UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 15, 2015 (December 9, 2015)

 

 

Kansas City Southern

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-4717   44-0663509

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification No.)

427 West 12th Street

Kansas City, Missouri 64105

(Address of principal executive office)(Zip Code)

(816) 983-1303

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

Indentures

On December 9, 2015, Kansas City Southern (the “Company”) issued the following series of notes: (i) Floating Rate Senior Notes due 2016 (the “Floating Rate Senior Notes”), (ii) 2.35% Senior Notes due 2020 (the “2.35% Senior Notes”), (iii) 3.85% Senior Notes due 2023 (the “3.85% Senior Notes”), (iv) 3.00% Senior Notes due 2023 (the “3.00% Senior Notes”), (v) 4.30% Senior Notes due 2043 (the “4.30% Senior Notes”) and (vi) 4.95% Senior Notes due 2045 (the “4.95% Senior Notes”) (collectively, the “KCS Notes”).

The KCS Notes were issued pursuant to an Indenture, dated December 9, 2015 (the “Base Indenture”), among the Company, the guarantors named therein (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture (the “First Supplemental Indenture”) governing the Floating Rate Senior Notes, the Second Supplemental Indenture (the “Second Supplemental Indenture”) governing the 2.35% Senior Notes, the Third Supplemental Indenture (the “Third Supplemental Indenture”) governing the 3.85% Senior Notes, the Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) governing the 3.00% Senior Notes, the Fifth Supplemental Indenture (the “Fifth Supplemental Indenture”) governing the 4.30% Senior Notes and the Sixth Supplemental Indenture (the “Sixth Supplemental Indenture” and, together with the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture, the “Supplemental Indentures”; the Base Indenture, as amended by the Supplemental Indentures, the “Indentures”) governing the 4.95% Senior Notes, each dated December 9, 2015, among the Company, the Guarantors and the Trustee.

See the discussion below under Item 2.03 for a description of the material terms and conditions of the Indentures.

Registration Rights Agreement

On December 9, 2015, the Company and the Guarantors entered into a Registration Rights Agreement with Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (the “Registration Rights Agreement”) pursuant to which the Company and the Guarantors agreed, for the benefit of the holders of the KCS Notes, at the cost of the Company, to use their commercially reasonable efforts to:

 

  •   File a registration statement with respect to a registered offer to exchange the KCS Notes for new exchange notes having terms identical in all material respects to the applicable KCS Notes (except that the exchange notes will not contain transfer restrictions); and

 

  •   Complete the registered exchange offer within 270 days after the December 9, 2015 closing date of the offering of the KCS Notes.

Promptly after the exchange registration statement has been declared effective, the Company will commence the registered exchange offer.

The above description of the Registration Rights Agreement is qualified in its entirety by the full text of the agreement, attached hereto as Exhibit 4.8.

Credit Agreement

On December 9, 2015, the Company entered into a new $800 million revolving credit facility (the “KCS Revolving Credit Facility”) pursuant to a Credit Agreement, dated December 9, 2015 (the “Credit Agreement”), among the Company, certain of its wholly-owned domestic subsidiaries named therein as guarantors, the various financial institutions and other persons from time to time parties thereto as lenders and/or issuing banks (the “Lenders”) and Bank of America, N.A., as administrative agent for the Lenders (“Agent”). The commitments of the lenders under the existing revolving credit facilities of each of The Kansas City Southern Railway Company (“KCSR”) and Kansas City Southern de México, S.A. de C.V. (“KCSM”) were terminated, and all indebtedness and other obligations outstanding thereunder were repaid in full.

The KCS Revolving Credit Facility provides the Company with a five-year $800 million revolving credit facility consisting of (i) a revolving facility in an amount up to $800 million and (ii) a standby letter of credit facility in an amount up to $25 million which shall constitute usage under the revolving facility.

The outstanding principal balance of loans under the KCS Revolving Credit Facility bear interest at floating rates. At the Company’s option, the loans bear interest at a rate equal to (i) LIBOR plus the applicable margin (which, depending on the Company’s credit ratings, will be between 1.125% to 2.00%) (the “Applicable Margin”) or (ii) the Base Rate (to be defined as the highest of (a) the federal funds rate plus  1⁄2 of 1%, (b) the Bank of America prime rate and (c) one-month LIBOR plus 1.00%) plus the Applicable Margin; provided that, with respect to the loans under the KCS Revolving Credit Facility, LIBOR shall at no time be less than zero.

Each guarantor has guaranteed repayment of the amounts due under the KCS Revolving Credit Facility.

The Company has given certain representations and warranties that are customary for credit agreements of this type. The KCS Revolving Credit Facility contains affirmative and negative covenants that are customary for credit agreements of this type, including financial maintenance covenants related to a leverage ratio and an interest coverage ratio (each as defined in the Credit Agreement).

Events of default under the KCS Revolving Credit Facility are customary for transactions of this type and include, without limitation, non-payment of obligations, breach of any representation or warranty, non-performance of covenants and obligations, default on other indebtedness, certain judgments rendered, change of control, bankruptcy or insolvency events, customary ERISA defaults and the revocation, termination, abrogation, appropriation or repudiation by any person of the Concession Title (as defined in the Credit Agreement), or abandonment of the Concession Title by KCSM. The occurrence of an event of default could result in the termination of the commitments and the acceleration of the repayment of any outstanding principal balance of the KCS Revolving Credit Facility.

The above description of the Credit Agreement is qualified in its entirety by the full text of the agreement, attached hereto as Exhibit 10.1.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

KCS Notes

The KCS Notes are unsecured and unsubordinated obligations of the Company and are unconditionally guaranteed, jointly and severally, on an unsecured senior basis, by each of the Company’s current and future domestic subsidiaries that from time to time guarantee the Credit Agreement or any other debt of the Company or any of the Company’s significant subsidiaries that is a Guarantor (the “Note Guarantees”).

The Floating Rate Senior Notes bear interest at a floating rate per annum equal to the three-month U.S. dollar LIBOR, plus 70 basis points. Interest is payable quarterly on January 28, April 28, July 28 and October 28 of each year, beginning January 28, 2016, to persons who are the registered holders of the Floating Rate Senior Notes at the close of business on the fifteenth calendar day prior to each interest payment date. The Floating Rate Senior Notes will mature on October 28, 2016. Other than following the completion of the registered exchange offer as described below, the Company may not redeem the Floating Rate Senior Notes prior to maturity.

The 2.35% Senior Notes bear interest at 2.35% per annum, and will mature on May 15, 2020. Interest on the 2.35% Senior Notes will be payable semiannually on May 15 and November 15 of each year, commencing on May 15, 2016, to the holders of record at the close of business on the immediately preceding May 1 and November 1. The Company, at its option, may redeem in whole or in part at any time and from time to time prior to April 15, 2020 (the date that is one month prior to the maturity date) at a redemption price equal to the greater of (i) 100% of the principal amount of the 2.35% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2.35% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis as set forth in the Second Supplemental Indenture. On or after April 15, 2020, the 2.35% Senior Notes may be redeemed, at the Company’s option, in whole or in part at any time and from time to time at a redemption price equal to 100% of the principal amount of 2.35% Senior Notes to be redeemed plus accrued interest to but excluding the redemption date.

The 3.85% Senior Notes bear interest at 3.85% per annum, and will mature on November 15, 2023. Interest on the 3.85% Senior Notes will be payable semiannually on May 15 and November 15 of each year, commencing on May 15, 2016, to the holders of record at the close of business on the immediately preceding May 1 and November 1. The Company, at its option, may redeem in whole or in part at any time and from time to time prior to August 15, 2023 (the date that is three months prior to the maturity date) at a redemption price equal to the greater of (i) 100% of the principal amount of the 3.85% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.85% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis as set forth in the Third Supplemental Indenture. On or after August 15, 2023, the 3.85% Senior Notes may be redeemed, at the Company’s option, in whole or in part at any time and from time to time at a redemption price equal to 100% of the principal amount of 3.85% Senior Notes to be redeemed plus accrued interest to but excluding the redemption date.

The 3.00% Senior Notes bear interest at 3.00% per annum, and will mature on May 15, 2023. Interest on the 3.00% Senior Notes will be payable semiannually on May 15 and November 15 of each year, commencing on May 15, 2016, to the holders of record at the close of business on the immediately preceding May 1 and November 1. The Company, at its option, may redeem in whole or in part at any time and from time to time prior to February 15, 2023 (the date that is three months prior to the maturity date) at a redemption price equal to the greater of (i) 100% of the principal amount of the 3.00% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.00% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis as set forth in the Fourth Supplemental Indenture. On or after February 15, 2023, the 3.00% Senior Notes may be redeemed, at the Company’s option, in whole or in part at any time and from time to time at a redemption price equal to 100% of the principal amount of 3.00% Senior Notes to be redeemed plus accrued interest to but excluding the redemption date.

The 4.30% Senior Notes bear interest at 4.30% per annum, and will mature on May 15, 2043. Interest on the 4.30% Senior Notes will be payable semiannually on May 15 and November 15 of each year, commencing on May 15, 2016, to the holders of record at the close of business on the immediately preceding May 1 and November 1. The Company, at its option, may redeem in whole or in part at any time and from time to time prior to November 15, 2042 (the date that is six months prior to the maturity date) at a redemption price equal to the greater of (i) 100% of the principal amount of the 4.30% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.30% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis as set forth in the Fifth Supplemental Indenture. On or after November 15, 2042, the 4.30% Senior Notes may be redeemed, at the Company’s option, in whole or in part at any time and from time to time at a redemption price equal to 100% of the principal amount of 4.30% Senior Notes to be redeemed plus accrued interest to but excluding the redemption date.

The 4.95% Senior Notes bear interest at 4.95% per annum, and will mature on August 15, 2045. Interest on the 4.95% Senior Notes will be payable semiannually on February 15 and August 15 of each year, commencing on February 15, 2016, to the holders of record at the close of business on the immediately preceding February 1 and August 1. The Company, at its option, may redeem in whole or in part at any time and from time to time prior to February 15, 2045 (the date that is six months prior to the maturity date) at a redemption price equal to the greater of (i) 100% of the principal amount of the 4.95% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.95% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis as set forth in the Sixth Supplemental Indenture. On or after February 15, 2045, the 4.95% Senior Notes may be redeemed, at the Company’s option, in whole or in part at any time and from time to time at a redemption price equal to 100% of the principal amount of 4.95% Senior Notes to be redeemed plus accrued interest to but excluding the redemption date.

Upon completion of the registered exchange offer with respect to a series of KCS Notes pursuant to the Registration Rights Agreement, the Company may redeem KCS Notes of such series which are not exchanged in the registered exchange offer in an amount up to 2% of the original aggregate principal amount of such series of KCS Notes issued at a redemption price of 100% of their principal amount plus accrued interest to but excluding the redemption date.

The Indentures limit the ability of (i) the Company and the Guarantors to, among other things, create or permit any lien or merge, consolidate or transfer substantially all of their assets and (ii) the Company to permit its subsidiaries that are not Guarantors to incur certain debt. In the event of a Change of Control Repurchase Event (as defined in the applicable Supplemental Indenture) with respect to a series of KCS Notes, the Company will be required to make an offer to each holder of such series of KCS Notes to repurchase all or any part of that holder’s KCS Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of such KCS Notes repurchased plus accrued interest, if any, to, but excluding, the date of repurchase.

In addition, the KCS Notes of a particular series may be declared immediately due and payable by the Trustee or the holders of at least 25% in aggregate principal amount of such KCS Notes then outstanding if any of certain events of default occur and are continuing under the Base Indenture and applicable Supplemental Indenture with respect to such series of KCS Notes. Subject to certain qualifications and applicable grace periods as set forth in the Base Indenture and applicable Supplemental Indenture, the events of default with respect to each series of KCS Notes include the following:

 

  •   the Company fails to pay the principal or any premium on a KCS Note of such series on its due date;

 

  •   the Company fails to pay interest on any KCS Note of such series within 30 days of its due date;

 

  •   the Company defaults in the performance of or breach of any covenant of the applicable Indenture and such default continues for a period of 90 days after written notice by the Trustee or the holders of 25% or more in aggregate principal amount of the KCS Notes of such series;

 

  •   certain events of bankruptcy or insolvency described in the Indentures with respect to the Company or any Guarantor;

 

  •   any Note Guarantee ceases to be in full force and effect or any Guarantor denies or disaffirms such Guarantor’s obligations under the applicable Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the holders of 25% or more in aggregate principal amount of the KCS Notes of such series; and

 

  •   the Concession Title (as defined in the Indentures) ceases to grant to KCSM the rights provided therein as of December 9, 2015 and such cessation results in a material adverse effect on the Company and its subsidiaries taken as a whole; (x) the Concession Title is for any reason terminated and not reinstated within 30 days or (y) the rights provided therein which were originally exclusive to KCSM becomes nonexclusive and the cessation of such exclusivity results in a material adverse effect on the Company and its subsidiaries taken as a whole; or the commandeering or repossession of the Northeast Rail Lines (as defined in the Indentures).

The above descriptions of the Indentures are qualified in their entirety by the full text of the Base Indenture and the Supplemental Indentures, attached hereto as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 and 4.7.

KCS Revolving Credit Facility

The information included under Item 1.01 hereof is incorporated by reference in this Item 2.03.

 

Item 8.01 Other Events.

On December 9, 2015, the Company issued a press release announcing the final results of the previously announced exchange offers for any and all outstanding notes of certain series issued by its wholly-owned subsidiaries KCSR and KCSM and the related consent solicitations. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number

   

Description

  4.1    Base Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee.
  4.2    First Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the Floating Rate Senior Notes due 2016.
  4.3    Second Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 2.35% Senior Notes due 2020.
  4.4    Third Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 3.85% Senior Notes due 2023.
  4.5    Fourth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 3.00% Senior Notes due 2023.
  4.6    Fifth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 4.30% Senior Notes due 2043.
  4.7    Sixth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 4.95% Senior Notes due 2045.
  4.8    Registration Rights Agreement, dated December 9, 2015, among the Company, the guarantors party thereto, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC.
10.1    Credit Agreement, dated December 9, 2015, among the Company, the guarantors party thereto, the various financial institutions and other persons from time to time parties thereto as lenders, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A. and Citibank, N.A., as co-syndication agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunning managers.
99.1    Press Release regarding final results of the Exchange Offers and Consent Solicitations, entry into the KCS Revolving Credit Facility and entry into KCS commercial paper program, dated December 9, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

KANSAS CITY SOUTHERN
By:  

/s/ Adam J. Godderz

Name:   Adam J. Godderz
Title:   Corporate Secretary

Date: December 15, 2015

EXHIBIT INDEX

 

Exhibit
Number

   

Description

  4.1    Base Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee.
  4.2    First Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the Floating Rate Senior Notes due 2016.
  4.3    Second Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 2.35% Senior Notes due 2020.
  4.4    Third Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 3.85% Senior Notes due 2023.
  4.5    Fourth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 3.00% Senior Notes due 2023.
  4.6    Fifth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 4.30% Senior Notes due 2043.
  4.7    Sixth Supplemental Indenture, dated December 9, 2015, among the Company, the guarantors party thereto and the Trustee, governing the 4.95% Senior Notes due 2045.
  4.8    Registration Rights Agreement, dated December 9, 2015, among the Company, the guarantors party thereto, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC.
10.1    Credit Agreement, dated December 9, 2015, among the Company, the guarantors party thereto, the various financial institutions and other persons from time to time parties thereto as lenders, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A. and Citibank, N.A., as co-syndication agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunning managers.
99.1    Press Release regarding final results of the Exchange Offers and Consent Solicitations, entry into the KCS Revolving Credit Facility and entry into KCS commercial paper program, dated December 9, 2015.


