions contemplated hereby, and (z) that certain term sheet and/or commitment with Lender and/or its

- 4 -

affiliates executed simultaneously herewith for a term loan and revolving credit loan (the Bank Loan); it being agreed that from and after the date hereof and Sponsors receipt of the necessary consents under the Merger Agreement, if any, Borrower and Sponsors shall terminate all such negotiations with Deutsche Bank and Goldman Sachs, and (B) as long as Sponsors obtain the necessary consents under the Merger Agreement, if any, with respect to the Loan contemplated hereby, neither Borrower nor Sponsors (nor any of their respective affiliates) will negotiate nor enter into any discussions with any other person or entity to obtain financing in substitution of the financing contemplated hereby from and after the date hereof and prior to the Outside Date. Notwithstanding anything to the contrary contained herein, Sponsors shall use commercially reasonable efforts to obtain the necessary consents under the Merger Agreement, if any, in the most expeditious manner possible after the date hereof.

(ii) Borrower hereby agrees that if the Closing does not occur on or prior to the Outside Date for any reason other than Lenders default or the failure of Borrower to satisfy a condition (unless Lender has waived such condition) after Borrower, in good faith, has used its commercially reasonable efforts to satisfy such condition, and if Borrower or any of its affiliates closes on or prior to the date that is one (1) year following the Outside Date (the Tail Expiration Date) a mortgage loan or any other facility of any kind with another lender or financing source relating to (x) directly or indirectly, any refinancing of the Interim Term Loan Amount as defined in the Commitment Letter as defined in the Senior Secured Financing Fee Letter (or a financing or refinancing the Property, in whole or in part, after the repayment of the Interim Loan Amount if such amount is repaid without debt financing), or (y) the Going Private Transaction (or a financing or refinancing the Property, in whole or in part, after the Going Private Transaction if the Going Private Transaction is completed without debt financing), then, in addition to Lender having the right to retain any unused portion of the Initial Deposit (as defined in the Summary of Terms), if any, Borrower shall pay to Lender (upon the initial funding of such other facility) an amount equal to Lenders Costs (as described in the Summary of Terms) and a break-up fee of 0.75% of the aggregate of the Facility Amount (to the extent the Facility did not close), which break-up fee shall constitute Lenders sole and liquidated damages (it being expressly acknowledged and agreed that Lenders actual damages in such instance would be impossible to determine). As used herein, Going Private Transaction means a transaction pursuant to which a new, duly formed entity owned 100% by the Sponsors acquires 100% of the issued and outstanding stock of Kerzner International Limited pursuant to a structure approved by Lender.

G. Fees and Expenses

Within five business days after the full execution and delivery of this Commitment, Borrower shall deliver to Lender a deposit of $1,500,000 (which shall constitute the Initial Deposit), which shall be effected by way of wire transfer to Lenders bank account numbered 3048-9046 at Citibank, NA.

H. Miscellaneous

(i) Borrower hereby waives any right which they may have to a trial by jury in any action brought on this Commitment or in any way connected with or related to the Loan. Subject to the final sentence of this subsection, each of Lender and Borrower hereby agrees that any legal

- 5 -

proceeding relating to this Commitment or the transactions contemplated hereby shall be maintained in a State or United States court of competent jurisdiction sitting in the City, State and County of New York, as Lender shall elect. Lender and Borrower hereby consent and submit themselves to the jurisdiction of the State and United States courts of New York for the purposes of the adjudication of such legal proceedings. The interpretation and enforcement of the parties rights and obligations under this Commitment and the Loan Documents shall be governed by New York law without giving effect to principles of conflicts of law. Notwithstanding the foregoing, the Lender and the Borrower agree that the security for the Facility and the Property may be subject to the local legal jurisdiction applicable to the situs of the Property (or each part or parts thereof), which to that extent shall prevail over the foregoing choice of jurisdiction, which is non exclusive.

(ii) This Commitment is intended for the benefit of the parties hereto and their affiliates and not for the benefit of any third parties, provided that Lender not be prevented from assigning or syndicating the benefit of this Commitment (or part or parts thereof).

(iii) The Borrower agrees to indemnify and hold harmless the Lender (and its respective directors, officers, employees and agents) (each, an Indemnified Person) against any loss, liability, cost or expense incurred in respect of this Commitment (including the reasonable fees and expenses of counsel to such Indemnified Person), except to the extent resulting directly from the gross negligence or willful misconduct of such Indemnified Person.

(iv) To the extent required for any syndication of this Commitment, the Borrower and the Sponsors shall cooperate with the Lender in the provision of such information package as the Lender shall properly require in order to enable the Lender to be able successfully to syndicate or securitize the Loan (in whole or in part). That information package will need to contain all relevant information about the Borrower, the Sponsors and their respective subsidiaries (if any) and the use to which the proceeds of this Commitment will be applied. The final version of the information package and any additional or supporting information to be provided to prospective lenders will be approved by the Borrower prior to distribution.

(v) This Commitment may be signed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. By countersigning below, Borrower agrees that the terms of this Commitment shall supersede any and all terms of any Application issued and Lender shall be released from any conditions and obligations to close the Loan except as contemplated in this Commitment.

(vi) For the purposes hereof, (y) the singular case shall include the plural and the plural the singular and (z) the terms include(s) and including shall mean include(s), without limitation, and including, without limitation, respectively.

(vii) You represent and warrant that, to the best of your knowledge, (i) no written information which has been or is hereafter furnished by you or on your behalf in connection with the transactions contemplated hereby and (ii) no other information given at information meetings or supplied or approved by you or on your behalf (such written information and other information being referred to herein collectively as the Information) taken as a whole

- 6 -

contained (or, in the case of Information furnished after the date hereof, will contain), as of the time it was (or hereafter is) furnished, any untrue statement of material fact or omitted (or will omit) as of such time to state any material fact necessary to make the statements therein taken as a whole not misleading, in the light of the circumstances under which they were (or hereafter are) made; provided that, with respect to Information consisting of statements, estimates and projections regarding the future performance of the Borrower and its subsidiaries (collectively, the Projections), no representation or warranty is made other than that the Projections have been (and, in the case of Projections furnished after the date hereof, will be) prepared in good faith based on assumptions believed to be reasonable at the time of preparation thereof (it being understood that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control and that no assurance can be given that such Projections will be realized). You agree to supplement the Information and the Projections from time to time until the date of the closing of the Facility, as appropriate, so that the representations and warranties in the preceding sentence remain correct. You understand that, in securitizing and other dispositions of the Facility, Lender will use and rely on the Information and the Projections without independent verification thereof. You represent and warrant that, to the best of your knowledge, Borrower has delivered to Lender a copy of all material documents and agreements relating to the ownership and operation of the Property and has disclosed to Lender all other matters that are material to the ownership and operation of the Property.

(viii) The parties hereby acknowledge and agree that, with respect to the Facility, CFI shall be named Lead Lender and GACC shall be named Co-Lead Lender.

I. Acceptance

If the above terms and conditions are acceptable to you, please sign this Commitment in the space provided below to evidence your agreement hereto and return the same to Lender prior to 5:00 p.m. (ET) on June 30, 2006, (with your wire transfer of $1,500,000 to the bank account stated above, constituting the Initial Deposit, to follow within five business days thereafter). Your failure to comply with the instructions set forth in the preceding sentence shall result in this Commitment becoming null and void and of no further force or effect.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

- 7 -


		Very truly yours,