Commitment Letter (2007)Full Document 

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CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street

New York, New York 10013

J.P. MORGAN SECURITIES INC.
JPMORGAN CHASE BANK, N.A.
270 Park Avenue
New York, New York 10017

 

 

February 5, 2007

 

FS Acquisition Corp.

c/o Hotel Capital Advisers, Inc.

60 East 42nd Street, Suite 962

New York, New York 10165

Attention: Simon Turner

 

Four Seasons Hotels Inc.

US$950,000,000 Senior Secured Credit Facilities

Commitment Letter

 

Ladies and Gentlemen:

 

Citigroup Global Markets Inc. (“CGMI”), on behalf of Citigroup (as defined below), and J.P. Morgan Securities Inc. (“JPMorgan Securities”), on behalf of JPMorgan Chase Bank, N.A. (“JPMCB” and, together with JPMorgan Securities, “JPMorgan”; JPMorgan and Citigroup are referred to herein collectively as the “Arrangers”) are pleased to inform FS Acquisition Corp. (the “Borrower”) of their several commitments, in the respective percentages set forth below, to provide the Borrower the entire amount of a US$200,000,000 revolving credit facility (the “Revolving Facility”) and a US$750,000,000 term loan facility (the “Term Facility”; the Term Facility and the Revolving Facility, in the aggregate principal amount of US$950,000,000, collectively, the “Facilities”) and to act in the capacities set forth in this letter, subject to the terms and conditions of this letter and the attached Annex I (collectively, and together with the Fee Letter referred to below, this “Commitment Letter”).

 

The Borrower has informed us that the Borrower intends to acquire 100% of the outstanding equity interests in Four Seasons Hotels Inc. (“Four Seasons”) by way of a Plan of Arrangement under Ontario law followed by an Amalgamation under British Columbia law, as more fully defined and described in attached Annex II (collectively, the “Acquisition”). The proceeds of the Facilities will be used to finance the Acquisition, to pay transaction costs and, in the case of the Revolving Facility, to provide working capital from time to time for the Borrower and its subsidiaries and for other general corporate purposes.

 

For purposes of this Commitment Letter, “Citigroup” means CGMI, Citibank, N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as may be appropriate to consummate the transactions contemplated herein.

 

Each of CGMI and JPMorgan Securities are pleased to confirm its commitment to act as Joint Lead Arranger and Joint Book Running Manager for the Facilities; Citigroup is pleased to confirm its commitment to act as sole Administrative Agent for the Facilities; JPMCB is pleased to confirm its commitment to act as Syndication Agent for the Facilities; Citigroup is pleased to confirm its several commitment to provide 50% of each Facility (the “Citi Committed Amount”); and JPMCB is pleased to confirm its several commitment to provide 50% of each Facility (the “JPMorgan Committed Amount”). No additional agents, co-agents or arrangers will be appointed, or other titles conferred, without the consent of Citigroup; and no additional Joint Lead Arrangers or Joint Book Running Managers will be appointed without the consent of JPMorgan.

 

Section 1. Conditions Precedent. Each of the Arranger’s commitments hereunder is subject to: (i) the completion of the Acquisition, (ii) the preparation, execution and delivery of mutually acceptable loan documentation incorporating substantially the terms and conditions outlined in this Commitment Letter (the “Operative Documents”); (iii) the absence since September 30, 2006 of any Material Adverse Effect; and (iv) compliance by the Borrower with the terms of this Commitment Letter, including, without limitation, the payment in full of all fees, expenses and other amounts payable under this Commitment Letter on or prior to the Closing Date. As used herein, “Material Adverse Effect” shall mean any fact, circumstance, change, effect, matter, action, condition, event or occurrence that, individually or in the aggregate with all other facts, circumstances, changes, effects, matters, actions, conditions, events or occurrences, (a) is material and adverse to the business, affairs, assets, operations, results of operations, or financial condition of Four Seasons and its subsidiaries, taken as a whole, or (b) would materially impair or delay the consummation of the transactions contemplated by the Acquisition Agreement by Four Seasons beyond the Outside Date (as defined therein) or materially impair or delay the ability of Four Seasons to perform its obligations thereunder provided that the pendency of any litigation seeking to restrain, enjoin or otherwise prohibit the consummation of the Arrangement (as such term is defined in the Acquisition Agreement) shall be disregarded for the purpose of this clause (b), other than, in the case of either clause (a) or (b) above, any fact, circumstance, change, effect, matter, action, condition, event or occurrence resulting from (i) the announcement of the execution of the Acquisition Agreement or the transactions contemplated thereby or the performance of any obligation thereunder, (ii) changes in the U.S. or Canadian economies or securities or currency markets in general, (iii) changes generally affecting the hospitality business in one or more countries or geographic markets where Four Seasons and its subsidiaries operate or conduct business, (iv) any change in applicable Laws (as defined in the Acquisition Agreement), regulations or GAAP (as defined in the Acquisition Agreement), (v) any natural disaster, or (vi) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism, except in the case of clauses (iii), (iv), (v) and (vi) to the extent any such fact, circumstance, change, effect, matter, action, condition, event or occurrence has had a materially disproportionate effect on Four Seasons and its subsidiaries taken as a whole compared to other persons in the five-star hospitality management business in one or more countries or geographic markets so affected; provided that (x) a failure to meet any earnings estimates previously made public by Four Seasons, or (y) any decrease in the market price or any decline in the trading volume of the Limited Voting Shares (as defined in the Acquisition Agreement) on either of the Exchanges (as defined in the Acquisition Agreement) shall not, in and of itself, constitute a Material Adverse Effect; provided, however, that any fact, circumstance, change, effect, matter, action, condition, event or occurrence underlying any such decrease in market price or decline in trading volume that is not excluded pursuant to clause (i) through (vi) may be considered in determining whether there has been a Material Adverse Effect. As used herein, “Acquisition Agreement” shall mean that certain Acquisition Agreement to be dated on or about January 12, 2007 between FS Acquisition Corp. and Four Seasons.

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