Exhibit 4.1

 

 

INDENTURE

among

KANSAS CITY SOUTHERN

as the Issuer

EACH OF THE GUARANTORS PARTY HERETO

and

U.S. BANK NATIONAL ASSOCIATION

as Trustee

 

 

Dated December 9, 2015

 

 

 

 

Table of Contents

 

     Page  

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

      1   

SECTION 1.01 Definitions

      1   

SECTION 1.02 Other Definitions

      6   

SECTION 1.03 Incorporation by Reference of TIA

      6   

SECTION 1.04 Rules of Construction

      6   

ARTICLE II THE SECURITIES

      7   

SECTION 2.01 Amount Unlimited; Issuable in Series

      7   

SECTION 2.02 Form and Dating

      9   

SECTION 2.03 Restrictive Legends

      10   

SECTION 2.04 Execution and Authentication

      11   

SECTION 2.05 Denomination and Date of Securities; Payments of Interest

      13   

SECTION 2.06 Registrar and Paying Agent

      13   

SECTION 2.07 Paying Agent to Hold Money in Trust

      13   

SECTION 2.08 Holder Lists

      14   

SECTION 2.09 Transfer and Exchange

      14   

SECTION 2.10 Book-Entry Provisions for Global Securities

      14   

SECTION 2.11 Special Transfer Provisions

      16   

SECTION 2.12 Replacement Securities

      18   

SECTION 2.13 Outstanding Securities

      19   

SECTION 2.14 Temporary Securities

      19   

SECTION 2.15 Cancellation

      20   

SECTION 2.16 CUSIP Numbers

      20   

SECTION 2.17 Series May Include Tranches

      20   

SECTION 2.18 Defaulted Interest

      20   

ARTICLE III REDEMPTION

      21   

SECTION 3.01 Applicability of Article

      21   

SECTION 3.02 Selection of Securities to Be Redeemed

      21   

SECTION 3.03 Notice of Redemption

      21   

SECTION 3.04 Effect of Notice of Redemption

      22   

SECTION 3.05 Deposit of Redemption Price

      22   

SECTION 3.06 Payment of Securities Called for Redemption

      22   

SECTION 3.07 Securities Redeemed in Part

      23   

SECTION 3.08 Mandatory and Optional Sinking Funds

      23   

ARTICLE IV COVENANTS

      23   

SECTION 4.01 Payment of Securities

      23   

SECTION 4.02 Maintenance of Office or Agency

      24   

SECTION 4.03 Notice of Defaults

      24   

SECTION 4.04 Statement as to Compliance

      24   

SECTION 4.05 Holders’ Lists

      24   

ARTICLE V SUCCESSORS

      25   

SECTION 5.01 Merger, Consolidation or Sale of Assets

      25   

SECTION 5.02 Successor Substituted

      25   

     Page  

ARTICLE VI DEFAULTS AND REMEDIES

      25   

SECTION 6.01 Events of Default

      25   

SECTION 6.02 Acceleration

      26   

SECTION 6.03 Other Remedies

      27   

SECTION 6.04 Waiver of Past Defaults

      27   

SECTION 6.05 Control by Majority

      27   

SECTION 6.06 Limitations on Suits

      27   

SECTION 6.07 Rights of Holders to Receive Payment

      28   

SECTION 6.08 Collection Suit by Trustee

      28   

SECTION 6.09 Trustee May File Proofs of Claim

      28   

SECTION 6.10 Priorities

      28   

SECTION 6.11 Undertaking for Costs

      29   

SECTION 6.12 Restoration of Rights and Remedies

      29   

SECTION 6.13 Rights and Remedies Cumulative

      29   

SECTION 6.14 Delay or Omission Not Waiver

      29   

ARTICLE VII TRUSTEE

      29   

SECTION 7.01 General

      29   

SECTION 7.02 Certain Rights of Trustee

      30   

SECTION 7.03 Individual Rights of Trustee

      31   

SECTION 7.04 Trustee’s Disclaimer

      31   

SECTION 7.05 Notice of Defaults

      31   

SECTION 7.06 Reports by Trustee to Holders

      31   

SECTION 7.07 Compensation and Indemnity

      31   

SECTION 7.08 Replacement of Trustee

      32   

SECTION 7.09 Acceptance of Appointment by Successor

      33   

SECTION 7.10 Successor Trustee by Merger, etc.

      33   

SECTION 7.11 Eligibility

      33   

SECTION 7.12 Money Held in Trust

      33   

ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE

      34   

SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance

      34   

SECTION 8.02 Legal Defeasance and Discharge

      34   

SECTION 8.03 Covenant Defeasance

      34   

SECTION 8.04 Conditions to Legal or Covenant Defeasance

      35   

SECTION 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions

      36   

SECTION 8.06 Repayment to Company

      36   

SECTION 8.07 Reinstatement

      36   

ARTICLE IX NOTE GUARANTEES

      37   

SECTION 9.01 Note Guarantee

      37   

SECTION 9.02 Limitation on Guarantor Liability

      38   

SECTION 9.03 Execution and Delivery of Guarantee

      38   

SECTION 9.04 Releases

      39   

ARTICLE X SATISFACTION AND DISCHARGE

      39   

SECTION 10.01 Satisfaction and Discharge

      39   

SECTION 10.02 Application of Trust Money

      40   

 

ii

     Page  

ARTICLE XI AMENDMENTS, SUPPLEMENTS AND WAIVERS

      40   

SECTION 11.01 Without Consent of Holders

      40   

SECTION 11.02 With Consent of Holders

      41   

SECTION 11.03 Revocation and Effect of Consent

      42   

SECTION 11.04 Notation on or Exchange of Securities

      42   

SECTION 11.05 Trustee to Sign Amendments, Etc.

      43   

SECTION 11.06 Conformity with TIA

      43   

ARTICLE XII MISCELLANEOUS

      43   

SECTION 12.01 Trust Indenture Act of 1939

      43   

SECTION 12.02 Notices

      43   

SECTION 12.03 Certificate and Opinion as to Conditions Precedent

      44   

SECTION 12.04 Statements Required in Certificate or Opinion

      44   

SECTION 12.05 Rules by Trustee and Agents

      45   

SECTION 12.06 Governing Law

      45   

SECTION 12.07 No Adverse Interpretation of Other Agreements

      45   

SECTION 12.08 No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees

      45   

SECTION 12.09 Successors

      45   

SECTION 12.10 Counterpart Originals

      45   

SECTION 12.11 Severability

      45   

SECTION 12.12 Table of Contents, Headings, Etc.

      45   

 

iii

Cross-Reference Table*

 

Trust Indenture Act Section

   

Indenture Section

310(a)(1)

    7.11

310(a)(2)

    7.11

310(a)(5)

    7.11

310(b)

    7.03; 7.08

311

    7.03

312(a)

    2.08; 4.05

313(a)

    7.06

313(b)

    7.06

313(c)

    7.05; 7.06

315(a)

    7.02

315(b)

    7.02

315(c)

    7.02

315(d)

    7.02

316(a)

    6.06; 6.08

 

* This Cross-Reference Table is not part of the Indenture.

 

iv

INDENTURE, dated as of December 9, 2015, among Kansas City Southern, the Guarantors (as defined below) and U.S. Bank National Association, as trustee.

The execution and delivery of this Indenture has been duly authorized by the Issuer and each of the Guarantors.

The Issuer, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) from time to time of the Securities (as defined below):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions.

For all purposes of this Indenture and of any indenture supplemental hereto, the following terms shall have the respective meanings set forth in this Section.

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agent” means any Registrar, co-Registrar, Paying Agent, additional Paying Agent, Calculation Agent or Authenticating Agent.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“Board of Directors” means:

(a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

(b) with respect to a partnership, the board of directors of the general partner of the partnership;

(c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

(d) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board Resolution” means one or more resolutions of the Board of Directors certified by the secretary or an assistant secretary of the Issuer to have been duly adopted and to be in full force and effect on the date of certification, and delivered to the Trustee.

“Business Day” means any calendar day that is not a Saturday, Sunday or Legal Holiday in New York, New York and on which banking institutions and trust companies are open for business in New York, New York.

“Calculation Agent” means a financial institution appointed by the Issuer to calculate the interest rate payable in respect of each interest period on any floating rate notes issued pursuant to this Indenture.

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in the equity of such Person, whether now outstanding or issued after the date hereof.

“Certificated Securities” means Securities transferred to Institutional Accredited Investors that are not QIBs to be issued and registered in certificated form without interest coupons.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the TIA, then the body performing such duties at such time.

“Company Order” means a written order signed in the name of the Issuer by one Officer, which must be the Issuer’s principal executive officer, principal financial officer, principal accounting officer or treasurer.

“Concession Title” means KCSM’s right for a period of 30 years to be the exclusive provider (subject to certain trackage rights) of freight transportation services over the Northeast Rail Lines and for an additional 20 years to be a non-exclusive provider of such services granted by the Mexican government pursuant to the Concession Title, subject in all cases to the terms and conditions of the Concession Title, as in effect on June 23, 1997.

“Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which on the date hereof is at 225 Asylum Street, 23rd Floor, Hartford, Connecticut 06103.

“Credit Agreement” means the Credit Agreement dated as of the date hereof, among the Issuer, the guarantors described therein, lenders thereunder and the other parties thereto, as amended or supplemented from time to time.

“Debt” means indebtedness for money borrowed or indebtedness evidenced by a bond, note, debenture or other evidence of indebtedness.

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, DTC or another clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any series shall mean the Depositary with respect to the Securities of such series.

“Domestic Subsidiary” means a Subsidiary of the Issuer that was formed under the laws of the United States or any state of the United States or the District of Columbia.

“DTC” means The Depository Trust Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Guarantees” means guarantees of the Guarantors containing terms identical in all material respects to the Note Guarantees of a particular series of Securities (except that such Exchange Guarantees (i) shall be registered under the Securities Act and (ii) will not contain transfer restrictions) that are issued and exchanged for such Note Guarantees pursuant to the Registration Rights Agreement and this Indenture.

 

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“Exchange Notes” means any securities of the Issuer containing terms identical in all material respects to the Securities of a particular series (except that such Exchange Notes (i) shall be registered under the Securities Act and (ii) will not contain any transfer restrictions) that are issued and exchanged for such Securities pursuant to the Registration Rights Agreement and this Indenture.

“Exchange Offer” means the exchange offer by the Issuer and the Guarantors of Exchange Securities for the Securities and the Note Guarantees of the same series.

“Exchange Securities” means Exchange Guarantees together with Exchange Notes of the same series.

“Fitch” means Fitch Ratings, Inc.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the date hereof, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) the opinions and pronouncements of the Public Company Accounting Oversight Board;

(3) statements and pronouncements of the Financial Accounting Standards Board;

(4) such other statements by such other entities as approved by a significant segment of the accounting profession; and

(5) the rules and regulations of the Commission governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the Commission.

All calculations and determinations based on GAAP contained in the Indenture shall be computed in conformity with GAAP.

“Global Securities Legend” means the legend initially set forth on the Securities in the form set forth in Section 2.03(b) hereof.

“Government Securities” means direct obligations of, obligations fully and unconditionally guaranteed by, or participation in pools consisting solely of (or repurchase transactions relating to) obligations of or obligations fully and unconditionally guaranteed by the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the option of the Issuer.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt of any other Person. The term “Guarantee” used as a verb has a corresponding meaning.

“Guarantors” means, with respect to any series of Securities issued under this Indenture, each Person that executes a Note Guarantee of such Securities, and their respective successors and assigns, in each case, until such Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

 

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“Holder” means the registered holder of any Security on the Security Register.

“Indenture” means this Indenture as originally executed and delivered or as it may be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture and shall include the forms and terms of the Securities of each series established as contemplated pursuant to Sections 2.01 and 2.02 hereof.

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.

“Issuer” means Kansas City Southern, a Delaware corporation, and its successors.

“KCSM” means Kansas City Southern de México, S. A. de C.V., a sociedad anónima de capital variable organized under the laws of the United Mexican States.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

“Moody’s” means Moody’s Investors Service, Inc.

“Northeast Rail Lines” means that portion of the Mexican railroad system that is the subject of the Concession Title.

“Note Guarantee” means, with respect to any series of Securities issued under this Indenture, the Guarantee by a Guarantor of such Securities.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Issuer or any Person listed as an attorney-in-fact in the written resolutions adopted by the shareholders of the Issuer. “Officer” of a Guarantor has a correlative meaning.

“Officer’s Certificate” means a certificate signed by any Officer.

“Opinion of Counsel” means a written opinion signed by legal counsel who may be an employee of or counsel to the Issuer.

“Periodic Offering” means an offering of Securities of a series from time to time, the specific terms of which Securities, including the rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Issuer or its agents upon the issuance of such Securities.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any other entity.

“Private Placement Legend” means the legend initially set forth on the Securities in the form set forth in Section 2.03(a) hereof.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Redemption Date” means the date fixed for the redemption of any Security by or pursuant to this Indenture or an indenture supplemental hereto.

 

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“Redemption Price” means the price at which such a Security is to be redeemed pursuant to this Indenture or an indenture supplemental hereto.

“Registration Rights Agreement” means (x) the Registration Rights Agreement, dated as of the date hereof, among the Issuer, the Guarantors and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, as dealer managers or (y) any other registration rights agreement ot be entered into in connection with any Securities.

“Registration Statement” means the Registration Statement as defined in the Registration Rights Agreement.

“Regulation S” means Regulation S under the Securities Act.

“Responsible Officer,” when used with respect to the Trustee, means any vice president, any assistant treasurer, any trust officer or assistant trust officer, or any other officer of the Trustee in its Corporate Trust Office having direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

“Rule 144A” means Rule 144A under the Securities Act.

“S&P” means Standard & Poor’s Ratings Services, a division of Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc, or any successor thereto.

“Secured Debt” means Debt secured by a lien, mortgage, pledge, charge, security interest or encumbrance of any kind on any property or assets.

“Securities Act” means the Securities Act of 1933, as amended.

“Security” or “Securities” means any securities that are authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Securities” shall include any Exchange Notes to be issued and exchanged for any Securities of the same series pursuant to the Registration Rights Agreement and this Indenture and, for purposes of this Indenture, all Securities of a series and related Exchange Notes shall vote together as one series of Securities under this Indenture.

“Significant Subsidiary” means, at any date of determination, any of the Issuer’s Subsidiaries that, together with its Subsidiaries, (i) for its most recent fiscal year, accounted for more than 10.0% of the consolidated revenues of the Issuer and its Subsidiaries or (ii) as of the end of such fiscal year, was the owner of more than 10.0% of the consolidated assets of the Issuer and its Subsidiaries, in each case as set forth on the Issuer’s most recently available consolidated financial statements for such fiscal year.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of indebtedness, the date on which the payment of interest or principal is scheduled to be paid in the documentation governing such indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any Person, any corporation, association or other business entity of which more than 50.0% of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such Person and one or more other Subsidiaries of such Person.

 

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“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

“Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of Article VII, and thereafter shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“United States Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended and as codified in Title 11 of the United States Code, as amended from time to time hereafter, or any successor federal bankruptcy law.

“U.S. Person” has the meaning ascribed thereto in Rule 902 under the Securities Act.

“Voting Stock” means, with respect to any Person, all classes of Capital Stock of such Person then outstanding and entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

SECTION 1.02 Other Definitions.

 

Term

   

Section

Agent Member    2.10
Authenticating Agent    2.04(e)
Covenant Defeasance    8.03
Event of Default    6.01
Global Securities    2.02
Legal Defeasance    8.02
Mandatory Sinking Fund Payment    3.08(a)
Offshore Global Securities    2.02
Offshore Physical Securities    2.02
Optional Sinking Fund Payment    3.08(a)
Paying Agent    2.06(a)
Physical Securities    2.02
record date    2.05(c)
Registrar    2.06(a)
Security Register    2.06(a)
Sinking Fund Payment Date    3.08(a)
tranche    2.17
U.S. Global Securities    2.02
U.S. Physical Securities    2.02

SECTION 1.03 Incorporation by Reference of TIA. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“obligor” on the Securities and the Note Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Securities and the Note Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them.

SECTION 1.04 Rules of Construction. Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

 

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(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “or” is not exclusive;

(d) words in the singular include the plural, and in the plural include the singular;

(e) “will” shall be interpreted to express a command;

(f) provisions apply to successive events and transactions;

(g) references to sections of or rules under the Securities Act and the Exchange Act will be deemed to include substitute, replacement of successor sections or rules adopted by the Commission from time to time; and

(h) the terms “includes,” “including” or similar words shall be deemed to be followed by “without limitation.”

ARTICLE II

THE SECURITIES

SECTION 2.01 Amount Unlimited; Issuable in Series.

(a) The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

(b) There shall be established in or pursuant to a Board Resolution and set forth in an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series, subject to the last sentence of this Section 2.01, any or all of the following:

(i) title and aggregate principal amount;

(ii) any applicable subordination provisions for any subordinated Securities;

(iii) whether the Securities will be secured or unsecured;

(iv) the Guarantors, if any, and the terms of any Note Guarantees (including provisions relating to seniority, subordination, security and release of any Note Guarantees);

(v) whether the Securities are exchangeable for other securities;

(vi) the price, or prices, expressed as a percentage or percentages of principal amount at which the Securities will be issued;

(vii) issue and maturity date(s);

(viii) interest rate(s) or the method for determining the interest rate(s);

(ix) dates on which interest will accrue or the method for determining dates on which interest will accrue;

(x) dates on which interest will be payable and record dates for the determination of the Holders to which interest will be payable on such payment dates;

(xi) the places where payments on the Securities will be payable;

 

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(xii) redemption or early repayment provisions;

(xiii) authorized denominations;

(xiv) form;

(xv) amount of discount or premium, if any, with which the Securities will be issued;

(xvi) whether the Securities will be issued in whole or in part in the form of one or more Global Securities, Physical Securities or Certificated Securities;

(xvii) identity of the Depositary for the Securities;

(xviii) whether a temporary Security is to be issued with respect to a series and whether any interest payable prior to the issuance of definitive Securities of the series will be credited to the account of the Persons entitled thereto;

(xix) the terms upon which beneficial interests in a temporary Global Security may be exchanged in whole or in part for beneficial interests in a definitive Global Security or for individual definitive Securities;

(xx) any covenants applicable to the particular Securities being issued;

(xxi) any Defaults and Events of Default applicable to the particular Securities being issued;

(xxii) currency, currencies or currency units in which the purchase price for, the principal of and any premium and any interest on, such Securities will be payable;

(xxiii) the time period within which, the manner in which and the terms and conditions upon which the purchaser of the Securities can select the payment currency;

(xxiv) the securities exchange(s) on which the Securities will be listed, if any;

(xxv) the Issuer’s obligation or right to redeem, purchase or repay Securities under a sinking fund, amortization or analogous provision;

(xxvi) provisions relating to covenant defeasance and legal defeasance;

(xxvii) provisions relating to satisfaction and discharge of this Indenture;

(xxviii) provisions relating to the modification of the Securities and this Indenture; and

(xxix) any other terms of the Securities of such series and Note Guarantees thereof, if any (which terms are not inconsistent with the provisions of the TIA, but may modify, amend, supplement or delete any of the terms of this Indenture with respect to the Securities of such series and Note Guarantees thereof, if any).

(c) Each Depositary designated pursuant to Section 2.01(b) must, at the time of its designation and at all times while it serves as Depositary, be either a clearing agency registered under the Exchange Act and any other applicable statute or regulation or a foreign clearing agency regulated by a foreign financial regulatory authority as defined in Section 3(a)(52) of the Exchange Act, including Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme.

(d) All Securities of any one series and coupons, if any, appertaining thereto shall be substantially identical, except (i) in the case of Global Securities, as to date and denomination, (ii) in the

 

8

case of any Periodic Offering and (iii) as otherwise may be provided by or pursuant to the Board Resolution referred to in Section 2.01(b) or as set forth in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board Resolution or in any such indenture supplemental hereto and any forms and terms of Securities to be issued from time to time may be completed and established from time to time prior to the issuance thereof by procedures described in such Board Resolution or supplemental indenture.

SECTION 2.02 Form and Dating. The Securities of each series shall be substantially in such form or forms (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law, or with any rules of any securities exchange or usage, all as may be determined by the Officer executing such Securities as evidenced by their execution of the Securities. To the extent any provisions of any Security conflict with the express provisions of this Indenture, the provisions of this Indenture shall govern and control.

Securities offered and sold in reliance on Rule 144A shall be issued in the form of one or more permanent global Securities in registered form, substantially in the form attached to an indenture supplemental hereto (the “U.S. Global Securities”), registered in the name of the nominee of the Depositary, deposited with the Trustee, as custodian for the Depositary, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the U.S. Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.

Securities offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more global Securities in registered form substantially in the form attached to an indenture supplemental hereto (the “Offshore Global Securities”), registered in the name of the nominee of the Depositary, deposited with the Trustee, as custodian for the Depositary, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Offshore Global Securities may from time to time be increased or decreased by adjustments made in the records of the Trustee, as custodian for the Depositary or its nominee, as herein provided.

Securities that are transferred to Institutional Accredited Investors which are not QIBs (other than in offshore transactions in reliance on Regulation S) shall be issued in the form of permanent Certificated Securities in registered form in substantially the form attached to an indenture supplemental hereto (the “U.S. Physical Securities”). Securities issued pursuant to Section 2.10 hereof in exchange for interests in the U.S. Global Securities shall be in the form of U.S. Physical Securities. Securities issued pursuant to Section 2.10 hereof in exchange for interests in Offshore Global Securities shall be in the form of permanent Certificated Securities in registered form in substantially in the form attached to an indenture supplemental hereto (the “Offshore Physical Securities”).

The Offshore Physical Securities and U.S. Physical Securities are sometimes collectively herein referred to as the “Physical Securities.” The U.S. Global Securities and the Offshore Global Securities are sometimes referred to as the “Global Securities.”

Physical Securities shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the Officer executing such Securities, as evidenced by its execution of such Securities.

 

9

SECTION 2.03 Restrictive Legends. (a) Unless and until a Security is exchanged for an Exchange Note in connection with an effective Registration Statement pursuant to a Registration Rights Agreement (i) the U.S. Global Securities and each U.S. Physical Security shall bear the legend set forth below on the face thereof and (ii) each Offshore Global Security and each Offshore Physical Security shall bear the legend set forth below on the face thereof, in each case until at least the expiration of the Restricted Period and receipt by the Issuer and the Trustee of a certificate substantially in the form of Exhibit A hereto:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

(1) REPRESENTS THAT:

(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,

(B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) OR

(C) IT IS NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT); AND

(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

(A) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES,

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,

(D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2) (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHED TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES,

(E) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR

(F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

10

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(F) ABOVE, THE ISSUER RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

(b) Each Global Security, whether or not an Exchange Note, shall also bear the following legend on the face thereof:

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.11 OF THE INDENTURE.

SECTION 2.04 Execution and Authentication.

(a) One Officer of the Issuer must sign the Securities and the coupons appertaining thereto, if any, by manual, facsimile or .pdf signature.

(b) If an Officer whose signature is on a Security or coupon appertaining thereto no longer holds that office at the time such Security is authenticated, such Security will nevertheless be valid.

(c) A Security will not be valid until authenticated by the manual signature of the Trustee. The Trustee’s signature will be conclusive evidence that the Security has been authenticated under this Indenture. Unless otherwise specified with respect to a series of Securities, a Security shall be dated the date of its authentication.

(d) At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series having attached thereto appropriate coupons, if any, executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, and the Trustee shall, upon receipt of a Company Order, authenticate    

 

11

such Securities for issuance under this Indenture. Such Company Order may authorize authentication and delivery pursuant to electronic instructions from the Issuer or its duly authorized agent or agents. In authenticating such Securities, the Trustee shall be entitled to receive prior to the authentication of any Securities of such series each of the following, and (subject to Article VII) shall be fully protected in relying upon, unless and until such documents have been superseded or revoked:

(i) a Board Resolution and/or executed supplemental indenture referred to in Section 2.01 and 2.02 hereof by or pursuant to which the forms and terms of the Securities of that series were established;

(ii) a Company Order;

(iii) an Officer’s Certificate stating that (A) all covenants and conditions precedent to the issuance, execution, authentication and delivery of the Securities have been complied with, (B) no Default or Event of Default has occurred and is continuing, and (C) setting forth the form or forms and terms of the Securities, stating that the form or forms and terms of the Securities of such series have been, or, in the case of a Periodic Offering, will be when established in accordance with such procedures as shall be referred to therein, established in compliance with this Indenture; and

(iv) an Opinion of Counsel substantially to the following effect, which Opinion of Counsel may contain such assumptions, qualifications and limitations as such counsel shall reasonably deem appropriate: (A) the form or forms and terms of the Securities of such series have been, or, in the case of a Periodic Offering, will be when established in accordance with such procedures as shall be referred to therein, established in compliance with this Indenture and (B) this Indenture and such Securities have been duly authorized and, if executed and authenticated in accordance with the provisions of this Indenture and delivered and duly paid for, will be entitled to the benefits of this Indenture and will constitute valid and legally binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding of equity or law).

(e) The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Securities (“Authenticating Agent”). An Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An Authenticating Agent has the same rights as an Agent to deal with Holders, the Issuer or an Affiliate of the Issuer.

(f) Notwithstanding the provisions of Section 2.02 hereof and this Section 2.04, if, in connection with a Periodic Offering, all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Board Resolution or supplemental indenture and Officer’s Certificate and Opinion of Counsel otherwise required pursuant to this Section at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued; provided that a Company Order shall be delivered in connection with each request to authenticate any Security.

(g) With respect to Securities of a series offered in a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Issuer of any of such Securities, the forms and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and the other documents delivered pursuant to this Section, as applicable, in connection with the first authentication of Securities of such series.

 

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SECTION 2.05 Denomination and Date of Securities; Payments of Interest.

(a) The Securities of each series shall be issuable in denominations established as contemplated by Section 2.01 hereof or, if not so established with respect to Securities of any series, in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the Officers of the Issuer executing the same may determine, as evidenced by the Officer’s execution thereof.

(b) The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the dates, established as contemplated by Section 2.01 hereof.

(c) The Person in whose name any Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer or exchange of such Security subsequent to the record date and prior to such interest payment date. The term “record date” as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Securities of such series established as contemplated by Section 2.01 hereof, or, if no such date is so established, the 15th day next preceding such interest payment date, whether or not such record date is a Business Day.

SECTION 2.06 Registrar and Paying Agent.

(a) The Issuer will maintain an office or agency where Securities may be presented for registration, registration of transfer or for exchange (the “Registrar”), an office or agency where Securities may be presented for payment (the “Paying Agent”) and an office or agency where notices and demands to or upon the Issuer in respect of the Securities and this Indenture may be served. The Registrar will keep a register of the Securities and the Holders thereof and of the Securities’ registration, transfer and exchange (the “Security Register”). The Issuer may appoint one or more co-Registrars and one or more additional Paying Agents. The Issuer, any Subsidiary of the Issuer or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar, or agent for service of notices and demands; provided, that neither the Issuer, any Subsidiary of the Issuer or any Affiliate of any of them shall act as Paying Agent in connection with the defeasance of the Securities or the discharge of this Indenture under Article VIII hereof.

(b) The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture and the TIA that relate to such Agent. The Issuer shall give prompt written notice to the Trustee of the name and address of any Agent and any change in the name or address of an Agent. If the Issuer fails to maintain a Registrar, Paying Agent or agent for service of notices and demands, the Trustee shall act as such Registrar, Paying Agent or agent for service of notices and demands for so long as such failure shall continue. The Issuer may remove any Agent upon written notice to such Agent and the Trustee; provided that no such removal shall become effective until (i) the acceptance of an appointment by a successor Agent to such Agent as evidenced by an appropriate agency agreement entered into by the Issuer and such successor Agent and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as such Agent until the appointment of a successor Agent in accordance with clause (i) of this proviso.

(c) The Issuer initially appoints the Trustee as Registrar and Paying Agent.

SECTION 2.07 Paying Agent to Hold Money in Trust. The Issuer shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent (i) will hold in trust for the benefit of Holders or the Trustee all money held by such Paying Agent for the payment of principal,

 

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premium or interest on the Securities and (ii) will notify the Trustee in writing of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) will have no further liability for the money so paid over. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee will automatically serve as Paying Agent for the Securities.

SECTION 2.08 Holder Lists. The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders and the Issuer shall otherwise comply with TIA § 312(a).

SECTION 2.09 Transfer and Exchange. The Securities are issuable only in registered form. A Holder may transfer a Security by written application to the Registrar stating the name of the proposed transferee and otherwise complying with the terms of this Indenture. No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, registration of the transfer by the Registrar in the Security Register. Prior to the registration of any transfer by a Holder as provided herein, the Issuer, the Guarantors, the Trustee and any agent of the Issuer or the Guarantors shall treat the Person in whose name the Security is registered as the owner thereof for all purposes whether or not the Security shall be overdue, and neither the Issuer, the Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary. Furthermore, any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by the Depositary (or its agent), and that ownership of a beneficial interest in the Security shall be required to be reflected in a book entry. When Securities are presented to the Registrar or a co-Registrar with a request to register the transfer or to exchange them for an equal principal amount of Securities of other authorized denominations of the same series (including an exchange of Securities for Exchange Notes), the Registrar shall register the transfer or make the exchange as requested if its and the Issuer’s requirements for such transactions are met; provided that no exchanges of Securities for Exchange Notes shall occur until a Registration Statement shall have been declared effective by the Commission and that any Securities that are exchanged for Exchange Notes shall be cancelled by the Trustee. To permit registrations of transfers and exchanges in accordance with the terms, conditions and restrictions hereof, the Issuer shall execute and the Trustee shall authenticate Securities at the Issuer’s written request. No service charge shall be made to any Holder for any registration of transfer or exchange or redemption of the Securities, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or other similar governmental charge payable upon transfers, exchanges or redemptions pursuant to Section 2.14, 3.08 or 11.04 hereof).

The Registrar shall not be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section 3.03 hereof and ending at the close of business on the day of such mailing or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

SECTION 2.10 Book-Entry Provisions for Global Securities. (a) The U.S. Global Securities and Offshore Global Securities initially shall (i) be registered in the name of the Depositary for such Global Securities or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear legends as set forth in Section 2.03 hereof.

 

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Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee as its custodian, or under any Global Security, and the Depositary may be treated by the Issuer, the Guarantors, the Trustee and any agent of the Issuer, the Guarantors or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Guarantors, the Trustee or any agent of the Issuer, the Guarantors or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Beneficial Owner of any Security.

(b) Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of Beneficial Owners in a Global Security may be transferred in accordance with the applicable rules and procedures of the Depositary and the provisions of Section 2.11 hereof. In addition, U.S. Physical Securities and Offshore Physical Securities shall be transferred to all Beneficial Owners in exchange for their beneficial interests in the U.S. Global Securities of the same series or the Offshore Global Securities of the same series, respectively, if (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such U.S. Global Securities or Offshore Global Securities, as the case may be, and a successor depositary is not appointed by the Issuer within 90 days of such notice or (ii) an Event of Default has occurred and is continuing and the Registrar has received a request to the foregoing effect from the Depositary.

(c) Any beneficial interest in one of the Global Securities that is transferred to a Person who takes delivery in the form of an interest in the other Global Security of the same series will, upon transfer, cease to be an interest in such Global Security and become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.

(d) In connection with any transfer pursuant to paragraph (b) of this Section 2.10 of a portion of the beneficial interests in the U.S. Global Securities of a series to Beneficial Owners who are required to hold U.S. Physical Securities of the same series, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such U.S. Global Securities in an amount equal to the principal amount of the beneficial interest in such U.S. Global Securities to be transferred, and the Issuer shall execute, and the Trustee shall authenticate and deliver, one or more U.S. Physical Securities of like tenor and amount of the same series.

(e) In connection with the transfer of the entire U.S. Global Securities or Offshore Global Securities of a series to Beneficial Owners pursuant to paragraph (b) of this Section 2.10, such U.S. Global Securities or Offshore Global Securities, as the case may be, shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and deliver, to each Beneficial Owner identified by the Depositary in exchange for its beneficial interest in such U.S. Global Securities or Offshore Global Securities, as the case may be, an equal aggregate principal amount of U.S. Physical Securities or Offshore Physical Securities of the same series, as the case may be, of authorized denominations.

(f) Any U.S. Physical Security delivered in exchange for an interest in the U.S. Global Securities of the same series pursuant to paragraph (b) or (d) of this Section 2.10 shall, except as otherwise provided by paragraph (d)(i)(x) and paragraph (e) of Section 2.11 hereof, bear the legend regarding transfer restrictions applicable to such U.S. Physical Security set forth in Section 2.03 hereof.

 

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(g) Any Offshore Physical Security delivered in exchange for an interest in the Offshore Global Securities of the same series pursuant to paragraph (b) of this Section 2.10 shall, except as otherwise provided by paragraph (e) of Section 2.11 hereof, bear the legend regarding transfer restrictions applicable to such Offshore Physical Security set forth in Section 2.03 hereof.

(h) The registered holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(i) QIBs that are Beneficial Owners of interests in a Global Security may receive Physical Securities of the same series (which shall bear the Private Placement Legend if required by Section 2.03 hereof) in accordance with the procedures of the Depositary; in connection with the execution, authentication and delivery of such Physical Securities, the Registrar shall reflect on its books and records a decrease in the principal amount of the relevant Global Security equal to the principal amount of such Physical Securities and the Issuer shall execute and the Trustee shall authenticate and deliver one or more Physical Securities of the same series having an equal aggregate principal amount.

SECTION 2.11 Special Transfer Provisions. Unless and until a Security of a series is exchanged for an Exchange Note in connection with an effective Registration Statement pursuant to a Registration Rights Agreement, the following provisions shall apply:

(a) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a U.S. Physical Security or an interest in the U.S. Global Securities to a QIB (excluding transfers outside the United States in compliance with Regulation S):

(i) If the Security of a series to be transferred consists of (x) U.S. Physical Securities of the same series, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of such Security stating, or has otherwise advised the Issuer and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of such Security stating, or has otherwise advised the Issuer and the Registrar in writing, that it is purchasing such Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A or (y) an interest in the U.S. Global Securities of the same series, the transfer of such interest may be effected only through the book-entry system maintained by the Depositary.

(ii) If the proposed transferor is an Agent Member, and the Security of a series to be transferred consists of U.S. Physical Securities of the same series, upon receipt by the Registrar of the documents referred to in clause (a)(i) of this Section 2.11 and instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the U.S. Global Securities of the same series in an amount equal to the principal amount of such U.S. Physical Securities to be transferred, and the Trustee shall cancel such Physical Security so transferred.

 

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(b) Transfers of Interests in the Offshore Global Securities or Offshore Physical Securities. The following provisions shall apply with respect to any transfer of interests in the Offshore Global Securities or Offshore Physical Securities:

(i) Prior to the expiration of the Restricted Period, the Registrar shall refuse to register such transfer unless such transfer complies with Section 2.11(a) or Section 2.11(c) hereof, as the case may be; and

(ii) After the expiration of the Restricted Period, the Registrar shall register the transfer of any such Security without any requirement to comply with Section 2.11(a) or Section 2.11(c) hereof or for any additional certification.

(c) Transfers Outside the United States in Compliance with Regulation S at Any Time. The following provisions shall apply with respect to any transfer of a U.S. Physical Security or an interest in the U.S. Global Securities to a Holder outside the United States in compliance with Regulation S:

(i) The Registrar shall register any proposed transfer of a Security outside the United States in compliance with Regulation S only upon receipt of a certificate substantially in the form of Exhibit B hereto from the proposed transferor.

(ii) (A) If the proposed transferor is an Agent Member holding a beneficial interest in the U.S. Global Securities of a series , upon receipt by the Registrar of (x) the documents required by clause (c)(i) of this Section 2.11 and (y) instructions in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such U.S. Global Securities in an amount equal to the principal amount of the beneficial interest in such U.S. Global Securities to be transferred, and (B) if the proposed transferee is an Agent Member, upon receipt by the Registrar of instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Offshore Global Securities of the same series in an amount equal to the principal amount of the U.S. Physical Securities or the U.S. Global Securities of the same series, as the case may be, to be transferred, and the Trustee shall cancel the Physical Security of the same series, if any, so transferred or decrease the amount of such U.S. Global Securities.

(d) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer of a U.S. Physical Security or an interest in the U.S. Global Securities to any Institutional Accredited Investor which is not a QIB (excluding transfers outside the United States in reliance on Regulation S):

(i) The Registrar shall register the transfer of any Security of a series, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the time period referred to in Rule 144 under the Securities Act as in effect with respect to such transfer and such request is accompanied by a certificate of the transferor to such effect, or (y) the proposed transferee has delivered to the Registrar (A) a certificate substantially in the form of Exhibit C hereto and (B) if the aggregate principal amount of the Securities of such series being transferred is less than $250,000 at the time of such transfer, and an opinion of counsel acceptable to the Issuer that such transfer is in compliance with the Securities Act.

(ii) If the proposed transferor is an Agent Member holding a beneficial interest in the U.S. Global Securities of such series, upon receipt by the Registrar of (x) the documents, if any,

 

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required by clause (d)(i) of this Section 2.11 and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of such U.S. Global Securities in an amount equal to the principal amount of the beneficial interest in such U.S. Global Securities to be transferred, and the Issuer shall execute, and the Trustee shall authenticate and deliver, one or more U.S. Physical Securities of like tenor and amount of the same series.

(e) Private Placement Legend. Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Registrar shall deliver Securities of the same series that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar shall deliver only Securities of the same series that bear the Private Placement Legend unless either (i) the circumstances contemplated by clause (d)(i)(x) of this Section 2.11 exist or (ii) there is delivered to the Issuer and the Registrar an opinion of counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither such Private Placement Legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

(f) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall not register a transfer of any Security unless such transfer complies with the restrictions on transfer of such Security set forth in this Indenture. In connection with any transfer of Securities to a Person that is not a QIB, each Holder agrees by its acceptance of such Securities to furnish the Registrar and the Issuer such certifications, legal opinions or other information as either of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act; provided that the Registrar shall not be required to determine, but may rely on a determination made by the Issuer with respect to, the sufficiency of any such certifications, legal opinions or other information.

The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.09 hereof or this Section 2.11. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

SECTION 2.12 Replacement Securities.

(a) If any mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee or the Issuer, the Issuer will issue and the Trustee, upon receipt of a Company Order, will authenticate, in exchange for such mutilated Security or in exchange for the Security to which a mutilated coupon appertains, a replacement Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding, with coupons corresponding to the coupons, if any, appertaining to such mutilated Security or to the Security to which such mutilated coupon appertains.

(b) If the Trustee or the Issuer receives evidence to its satisfaction of the destruction, loss or theft of any Security or coupon, the Issuer will issue and the Trustee, upon receipt of a Company Order, will authenticate, in lieu of any such destroyed, lost or stolen Security or in exchange for the Security to which a destroyed, lost or stolen coupon appertains (with all appurtenant coupons not destroyed, lost or stolen), a replacement Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding, with coupons corresponding to the coupons, if any, appertaining to such destroyed, lost or stolen Security or to the Security to which such destroyed, lost or stolen coupon appertains.

 

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(c) An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee and any Agent from any loss that any of them may suffer if a Security is replaced. The Issuer may charge such Holder for its expenses and the expenses of the Trustee in replacing a Security. In case any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Issuer in its discretion may pay such Security instead of issuing a new Security in replacing a Security.

(d) Every replacement Security of any series, with its coupons, if any, is an additional obligation of the Issuer and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities of the same series and their coupons, if any, duly issued hereunder.

SECTION 2.13 Outstanding Securities.

(a) The Securities outstanding at any time are all the Securities that have been authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.13 as not outstanding. A Security does not cease to be outstanding because the Issuer or one of its Affiliates holds such Security; provided, however, that, in determining whether the Holders of the requisite principal amount of the outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Issuer or any Guarantor or any Affiliate of the Issuer or any Guarantor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor of the Securities or any Affiliate of the Issuer or of such other obligor.

(b) If a Security is replaced pursuant to Section 2.12 hereof, it ceases to be outstanding unless and until the Trustee and the Issuer receive proof reasonably satisfactory to them that the replaced Security is held by a protected purchaser.

(c) If the principal amount of any Security is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

(d) If the Paying Agent (other than the Issuer or an Affiliate of the Issuer) holds on a maturity date money sufficient to pay Securities payable on that date, then on and after that date such Securities cease to be outstanding and interest on them shall cease to accrue.

SECTION 2.14 Temporary Securities. Until definitive Securities of any series are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Securities of any series. Temporary Securities of any series shall be substantially in the form of definitive Securities of such series but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Securities of such series, as evidenced by their execution of such temporary Securities. If temporary Securities of any series are issued, the Issuer will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities of any series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Issuer designated for such purpose pursuant to Section 4.02 hereof, without charge to the

 

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Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of such series of authorized denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series.

SECTION 2.15 Cancellation. The Issuer at any time may deliver to the Trustee for cancellation Securities of any series previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation Securities of any series previously authenticated hereunder which the Issuer has not issued and sold. The Registrar and the Paying Agent shall forward to the Trustee Securities of any series surrendered to them for transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for transfer, exchange, payment or cancellation and shall dispose of them in accordance with its normal procedure. The Issuer shall not issue new Securities of any series to replace Securities of such series it has paid in full or delivered to the Trustee for cancellation.

SECTION 2.16 CUSIP Numbers. The Issuer in issuing the Securities may use “CUSIP” or “ISIN” numbers (if then generally in use), and the Trustee shall use “CUSIP” or “ISIN” numbers, as the case may be, in notices of redemption or exchange as a convenience to Holders; provided that any such notice shall state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Securities. The Issuer will promptly notify the Trustee of any change in the “CUSIP” or “ISIN” numbers for the Securities.

SECTION 2.17 Series May Include Tranches. A series of Securities may include one or more tranches (each a “tranche”) of Securities, including Securities issued in a Periodic Offering. The Securities of different tranches may have one or more different terms, including authentication dates and offering prices, but all the Securities within each such tranche shall have identical terms, including authentication date and offering price. Notwithstanding any other provision of this Indenture, with respect to Sections 2.01, 2.04 (other than clauses (c) and (g) thereof), 2.05, 2.09, 2.12, 2.16, 3.01 through 3.08, 4.02, 6.01 through 6.14, 8.01 through 8.03, 8.06, 10.01, 10.02 and 11.01 through 11.04, hereof, if any series of Securities includes more than one tranche, all provisions of such sections applicable to any series of Securities shall be deemed equally applicable to each tranche of any series of Securities in the same manner as though originally designated a series unless otherwise provided with respect to such series or tranche pursuant to Section 2.01 hereof. In particular, and without limiting the scope of the next preceding sentence, any of the provisions of such sections which provide for or permit action to be taken with respect to a series of Securities shall also be deemed to provide for and permit such action to be taken instead only with respect to Securities of one or more tranches within that series (and such provisions shall be deemed satisfied thereby), even if no comparable action is taken with respect to Securities in the remaining tranches of that series.

SECTION 2.18 Defaulted Interest. If the Issuer defaults in a payment of interest on the Securities, it shall pay, or shall deposit with the Paying Agent money in immediately available funds sufficient to pay, the defaulted interest, plus (to the extent lawful) interest on the defaulted interest, to the Persons who are Holders on a subsequent special record date. A special record date, as used in this Section 2.18 with respect to the payment of any defaulted interest, shall mean the 15th day preceding the date fixed by the Issuer for the payment of defaulted interest, whether or not such day is a Business Day. At least 15 days before the subsequent special record date, the Issuer shall mail to each Holder and to the Trustee a notice that states the subsequent special record date, the payment date and the amount of defaulted interest to be paid.

 

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ARTICLE III

REDEMPTION

SECTION 3.01 Applicability of Article. The provisions of this Article III shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.01 hereof for Securities of such series.

SECTION 3.02 Selection of Securities to Be Redeemed.

If less than all of the Securities of any series are to be redeemed at any time, the Trustee shall select the Securities of such series to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which such Securities are listed, or if such Securities are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate. The Trustee shall make the selection from the Securities of the applicable series not previously called for redemption.

The Trustee shall promptly notify the Issuer in writing of the Securities selected for redemption and, in the case of any Security of a series selected for partial redemption, the principal amount thereof to be redeemed. Securities may be redeemed in principal amounts equal to authorized denominations for Securities of such series; except that if all of the Securities of a series of a Holder are to be redeemed, the entire outstanding amount of Securities of such series held by such Holder may be redeemed, even if not in the authorized denominations for such Security. Except as provided in the preceding sentence, provisions of this Indenture that apply to Securities of a series called for redemption also apply to portions of Securities of a series called for redemption.

If a Security of any series is to be redeemed in part only, the notice of redemption that relates to such Security shall state the portion of the principal amount of such Security that is to be redeemed. A new Security of the applicable series in principal amount equal to the unredeemed portion of the original Security shall be issued in the name of the Holder of the Securities of such series upon cancellation of the original Securities. Securities called for redemption become due on the Redemption Date. On and after the Redemption Date, interest ceases to accrue on Securities or portions of them called for redemption unless the Issuer defaults in making the applicable redemption payment.

SECTION 3.03 Notice of Redemption.

(a) At least 30 days but not more than 60 days before a Redemption Date, the Issuer shall mail or cause to be mailed, by first class mail or delivered electronically, a notice of redemption to each Holder whose Securities are to be redeemed at its registered address, except that redemption notices may be mailed or delivered electronically more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Securities or a satisfaction and discharge of this Indenture with respect to a series of Securities. Notices of redemption may not be conditional.

(b) The notice will identify the Securities to be redeemed and will state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) if Securities of any series are being redeemed in part, the portion of the principal amount of such Securities to be redeemed and that, after the Redemption Date upon surrender of such Securities, a new Security or Securities in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Securities;

 

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(iv) the name and address of the Paying Agent;

(v) that Securities called for redemption together with coupons appertaining thereto maturing after the Redemption Date, if any, must be surrendered to the Paying Agent to collect the Redemption Price;

(vi) that, unless the Issuer defaults in making such redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date and the only remaining right of the Holders is to receive payment of the Redemption Price plus accrued interest to the Redemption Date upon surrender of the Securities to the Paying Agent;

(vii) the paragraph of the Securities and/or section of the Officer’s Certificate or indenture supplemental hereto pursuant to which the Securities are issued pursuant to which the Securities called for redemption are being redeemed; and

(viii) that, if any Security contains a “CUSIP” or “ISIN” number as provided in Section 2.16 hereof, no representation is being made as to the correctness of the “CUSIP” or “ISIN” number either as printed on the Security or as contained in the notice of redemption and that reliance may be placed only on the other identification numbers printed on the Security.

(c) At the Issuer’s request (which request may be revoked by the Issuer at any time prior to the time at which the Trustee shall have given such notice to the Holders), made in writing to the Trustee at least 60 days (or such shorter period as shall be satisfactory to the Trustee) before a Redemption Date, the Trustee shall give the notice of redemption in the name and at the expense of the Issuer. If, however, the Issuer gives such notice to the Holders, the Issuer shall concurrently deliver to the Trustee an Officer’s Certificate stating that such notice has been given.

SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender of any Securities to the Paying Agent, such Securities shall be paid at the Redemption Price, plus accrued interest, if any, to the Redemption Date.

SECTION 3.05 Deposit of Redemption Price. Prior to 12:00 p.m. New York City time on any Redemption Date, the Issuer shall deposit with the Paying Agent (or, if the Issuer is acting as its own Paying Agent, shall segregate and hold in trust as provided in Section 2.07 hereof) money sufficient to pay the Redemption Price of and accrued interest to but excluding the Redemption Date on all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date that have been delivered by the Issuer to the Trustee for cancellation.

SECTION 3.06 Payment of Securities Called for Redemption. If notice of redemption has been given in the manner provided above, the Securities or portion of Securities specified in such notice to be redeemed shall become due and payable on the Redemption Date at the Redemption Price, together with accrued interest to such Redemption Date, and on and after such date (unless the Issuer shall default in the payment of such Securities at the Redemption Price and accrued interest to but excluding the Redemption Date, in which case the principal, until paid, shall bear interest from the Redemption Date at the rate prescribed in the Securities), such Securities shall cease to accrue interest. Upon surrender of any Security for redemption in accordance with a notice of redemption, such Security shall be paid and redeemed by the Issuer at the Redemption Price; provided that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders registered as such at the close of business on the relevant record date.

If any Security with coupons attached thereto is surrendered for redemption and is not accompanied by all appurtenant coupons maturing after the Redemption Date, the surrender of such missing coupon or coupons may be waived by the Issuer and the Trustee, if there be furnished to each of them such security or indemnity as they may require to save each of them harmless.

 

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SECTION 3.07 Securities Redeemed in Part. Upon surrender of a Security of any series that is redeemed in part, the Issuer shall issue and, upon receipt of a Company Order, the Trustee shall authenticate for the Holder at the expense of the Issuer a new Security or Securities of such series (with any unmatured coupons attached), of authorized denominations, equal in principal amount to the unredeemed portion of the Security surrendered.

SECTION 3.08 Mandatory and Optional Sinking Funds.

(a) The provisions of this Section shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified in the Officer’s Certificate or indenture supplemental hereto for such Securities. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “Mandatory Sinking Fund Payment,” and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an “Optional Sinking Fund Payment.” The date on which a sinking fund payment is to be made is herein referred to as the “Sinking Fund Payment Date.” If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in clause (b) below. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

(b) The Issuer (i) may deliver outstanding Securities of a series (other than any previously called for redemption) and (ii) may apply as a credit Securities of a series which have been redeemed either at the election of the Issuer pursuant to the terms of such Securities or through the application of permitted Optional Sinking Fund Payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

(c) Not less than 60 days prior to each Sinking Fund Payment Date for any Securities, the Issuer will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to clause (b) above and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such Sinking Fund Payment Date, the Trustee shall select the Securities to be redeemed upon such Sinking Fund Payment Date in the manner specified in Section 3.02 hereof and cause notice of the redemption thereof to be given in the name of and at the expense of the Issuer in the manner provided in Section 3.03 hereof. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03 hereof.

ARTICLE IV

COVENANTS

Unless otherwise specified as contemplated by Section 2.01, the covenants contained in this Article IV shall be applicable to the Securities of any series.

SECTION 4.01 Payment of Securities. The Issuer shall pay the principal of, premium, if any, and interest on the Securities of a series on the dates and in the manner provided in the Securities

 

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of such series and this Indenture and any indenture supplement hereto. An installment of principal, premium, if any, or interest shall be considered paid on the date due if the Trustee or Paying Agent (if the Paying Agent is a Person other than the Issuer, a Subsidiary of the Issuer or any Affiliate of any of them) holds at 12:00 p.m. New York City time on that date money designated for and sufficient to pay the installment. If the Issuer or any Subsidiary of the Issuer or any Affiliate of any of them acts as Paying Agent, an installment of principal, premium, if any, or interest shall be considered paid on the due date if the entity acting as Paying Agent complies with Section 2.07 hereof.

The Issuer shall pay interest on overdue principal of and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum specified in the Securities.

If a payment date is a not a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

SECTION 4.02 Maintenance of Office or Agency.

The Issuer will maintain an office or agency where Securities of any series may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Issuer in respect of the Securities of a series and this Indenture and an indenture supplement hereto may be served. The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 12.02 hereof.

The Issuer may also from time to time designate one or more other offices or agencies where the Securities of any series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby initially designates the office of the Trustee at 225 Asylum Street, 23rd Floor, Hartford, CT 06103 as such office of the Issuer in accordance with Section 2.06(a) hereof.

SECTION 4.03 Notice of Defaults. In the event that the Issuer become aware of any Default or Event of Default, the Issuer, promptly after it becomes aware thereof, will give written notice thereof to the Trustee.

SECTION 4.04 Statement as to Compliance. The Issuer shall deliver to the Trustee within 90 days after the end of each fiscal year of the Issuer a written statement signed by the principal executive officer, principal financial officer or principal accounting officer, the president, any vice president, the treasurer or the secretary of the Issuer, which need not constitute an Officer’s Certificate, stating that a review has been conducted of the Issuer’s activities and those of the Guarantors and of the Issuer’s and the Guarantors’ performance under this Indenture and that, to the best of such Person’s knowledge, the Issuer and the Guarantors have fulfilled all obligations hereunder (or, if there has been a Default in the fulfillment of any such obligation, specifying each such Default and the nature and status thereof).

SECTION 4.05 Holders’ Lists. The Issuer shall furnish to the Trustee at least seven Business Days before each interest payment date of a series of Securities and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of such series and the Issuer shall otherwise comply with TIA § 312(a); provided, however, that so long as the Trustee shall be the Registrar, such lists shall not be required to be furnished.

 

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ARTICLE V

SUCCESSORS

SECTION 5.01 Merger, Consolidation or Sale of Assets. Neither the Issuer nor any Guarantor will consolidate with, merge with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person or permit any Person to merge with or into the Issuer or such Guarantor unless:

(a) the Issuer or such Guarantor shall be the continuing Person, or the Person (if other than the Issuer or such Guarantor) formed by such consolidation or into which the Issuer or such Guarantor is merged or that acquired or leased such property and its assets shall be a corporation organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia (or in the case of a Guarantor, a corporation, partnership, limited liability company or similar entity organized and validly existing under the laws of the jurisdiction under which such Guarantor was organized) and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Issuer or such Guarantor under the Securities (including any supplemental indentures establishing the terms of such Securities), the Note Guarantee, this Indenture and any Registration Rights Agreement, as applicable; provided that this clause (a) shall not apply with respect to a Guarantor whose Note Guarantee is released as described in Section 9.04 hereof;

(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(c) the Issuer delivers to the Trustee an Officer’s Certificate and an Opinion of Counsel, in each case stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other deposition and such supplemental indenture complies with this Section 5.01.

SECTION 5.02 Successor Substituted. Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the property and assets of the Issuer or any Guarantor in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or into which the Issuer or any Guarantor is merged or to which such sale, assignment, conveyance, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such Guarantor under this Indenture with the same effect as if such successor Person had been named as the Issuer or such Guarantor herein.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01 Events of Default. Each of the following is an “Event of Default” with respect to the Securities of any series:

(a) default in the payment of principal of (or premium, if any, on) any Security of such series when the same becomes due at maturity, upon acceleration, redemption or otherwise;

(b) default in the payment of interest on the Securities of such series when due and such default continues for a period of 30 days;

(c) default in the performance of any covenant of the Issuer or a Guarantor in this Indenture (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Securities of such series;

 

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(d) a court having jurisdiction in the premises enters a decree or order for:

(i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,

(ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor, or

(iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor;

and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days;

(e) the Issuer or a Guarantor:

(i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law;

(ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor; or

(iii) effects any general assignment for the benefit of creditors;

(f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under this Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Securities of such series;

(g) (i) the Concession Title shall cease to grant to KCSM the rights provided therein as of the date hereof and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole,

(ii) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or

(iii) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more; and

(h) any other Event of Default established pursuant to Section 2.01 hereof with respect to the Securities of such series occurs.

SECTION 6.02 Acceleration. If an Event of Default described in Section 6.01 hereof shall have occurred and is continuing with respect to the Securities of any series then outstanding, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities of any such series that are outstanding may declare all Securities of such series outstanding to be due and payable immediately. The Holders of a majority in aggregate principal amount of the Securities of any such series

 

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then outstanding may, by notice to the Trustee, on behalf of the Holders of all of the Securities of any such series, rescind an acceleration or waive any existing Default or Event of Default and its consequences under this Indenture, except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Securities of any such series.

SECTION 6.03 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.

SECTION 6.04 Waiver of Past Defaults. Subject to Sections 6.02, 6.10 and 12.02 hereof, Holders of a majority in aggregate principal amount of the then outstanding Securities of any series affected (voting as a single class) by notice to the Trustee may on behalf of the Holders of all of the Securities of such series waive any existing Default or Event of Default and its consequences hereunder, except a Default in the payment of the principal of, premium, if any, or interest on, any Security of such series as specified in clause (a) or (b) of Section 6.01 or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Security of such series affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; provided, however, that such waiver shall not extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

SECTION 6.05 Control by Majority. The Holders of a majority in aggregate principal amount of the Securities of any series affected (voting as a single class) that are then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Securities of such series; provided that the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that may involve the Trustee in personal liability or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction; provided further that the Trustee may take any other action it deems proper that is not inconsistent with any such direction received from Holders of the Securities of such series pursuant to this Section 6.05. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or note taking such action.

SECTION 6.06 Limitations on Suits. A Holder may not institute any proceeding, judicial or other remedy, with respect to this Indenture or the Securities of any series, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(a) such Holder gives the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in aggregate principal amount of outstanding Securities of such series make a written request to the Trustee to pursue the remedy;

(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

(e) during such 60-day period, the Holders of a majority in aggregate principal amount of Securities of such affected series then outstanding do not give the Trustee a direction that is inconsistent the request.

 

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For purposes of this Section 6.06 and Section 6.08 hereof, the Trustee shall comply with TIA § 316(a) in making any determination of whether the Holders of the required aggregate principal amount of Securities of such affected series then outstanding have concurred in any request or direction of the Trustee to pursue any remedy available to the Trustee or the Holders with respect to this Indenture or the Securities of such series or otherwise under the law.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of Securities of any series to receive payment of principal of, premium, if any, or interest on such Holder’s Security on or after the respective due dates expressed on such Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

SECTION 6.08 Collection Suit by Trustee. If an Event of Default with respect to the Securities of any series in payment of principal, premium or interest specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer, a Guarantor or any other obligor of the affected Securities for the whole amount of principal, premium, if any, and accrued interest remaining unpaid, together with interest on overdue principal, premium, if any, and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate specified in such Securities, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 7.07) and the Holders allowed in any judicial proceedings relative to the Issuer, a Subsidiary of the Issuer or any Affiliate of any of them, its creditors or its property and shall be entitled and empowered to collect and receive any monies, securities or other property payable or deliverable upon conversion or exchange of the Securities or upon any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee under Section 7.07 hereof. Nothing contained herein shall be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10 Priorities. If the Trustee collects any money pursuant to this Article VI in respect of the Securities of any series, it shall pay out the money in the following order:

First: to the Trustee for all amounts due under Section 7.07 hereof with respect to such series of Securities;

 

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Second: to Holders of the Securities of the applicable series for amounts then due and unpaid for principal of, premium, if any, and interest on such Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest, respectively; and

Third: to the Issuer, or as a court of competent jurisdiction may direct.

The Trustee, upon prior written notice to the Issuer, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the Securities of such affected series then outstanding.

SECTION 6.12 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Issuer, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Issuer, the Guarantors, the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 6.13 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities in Section 2.12, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 6.14 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article VI or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

ARTICLE VII

TRUSTEE

SECTION 7.01 General. The duties and responsibilities of the Trustee shall be as provided by the TIA and as set forth herein. If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and shall use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of its own affairs. Except during the continuance of an Event of Default, the Trustee need only perform those duties as are specifically set forth in this Indenture and the Securities, and no implied duties shall be read into this Indenture against the Trustee. Notwithstanding the

 

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foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VII.

SECTION 7.02 Certain Rights of Trustee. Subject to TIA §§ 315(a) through (d):

(a) the Trustee may conclusively rely, and shall be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document;

(b) before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion;

(c) the Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care;

(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;

(e) the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers conferred upon the Trustee under this Indenture;

(f) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate;

(g) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer personally or by agent or attorney at the expense of the Issuer and shall incur no liability of any kind by reason of such inquiry or investigation;

(h) the Trustee may consult with counsel of its selection and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it thereunder in good faith and in reliance thereon;

(i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the series of the Securities affected and this Indenture; and

(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, co-trustee, custodian and other Person employed to act hereunder.

 

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SECTION 7.03 Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer or any Guarantor or any Affiliates of the Issuer or any Guarantor with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to TIA §§ 310(b) and 311.

SECTION 7.04 Trustee’s Disclaimer. The Trustee (i) makes no representation as to the validity or adequacy of this Indenture, the Note Guarantees or the Securities, (ii) shall not be accountable for the Issuer’s use or application of the proceeds from the Securities and (iii) shall not be responsible for any statement in the Note Guarantees or the Securities other than its certificate of authentication.

SECTION 7.05 Notice of Defaults. If a Default or Event of Default occurs and is continuing with respect to the Securities of any series and if it is known to a Responsible Officer of the Trustee, the Trustee will mail or deliver electronically to Holders of the Securities of such series a notice of the Default or Event of Default within 90 days after it occurs in the manner and to the extent provided in TIA § 313(c). Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on, Securities of any series, the Trustee may and shall be protected in withholding the notice if and so long as it in good faith determines that withholding the notice is in the interests of the Holders of the Securities of such series.

SECTION 7.06 Reports by Trustee to Holders. Within 60 days after each calendar year following the date of this Indenture, and for so long as Securities of any series remain outstanding, the Trustee will mail or deliver electronically to the Holders a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the 12 months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA § 313(b), and transmit by mail or deliver electronically all reports in the manner required by TIA § 313(c). A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Issuer.

SECTION 7.07 Compensation and Indemnity.

(a) The Issuer and the Guarantors shall pay to the Trustee and each Paying Agent such compensation as shall be agreed upon in writing for its services. The compensation of the Trustee and any Paying Agent shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and the Guarantors shall reimburse the Trustee and each Paying Agent upon request for all reasonable out-of-pocket expenses and advances incurred or made by the Trustee and each Paying Agent. Such expenses shall include the reasonable compensation and expenses of the Trustee’s or such Paying Agent’s agents and counsel.

(b) The Issuer and the Guarantors shall indemnify the Trustee, its agents and officers, and each Agent against any and all losses, liabilities, obligations, damages, penalties, judgments, actions, claims, suits, proceedings, such reasonable costs and expenses (including reasonable fees and disbursements of counsel) of any kind whatsoever which may be incurred by the Trustee, its agents and officers, or such Agent arising out of or in connection with the acceptance or administration of its duties under this Indenture and Note Guarantees; provided, however, that the Issuer and the Guarantors need not reimburse any expense or indemnify against any loss, obligation, damage, penalty, judgment, action, suit, proceeding, reasonable cost or expense (including reasonable fees and disbursements of counsel) of any

 

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kind whatsoever which may be incurred by the Trustee or such Agent, as the case may be, in connection with any investigative, administrative or judicial proceeding (whether or not such indemnified party is designated a party to such proceeding) in which and to the extent that it is determined that the Trustee, its agents and officers, or any Agent acted with negligence, bad faith or willful misconduct. The Trustee and each Agent shall notify the Issuer promptly of any claim of which the Responsible Officer of the Trustee or an officer of such Agent has received written notice for which it may seek indemnity. Failure by the Trustee or any Agent to so notify the Issuer shall not relieve the Issuer and the Guarantors of their obligations hereunder, unless the Issuer and the Guarantors are materially prejudiced thereby. The Issuer or such Guarantor shall defend the claim and the Trustee and such Agent, as the case may be, shall cooperate in the defense. Unless otherwise set forth herein, the Trustee or any Agent may have separate counsel and the Issuer and the Guarantors shall pay the reasonable fees and expenses of such counsel. Neither the Issuer nor any Guarantor need pay for any settlement made without the Issuer’s consent.

(c) To secure the Issuer’s and the Guarantors’ payment obligations in this Section 7.07, the Trustee and any Paying Agent shall have a lien prior to the Securities on all money or property held or collected by the Trustee or any Paying Agent, in its capacity as Trustee or Paying Agent, except money or property held in trust by the Trustee or any Paying Agent to pay principal of, premium, if any, and interest on particular Securities.

(d) If the Trustee or Paying Agent incurs expenses or renders services after the occurrence of an Event of Default specified in clause (d) or (e) of Section 6.01 hereof, the expenses and the compensation for the services will be intended to constitute expenses of administration under Title 11 of the United States Bankruptcy Code or any applicable federal or state law for the relief of debtors.

(e) The provisions of this Section 7.07 shall survive the termination of this Indenture and the resignation or removal of the Trustee.

SECTION 7.08 Replacement of Trustee.

(a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in Section 7.09.

(b) The Trustee may resign at any time by so notifying the Issuer in writing at least 30 days prior to the date of the proposed resignation. The Holders of a majority in principal amount of the outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee in writing and may appoint a successor Trustee with the consent of the Issuer. The Issuer may at any time remove the Trustee with respect to the Securities of any series by Company Order given at least 30 days prior to the date of the proposed removal.

(c) If the Trustee resigns or is removed with respect to the Securities of any series, or if a vacancy exists in the office of Trustee with respect to the Securities of any series for any reason, the Issuer shall promptly appoint a successor Trustee with respect to the Securities of such series. Within one year after the successor Trustee takes office with respect to the Securities of any series, the Holders of a majority in principal amount of the outstanding Securities of such series may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer. If the successor Trustee does not deliver its written acceptance required by the next succeeding paragraph of this Section 7.08 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the expense of the Issuer), the Issuer or the Holders of a majority in principal amount of the outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

(d) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer, immediately after the delivery of such written acceptance, subject to the

 

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lien provided in Section 7.07 hereof, (i) the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, (ii) the resignation or removal of the retiring Trustee shall become effective and (iii) the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder. The retiring Trustee shall have no responsibility or liability for any action or inaction of a successor Trustee.

(e) If the Trustee is no longer eligible under Section 7.11 hereof, any Holder who satisfies the requirements of TIA § 310(b) may petition any court of competent jurisdiction for the removal of the Trustee with respect to the Securities of any affected series and the appointment of a successor Trustee.

(f) The Issuer shall give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

(g) Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligation under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

SECTION 7.09 Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Issuer, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (ii) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee will become effective to the extent provided therein, and each successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

SECTION 7.10 Successor Trustee by Merger, etc. If a Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, trust company or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.

SECTION 7.11 Eligibility. This Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1), (2) and (5). The Trustee (together with its parent) shall have a combined capital and surplus of at least $25.0 million as set forth in its most recent published annual report of condition.

SECTION 7.12 Money Held in Trust. The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article VIII and Article X of this Indenture.

 

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ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Issuer may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officer’s Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Securities of any series upon compliance with the conditions set forth below in this Article VIII.

SECTION 8.02 Legal Defeasance and Discharge. Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Securities of such series (including any Note Guarantees of such Securities) on the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities of such series (including any Note Guarantees of such Securities), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all their other obligations under such Securities, Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of outstanding Securities of such series to receive payments in respect of the principal of, or interest or premium, if any, on such Securities when such payments are due from the trust referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to such Securities under Article II and Section 4.02 hereof;

(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and the obligations of the Issuer and the Guarantors in connection therewith; and

(d) this Article VIII.

Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

SECTION 8.03 Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under Sections 4.03 and 4.05 hereof with respect to the outstanding Securities of the applicable series on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Securities of such series will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that Securities of such series will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities of the applicable series and the Note Guarantees of such Securities, the Issuer and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this

 

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Indenture, the Securities of such series and the Note Guarantees of such Securities will be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Section 6.01(c) hereof will not constitute an Event of Default.

SECTION 8.04 Conditions to Legal or Covenant Defeasance.

(a) In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:

(i) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Securities of the applicable series, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium, if any, and interest on the then outstanding Securities of such series on the Stated Maturity thereof or on the applicable Redemption Date, as the case may be, and the Issuer must specify whether the Securities of such series are being defeased to such Stated Maturity or to a particular Redemption Date;

(ii) in the case of an election under Section 8.02 hereof, the Issuer must deliver to the Trustee an Opinion of Counsel (or Opinions of Counsel) confirming that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of issuance of the Securities of the applicable series, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel (or Opinions of Counsel) shall confirm that, the Holders of the Securities of such series that are then outstanding will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(iii) in the case of an election under Section 8.03 hereof, the Issuer must deliver to the Trustee an Opinion of Counsel (or Opinions of Counsel) confirming that the Holders of the then outstanding Securities of the applicable series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit or liens securing such borrowing) and the deposit will not result in a breach or violation of, or constitute a Default under, any other instrument to which the Issuer is a party or by which the Issuer is bound;

(v) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a Default under, any material agreement or instrument (other than this Indenture) to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound;

(vi) the Issuer must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of preferring the Holders of Securities of the applicable series over the other creditors of the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or others; and

(vii) the Issuer must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance, as applicable, have been complied with.

 

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SECTION 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Securities of any series will be held in trust and applied by the Trustee, in accordance with the provisions of the Securities of such series and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities of the applicable series.

Notwithstanding anything in this Article VIII to the contrary, the Trustee will deliver or pay to the Issuer from time to time upon the request of the Issuer any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a)(i) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.06 Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on any Security and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall, subject to applicable escheat law, be paid to the Issuer on its request or (if then held by the Issuer) will be discharged from such trust; and the Holder of such Security will thereafter be permitted to look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.

SECTION 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities with respect to the Securities of any series in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Issuer and the Guarantors under this Indenture, the Securities of such series and the Note Guarantees of such Securities will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Security of such series following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent.

 

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ARTICLE IX

NOTE GUARANTEES

SECTION 9.01 Note Guarantee.

(a) Subject to this Article IX, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Security of a series authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities of such series or the obligations of the Issuer hereunder or thereunder, that:

(i) the principal of, premium, if any, and interest on, the Securities of such series will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Securities of such series, if any, if lawful, and all other obligations of the Issuer to such Holder or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of Securities of such series or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration, redemption or otherwise.

Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

(b) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in the Securities of any series and this Indenture.

(c) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid to either the Trustee or such Holder, the applicable Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

(d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) will forthwith become

 

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due and payable by the Guarantors for the purpose of the applicable Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee.

(e) Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Securities of the applicable series are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on such Securities or the Note Guarantees of such series, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Securities of the applicable series shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(f) In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(g) The Note Guarantee issued by any Guarantor shall be a general unsecured senior obligation of such Guarantor and shall rank equally in right of payment with all existing and future senior indebtedness of such Guarantor, if any.

(h) Each payment to be made by a Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

SECTION 9.02 Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Securities, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of the United States Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article IX, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

SECTION 9.03 Execution and Delivery of Guarantee.

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 9.01 hereof will remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Securities of a series, the Note Guarantee of such Securities will be valid nevertheless.

 

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Upon execution by a new Guarantor of an indenture supplemental hereto substantially in the form reasonably satisfactory to the Trustee, the Note Guarantee of such Guarantor set forth in this Indenture shall be deemed duly delivered, without any further action by any Person, on behalf of such Guarantor.

The delivery of any Security of a series by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture or any supplemental indenture on behalf of the Guarantors who are signatories thereto.

SECTION 9.04 Releases. The Note Guarantees of a Guarantor will be released:

(a) in connection with any sale, disposition or transfer of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Guarantor;

(b) in connection with any sale, disposition or transfer of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Guarantor;

(c) upon the release or discharge of such Guarantor’s guarantee of the Credit Agreement or under the Debt that triggered such Guarantor’s Note Guarantee;

(d) upon the liquidation or dissolution of such Guarantor; provided that no Default or Event of Default shall occur as a result thereof or has occurred and is continuing; or

(e) upon Legal Defeasance or Covenant Defeasance as provided in Article VIII hereof or satisfaction and discharge of this Indenture as provided in Article X hereof.

Any Guarantor not released from its obligations under its Note Guarantees as provided in this Section 9.04 will remain liable for the full amount of principal of and interest and premium, if any, on the Securities of the applicable series and for the other obligations of any Guarantor under this Indenture for the applicable series as provided in this Article IX.

ARTICLE X

SATISFACTION AND DISCHARGE

SECTION 10.01 Satisfaction and Discharge. This Indenture will be discharged and will cease to be of further effect as to all Securities of any series issued hereunder, when:

(a) either:

(i) all Securities of such series that have been authenticated, except lost, stolen or destroyed Securities of such series that have been replaced or paid and Securities of such series for whose payment money has been deposited in trust and thereafter repaid to the Issuer, have been delivered to the Trustee for cancellation; or

(ii) all Securities of such series that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of such Securities, cash in U.S. dollars, non-callable Government Securities or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Securities of such series not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the Stated Maturity or redemption, as the case may be;

 

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(b) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit or liens securing such borrowing) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuer is a party or by which the Issuer is bound;

(c) the Issuer has paid or caused to be paid all sums payable by it under this Indenture with respect to the Securities of such series; and

(d) the Issuer has delivered irrevocable written instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Securities of such series at Stated Maturity or the Redemption Date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to clause (a)(ii) of this Section 10.01, the provisions of Section 8.06 hereof and Section 10.02 hereof will survive. In addition, nothing in this Section 10.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

SECTION 10.02 Application of Trust Money. Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 10.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the applicable Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, premium, if any, and interest for whose payment such money has been deposited with the Trustee; provided that such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 10.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Issuer and the Guarantors under this Indenture and the applicable Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 10.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest on any Securities because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE XI

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 11.01 Without Consent of Holders. Notwithstanding Section 11.02 hereof, the Issuer, the Guarantors and the Trustee may amend or supplement this Indenture with respect to any series of Securities or the Note Guarantees of any such series without notice to or the consent of any Holder to:

(a) cure any ambiguity, omission, mistake, defect or inconsistency;

(b) provide for uncertificated Securities in addition to or in place of certificated Securities;

 

40

(c) provide for the assumption of the obligations of the Issuer or a Guarantor to Holders of such Securities and the Note Guarantees of such Securities in the case of a merger or consolidation or a sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the assets of the Issuer or such Guarantor, as applicable, in accordance with the terms of this Indenture;

(d) make any change that would provide any additional rights or benefits to the Holders of such Securities or that does not adversely affect the legal rights under this Indenture of any such Holder;

(e) comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA;

(f) conform the text of this Indenture, the Securities of any series or the Note Guarantees of any series to any provision of a description of such Securities in the prospectus or prospectus supplement or other document relating to the offering of such Securities to the extent that such provision in such description was intended to be a verbatim recitation of a provision of this Indenture or the Securities of such series;

(g) add a Guarantor or release any Guarantor from its Note Guarantee if such release is in accordance with the terms of this Indenture; or

(h) provide for the issuance of additional Securities in accordance with the limitations set forth in this Indenture.

SECTION 11.02 With Consent of Holders.

(a) Except as set forth in Section 11.01 and 11.02(b) hereof, this Indenture, the Securities of any series and the Note Guarantees of any series of Securities may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of Securities of such series then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities of any applicable series), and any existing Default or Event of Default or compliance with any provision of this Indenture, the Securities of any series or the Note Guarantees of any series of Securities may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Securities of such series (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Securities of any applicable series).

(b) Without the consent of each Holder of a series of Securities affected, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04 hereof, may not:

(i) change the Stated Maturity of the principal of, or any installment of interest on, any Security of such series;

(ii) reduce the principal amount of, or premium, if any, or interest on, any Security of such series;

(iii) change the place or currency of payment of principal of, or premium, if any, or interest on, any Security of such series;

(iv) impair the right to institute suit for the enforcement of any payment on or with respect to any Security of such series;

 

41

(v) reduce the percentage or principal amount of the outstanding Securities of such series, the consent of whose Holders is necessary to modify or amend this Indenture with respect to such series or waive compliance with certain provisions of this Indenture or waive certain Defaults with respect to such series;

(vi) waive a Default in the payment of principal of, premium, if any, or interest on, any Security of such series; or

(vii) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except as set forth under Article IX hereof;

(c) It shall not be necessary for the consent of the Holders under this Section 11.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

(d) After an amendment, supplement or waiver under this Section 11.02 becomes effective, the Issuer shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Issuer will mail supplemental indentures to Holders upon request. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

SECTION 11.03 Revocation and Effect of Consent. Until an amendment or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of such Security or portion of such Security that evidences the same Debt as the Security of the consenting Holder, even if notation of the consent is not made on such Security. However, any such Holder or subsequent Holder may revoke the consent as to its Security or portion of its Security. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver shall become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Securities of the applicable series.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the last two sentences of the immediately preceding paragraph, those Persons who were Holders of the applicable series at such record date (or their duly designated proxies) and only those Persons shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

After an amendment, supplement or waiver becomes effective, it shall bind every Holder of the applicable series unless it is of the type described in any of clauses (i) through (vii) of Section 11.02(b) hereof. In case of an amendment or waiver of the type described in clauses (i) through (vii) of Section 11.02(b) hereof, the amendment or waiver shall bind each Holder who has consented to it and every subsequent Holder of a Security of the applicable series that evidences the same indebtedness as the Security of the consenting Holder.

SECTION 11.04 Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder and the Trustee may place an appropriate notation on any Security of the same series thereafter authenticated. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Security shall issue and the Trustee shall authenticate a new Security of the same series that reflects the changed terms. Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver.

 

42

SECTION 11.05 Trustee to Sign Amendments, Etc. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article XI is authorized or permitted by this Indenture. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

SECTION 11.06 Conformity with TIA. Every supplemental indenture executed pursuant to this Article XI shall conform to the requirements of the TIA as then in effect.

ARTICLE XII

MISCELLANEOUS

SECTION 12.01 Trust Indenture Act of 1939. Prior to the effectiveness of a Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of a Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

SECTION 12.02 Notices. Any notice or communication shall be sufficiently given if in writing and delivered in person or mailed by first class mail, postage prepaid, addressed as follows:

If to the Issuer or any Guarantor:

Kansas City Southern

427 West 12th Street

Kansas City, MO 64105

Facsimile: (816) 983-1198

Email: mcline@kcsouthern.com

Attention: Michael W. Cline

With a copy to:

White & Case LLP

1155 Avenue of the Americas

New York, New York 10036

Facsimile: (212) 354-8113

Email: gkashar@whitecase.com

Attention: Gary Kashar, Esq.

If to the Trustee:

U.S. Bank National Association

225 Asylum Street

23rd Floor

Hartford, CT 06103

Facsimile: (860) 241-6881

Email: michaelhopkins1@usbank.com

Attention: Michael Hopkins

 

43

The Issuer, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices or communications to a Holder shall be deemed to have been given upon the mailing by first class mail, postage prepaid, of such notices to Holders at their registered addresses as recorded in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed in the Security for the giving of such notice. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except as otherwise provided in this Indenture, if a notice or communication is mailed in the manner provided in this Section 12.02, it is duly given, whether or not the addressee receives it.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. All communication sent to the Trustee shall only be deemed effective when actually received by the Trustee.

Neither the failure to give any notice to a particular Holder, nor any defect in any notice given to any particular Holder, shall affect the sufficiency of any notice given to another Holder.

SECTION 12.03 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee, if the Trustee so requests:

(a) an Officer’s Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

SECTION 12.04 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(a) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;

(c) a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of each such Person, such condition or covenant has been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

 

44

SECTION 12.05 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

SECTION 12.06 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE SECURITIES OF ANY SERIES AND THE NOTE GUARANTEES.

SECTION 12.07 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuer or any of the Guarantors. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 12.08 No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees. No recourse for the payment of the principal of, premium, if any, or interest on any of the Securities of any series issued under this Indenture or for any claim based on this Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in this Indenture, or in the Securities of any series or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling Person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the Securities of the applicable series, waives and releases all such liability.

SECTION 12.09 Successors. All agreements of the Issuer in this Indenture and the Securities of any series shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 9.04 hereof.

SECTION 12.10 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Delivery of an executed counterpart of a signature page to this Indenture by facsimile, .pdf attachment, email or other electronic means shall be effective as delivery of a manually executed counterpart of this Indenture.

SECTION 12.11 Severability. In case any provision in this Indenture or in the Securities of any series shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 12.12 Table of Contents, Headings, Etc. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.

[Signature Page Follows]

 

45

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first written above.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to KCS Base Indenture

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to KCS Base Indenture

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to KCS Base Indenture

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to KCS Base Indenture

EXHIBIT A

Form of Certificate

            ,         

U.S. Bank National Association

Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103-1919

Attention: Michael M. Hopkins

Re:        Kansas City Southern (the “Issuer”)

[            ] Notes due [            ] (the “Notes”)

Ladies and Gentlemen:

This letter relates to $         principal amount of Notes represented by a Note which bears a legend outlining restrictions upon transfer thereof (the “Legended Note”). Pursuant to Section 2.03 of the Indenture dated as of December 9, 2015 (the “Indenture”), relating to the Notes, we hereby certify that we are (or we will hold such securities on behalf of) a person outside the United States to whom the Notes could be transferred in accordance with Rule 904 of Regulation S promulgated under the Securities Act of 1933, as amended. Accordingly, you are hereby requested to exchange the legended certificate for an unlegended certificate representing an identical principal amount of Notes, all in the manner provided for in the Indenture.

You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

 

Very truly yours,
[Name of Holder]
By:  

 

  Authorized Signature

 

A-1

EXHIBIT B

Form of Certificate to Be Delivered

in Connection with Transfers

Pursuant to Regulation S

            ,         

U.S. Bank National Association

Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103-1919

Attention: Michael M. Hopkins

Re:        Kansas City Southern (the “Issuer”)

[            ] Notes due [            ] (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $         aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

(A) if the offer of the Notes was made prior to the expiration of the distribution compliance period, the offer of the Notes was not made to a U.S. person or for the account or benefit of a U.S. person;

(B) the offer of the Notes was not made to a person in the United States;

(C) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States;

(D) no directed selling efforts have been made by us in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

(E) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested parry in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

 

Very truly yours,
[Name of Transferor]

 

B-1

By:  

 

  Authorized Signature

 

B-2

EXHIBIT C

Form of Certificate to be

Delivered in Connection with

Transfers to Non-QIB Institutional Accredited Investors

(Other Than Outside the United States in Reliance on Regulation S)

            ,         

U.S. Bank National Association

Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103-1919

Attention: Michael M. Hopkins

Re:        Kansas City Southern (the “Issuer”)

[            ] Notes due [            ] (the “Notes”)

Dear Sirs:

In connection with our proposed purchase of $        aggregate principal amount of the Notes, we confirm that:

1. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture dated as of December 9, 2015 (the “Indenture”), relating to the Notes and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Notes, we will do so only (A) to the Issuer or any of its subsidiaries, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuer a signed letter substantially in the form of this letter, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the exemption from registration provided by Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein.

3. We understand that, on any proposed resale of any Notes, we will be required to furnish to you and the Issuer such certifications, legal opinions and other information as you and the Issuer may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

 

C-1

4. We are purchasing notes having a minimum purchase price of not less than $250,000 for our own account or for any separate account for which we are acting.

5. We are an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act (an “institutional accredited investor”) able to bear the economic risk of an investment in the notes.

6. Any purchase of Notes by us will be for our own account or for the account of one or more other institutional accredited investors for each of which we exercise sole investment discretion (and have authority to make, and do make, the statements contained in this letter) or as fiduciary for the account of one or more trusts, each of which is an “accredited investor” within the meaning of Rule 501(a)(7) under the Securities Act and for each of which we exercise sole investment discretion; or we are a “bank” within the meaning of Section 3(a)(2) of the Securities Act, or a “savings and loan association” or other institution described in Section 3(a)(5)(A) of the Securities Act, that is acquiring the Notes as fiduciary for the account of one or more institutions for which we exercise sole investment discretion.

7. We have such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of purchasing the notes.

You and the Issuer are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

Very truly yours,
[Name of Transferee]
By:  

 

  Authorized Signature

 

C-2



Exhibit 4.2

Dated as of December 9, 2015

First Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

Floating Rate Senior Notes due 2016

FIRST SUPPLEMENTAL INDENTURE (the “First Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “Floating Rate Senior Notes due 2016” (herein referred to as the “Floating Rate Senior Notes”), the form and substance of the Floating Rate Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this First Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this First Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this First Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this First Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This First Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this First Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the Floating Rate Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the Floating Rate Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall

 

1

not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Business Day Convention” means if any Interest Payment Date in respect of any Floating Rate Senior Note (other than the Maturity Date) is not a Business Day, then such Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day. If any such Interest Payment Date (other than the Maturity Date) is postponed or brought forward as described above, the interest amount will be adjusted accordingly and the Holder will be entitled to more or less interest, respectively. If the Maturity Date in respect of the Floating Rate Senior Notes or any date fixed for redemption of the Floating Rate Senior Notes is not a Business Day, the payment of principal and interest will not be made until the next following Business Day, and no further interest will be paid in respect of the delay in such payment.

“Calculation Agent” means U.S. Bank National Association, or any other successor appointed from time to time by the Issuer acting as calculation agent for the Floating Rate Senior Notes.

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the Floating Rate Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Floating Rate Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Daily Interest Amount” shall have the meaning set forth in Section 2.04(c).

“Designated LIBOR Page” means (1) the Reuters screen “LIBOR01” or such other page as may replace the Reuters screen “LIBOR01” on that service or (2) if, on any Interest Determination Date, the three-month U.S. dollar LIBOR does not appear or is not available on such date on the designated Reuters screen described in clause (1) of this definition, the designated LIBOR page shall be Bloomberg L.P. page “BBAM” or such other page as may replace Bloomberg L.P. page “BBAM” on that service.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Floating Rate Senior Notes” has the meaning set forth in the second paragraph of the recitals hereof.

“Global Note” means a Security evidencing all or part of the Floating Rate Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Initial Interest Period” means the period beginning on, and including, December 9, 2015 and ending on, but not including, the first Interest Payment Date.

“Interest Determination Date” means, for each Interest Reset Date, the second London Business Day preceding such Interest Reset Date.

“Interest Payment Dates” means has the meaning set forth in Section 2.04(a) hereof.

“Interest Period” means the period beginning on, and including, an Interest Payment Date and ending on, but not including, the following Interest Payment Date; provided that the first Interest Period will begin on December 9, 2015, and will end on, but not include, the first Interest Payment Date.

“Interest Reset Date” means for each Interest Period, other than the first Interest Period, the first day of such Interest Period.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Issue Date” means December 9, 2015.

“LIBOR” has the meaning set forth in Section 2.04(a) hereof.

“London Business Day” means any day which is not a Saturday, Sunday, or a day on which commercial banking institutions are authorized or obligated by law, regulation or executive order to be closed in London.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the Floating Rate Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the Floating Rate Senior Notes or fails to make a rating of the Floating Rate Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the Floating Rate Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the Floating Rate Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Regular Record Date” shall have the meaning set forth in Section 2.04(d).

“Spread” means 70 basis points (0.70%).

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this First Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this First Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The Floating Rate Senior Notes shall be designated as the “Floating Rate Senior Notes due 2016.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of Floating Rate Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the Floating Rate Senior Notes shall be October 28, 2016 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The Floating Rate Senior Notes shall bear interest at a floating rate per annum equal to the three-month U.S. dollar London Interbank Offered Rate (“LIBOR”), determined as provided in this Section 2.04, plus the Spread, from the date of this Indenture, payable quarterly in arrears on January 28, April 28, July 28 and October 28 of each calendar year (each, an “Interest Payment Date”), commencing on January 28, 2016, subject to the Business Day Convention. Interest payable on any Interest Payment Date or the Maturity Date shall be the amount accrued from, and including, the immediately preceding Interest Payment Date in respect of which interest has been paid as set forth in this Indenture (or from and including the original issue date of the Floating Rate Senior Notes, if no interest has been paid as set forth in this First Supplemental Indenture) to, but excluding, such Interest Payment Date or the Maturity Date, as the case may be.

(b) The interest rate for the Initial Interest Period shall be 1.0232%. The interest rate for each Interest Period after the Initial Interest Period shall be the three-month U.S. dollar LIBOR, as determined on the applicable Interest Determination Date by the Calculation Agent pursuant to Section 2.04(e) hereof, plus the Spread. The interest rate for the Floating Rate Senior Notes will be reset quarterly on each Interest Reset Date.

(c) The amount of interest for each day that the Floating Rate Senior Notes are outstanding (the “Daily Interest Amount”) shall be calculated by the Calculation Agent by dividing the interest rate (expressed as a percentage per annum) in effect during the applicable Interest Period or the Initial Interest Period, as applicable, by 360 and multiplying the result by the outstanding principal amount of the Floating Rate Senior Notes. The amount of interest to be paid on the Floating Rate Senior Notes for any applicable period shall be calculated by the Calculation Agent by adding the Daily Interest Amounts for each day in such period.

(d) Interest on the Floating Rate Senior Notes shall be payable to the Holders of record of the Floating Rate Senior Notes at the close of business on the fifteenth calendar day prior to each Interest Payment Date, whether or not such day is a Business Day, each such day, a “Regular Record Date” with respect to the Floating Rate Senior Notes.

(e) The Calculation Agent shall determine the three-month U.S. dollar LIBOR in accordance with the following provisions: with respect to any Interest Determination Date, the three-month U.S. dollar LIBOR shall be the rate (expressed as a percentage per annum) for deposits in U.S. dollars having a maturity of three months that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date. If the three-month U.S. dollar LIBOR does not appear on the Designated LIBOR Page, the three-month U.S. dollar LIBOR, in respect of such Interest Determination Date, shall be determined as follows: the Calculation Agent shall request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent (after consultation with the Issuer), to provide the Calculation Agent with its offered

quotation for deposits in U.S. dollars for the period of three months commencing on the applicable Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on that Interest Determination Date and in a principal amount of not less than $1,000,000 for a single transaction in U.S. dollars in such market at such time. If at least two quotations are provided, then the three-month U.S. dollar LIBOR on such Interest Determination Date shall be the arithmetic mean of such quotations. If fewer than two such quotations are provided, then the three-month U.S. dollar LIBOR on such Interest Determination Date shall be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City time, on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent (after consultation with the Issuer) for loans in U.S. dollars to leading European banks, having a three-month maturity and in a principal amount of not less than $1,000,000 for a single transaction in U.S. dollars in such market at such time; provided, however, that if the banks selected by the Calculation Agent are not providing quotations in the manner described by this sentence, the three-month U.S. dollar LIBOR determined as of such Interest Determination Date shall be the three-month U.S. dollar LIBOR in effect with respect to the Floating Rate Senior Notes prior to such Interest Determination Date.

(f) All percentages resulting from any calculation of any interest rate for the Floating Rate Senior Notes shall be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward, and all U.S. dollar amounts shall be rounded to the nearest cent, with one-half cent being rounded upward. Each calculation of the interest rate on the Floating Rate Senior Notes by the Calculation Agent shall (in the absence of manifest error) be final and binding on the Holders of the Floating Rate Senior Notes and the Issuer.

(g) Upon the request of any Holder of Floating Rate Senior Notes, the Calculation Agent shall provide to such Holder the interest rate then in effect and, if determined, the interest rate that shall become effective on the next Interest Reset Date.

(h) Notwithstanding anything herein to the contrary, the interest rate on the Floating Rate Senior Notes shall not exceed the maximum rate permitted by New York law, as the same may be modified by U.S. law of general application.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the Floating Rate Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the Floating Rate Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the Floating Rate Senior Notes may present the Floating Rate Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the Floating Rate Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The Floating Rate Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional Floating Rate Senior Notes. The Issuer may issue additional Floating Rate Senior Notes under the Indenture. Each of the Floating Rate Senior Notes issued on the Issue Date and any additional Floating Rate Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional Floating Rate Senior Notes that are not fungible with existing Floating Rate Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing Floating Rate Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the Floating Rate Senior Notes include any additional Floating Rate Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE FLOATING RATE SENIOR NOTES

Section 3.01 Redemption. The Floating Rate Senior Notes shall not be subject to any optional redemption except as provided in Section 3.02.

Section 3.02 Redemption Following Exchange Offer.

(a) Upon completion of the Exchange Offer, the Issuer may redeem Floating Rate Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Floating Rate Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(b) Any redemption pursuant to Section 3.02(a) shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the Floating Rate Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select Floating Rate Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the Floating Rate Senior Notes are listed, or if the Floating Rate Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no Floating Rate Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to the Floating Rate Senior Notes to be redeemed pursuant to Section 3.02(a).

Section 3.03 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any Floating Rate Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the Floating Rate Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the Floating Rate Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding Floating Rate Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the Floating Rate Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Floating Rate Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Floating Rate Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the Floating Rate Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the Floating Rate Senior Notes;

(iii) setting forth the payment date for the repurchase of the Floating Rate Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any Floating Rate Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all Floating Rate Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering Floating Rate Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Floating Rate Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all Floating Rate Senior Notes or portions of Floating Rate Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all Floating Rate Senior Notes or portions of Floating Rate Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the Floating Rate Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Floating Rate Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of Floating Rate Senior Notes properly tendered the purchase price for the Floating Rate Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of Floating Rate Senior Notes a new Floating Rate Senior Note equal in principal amount to any unpurchased portion of any Floating Rate Senior Notes surrendered; provided that each new Floating Rate Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the Floating Rate Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all Floating Rate Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding Floating Rate Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of Floating Rate Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder Floating Rate Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of Floating Rate Senior Notes, beneficial owners of the Floating Rate Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding Floating Rate Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the Floating Rate Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that Floating Rate Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this First Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS FIRST SUPPLEMENTAL INDENTURE AND THE FLOATING RATE SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this First Supplemental Indenture or the Floating Rate Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this First Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this First Supplemental Indenture and perform its obligations hereunder.

*     *    *

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (Floating Rate Senior Notes due 2023)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (Floating Rate Senior Notes due 2023)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (Floating Rate Senior Notes due 2023)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (Floating Rate Senior Notes due 2023)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

Floating Rate Senior Notes due 2016

 

  CUSIP No.             
  ISIN No.             
No.        $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on October 28, 2016, subject to the Business Day Convention.

Interest Payment Dates: January 28, April 28, July 28 and October 28, subject to the Business Day Convention.

Regular Record Dates: the close of business on the fifteenth calendar day prior to each Interest Payment Date, whether or not such day is a Business Day.

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:   Kansas City Southern
  By:  

 

  Name:  
  Title:  
  By:  

 

  Name:  
  Title:  

 

A-2

Trustee’s Certificate of Authentication

This is one of the Floating Rate Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

Name:  
Title:  

 

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[REVERSE SIDE OF NOTE]

Kansas City Southern

Floating Rate Senior Notes due 2016

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on October 28, 2016, subject to the Business Day Convention.

The Issuer promises to pay interest quarterly in arrears on January 28, April 28, July 28 and October 28 of each calendar year (each, an “Interest Payment Date”),commencing on [January 28, 2016]1, subject to the Business Day Convention.

Interest payable on any Interest Payment Date or the Maturity Date shall be the amount accrued from, and including, the immediately preceding Interest Payment Date in respect of which interest has been paid as set forth in the Indenture (or from and including [December 9, 2015]2, if no interest has been paid as set forth in the Indenture) to, but excluding, such Interest Payment Date or the Maturity Date, as the case may be.

The interest rate for the Initial Interest Period shall be [1.0232]%.2 Thereafter, the interest rate for any Interest Period shall be the three-month U.S. dollar LIBOR, as determined on the applicable Interest Determination Date by the Calculation Agent in accordance with the provisions of the First Supplemental Indenture, plus 70 basis points. The interest rate for the Floating Rate Senior Notes will be reset quarterly on each Interest Reset Date.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the Floating Rate Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the Floating Rate Senior Notes as provided above on each Interest Payment Date to the Holder of record of the Floating Rate Senior Notes at the close of business on the fifteenth calendar day prior to each Interest Payment Date, whether or not such day is a Business Day, in each case, even if the Floating Rate Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register).

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

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If any Interest Payment Date in respect of any Floating Rate Senior Note (other than the Maturity Date) is not a Business Day, then such Interest Payment Date will be postponed to the next succeeding Business Day unless that Business Day is in the next succeeding calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day. If any such Interest Payment Date (other than the Maturity Date) is postponed or brought forward as described above, the interest amount will be adjusted accordingly and the Holder will be entitled to more or less interest, respectively. If the Maturity Date in respect of the Floating Rate Senior Notes or any date fixed for redemption of the Floating Rate Senior Notes is not a Business Day, the payment of principal and interest will not be made until the next following Business Day, and no further interest will be paid in respect of the delay in such payment.

 

3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the Floating Rate Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the First Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the Floating Rate Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Floating Rate Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The Floating Rate Senior Notes are general unsecured obligations of the Issuer.

 

5. Redemption Following Exchange Offer.

Upon completion of the Exchange Offer, the Issuer may redeem Floating Rate Senior Floating Rate Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Floating Rate Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the Floating Rate Senior Notes are to be redeemed at any time, the Trustee shall select the Floating Rate Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the Floating Rate Senior Notes are listed or, if the Floating Rate Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no Floating Rate Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

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7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Floating Rate Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to Floating Rate Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any Floating Rate Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on Floating Rate Senior Notes or portions of Floating Rate Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its Floating Rate Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the Floating Rate Senior Notes with a copy to the Trustee. Any Floating Rate Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on Floating Rate Senior Notes or portions of Floating Rate Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The Floating Rate Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of Floating Rate Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any Floating Rate Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any Floating Rate Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a Floating Rate Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

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12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the Floating Rate Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the Floating Rate Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the Floating Rate Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the Floating Rate Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the Floating Rate Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the Floating Rate Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the Floating Rate Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the Floating Rate Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any Floating Rate Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any Floating Rate Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Floating Rate Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the

 

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Issuer or a Guarantor (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Floating Rate Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Floating Rate Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the Floating Rate Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the Floating Rate Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Floating Rate Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the Floating Rate Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the Floating Rate Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the Floating Rate Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the Floating Rate Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

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20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

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[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.  

 

  
Please print or typewrite name and address including zip code of assignee  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  
                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

 

[    ] (a)   this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.
or
[    ] (b)   this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

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If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the First Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the First Supplemental Indenture, state the amount: $         

 

Date:      
Your Signature:  

 

  
 

(Sign exactly as your name appears on the other side of this Note)

  
Signature Guarantee:  

 

    

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

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Exhibit 4.3

Dated as of December 9, 2015

Second Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

2.35% Senior Notes due 2020

SECOND SUPPLEMENTAL INDENTURE (the “Second Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “2.35% Senior Notes due 2020” (herein referred to as the “2.35% Senior Notes”), the form and substance of the 2.35% Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Second Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this Second Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Second Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this Second Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This Second Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this Second Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“2.35% Senior Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the 2.35% Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the 2.35% Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below

 

1

Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the 2.35% Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 2.35% Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Global Note” means a Security evidencing all or part of the 2.35% Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Interest Payment Dates” means May 15 and November 15 of each year, or if any such day is not a Business Day, the next succeeding Business Day, until maturity, beginning on May 15, 2016.

“Issue Date” means December 9, 2015.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the 2.35% Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the 2.35% Senior Notes or fails to make a rating of the 2.35% Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the 2.35% Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the 2.35% Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this Second Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Second Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The 2.35% Senior Notes shall be designated as the “2.35% Senior Notes due 2020.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of 2.35% Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the 2.35% Senior Notes shall be May 15, 2020 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The 2.35% Senior Notes shall bear interest at the rate of 2.35% per annum, and interest will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from and including the Issue Date. Such interest shall be payable semiannually in arrears, on the Interest Payment Dates. Interest on the 2.35% Senior Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest accrued on the 2.35% Senior Notes from the last Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

(b) The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 2.35% Senior Notes are registered at the close of business on the record date for such Interest Payment Date, being the immediately preceding May 1 and November 1, as the case may be.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the 2.35% Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the 2.35% Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the 2.35% Senior Notes may present the 2.35% Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the 2.35% Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The 2.35% Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional 2.35% Senior Notes. The Issuer may issue additional 2.35% Senior Notes under the Indenture. Each of the 2.35% Senior Notes issued on the Issue Date and any additional 2.35% Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional 2.35%

Senior Notes that are not fungible with existing 2.35% Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing 2.35% Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the 2.35% Senior Notes include any additional 2.35% Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE 2.35% SENIOR NOTES

Section 3.01 Optional Redemption. (a) Prior to April 15, 2020 (the date that is one month prior to the Maturity Date), the 2.35% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to the greater of:

(i) 100% of the principal amount of the 2.35% Senior Notes to be redeemed and

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2.35% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 20 basis points;

plus accrued interest to but excluding the Redemption Date.

(b) On or after April 15, 2020 (the date that is one month prior to the Maturity Date), the 2.35% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the 2.35% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

(c) Upon completion of the Exchange Offer, the Issuer may redeem 2.35% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the 2.35% Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(d) Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the 2.35% Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select 2.35% Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the 2.35% Senior Notes are listed, or if the 2.35% Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no 2.35% Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 2.35% Senior Notes to be redeemed pursuant to Section 3.01(c).

Section 3.02 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any 2.35% Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the 2.35% Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the 2.35% Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding 2.35% Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the 2.35% Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s 2.35% Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the 2.35% Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the 2.35% Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the 2.35% Senior Notes;

(iii) setting forth the payment date for the repurchase of the 2.35% Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any 2.35% Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all 2.35% Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering 2.35% Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the 2.35% Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all 2.35% Senior Notes or portions of 2.35% Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all 2.35% Senior Notes or portions of 2.35% Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the 2.35% Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of 2.35% Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of 2.35% Senior Notes properly tendered the purchase price for the 2.35% Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of 2.35% Senior Notes a new 2.35% Senior Note equal in principal amount to any unpurchased portion of any 2.35% Senior Notes surrendered; provided that each new 2.35% Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the 2.35% Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all 2.35% Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding 2.35% Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of 2.35% Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder 2.35% Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of 2.35% Senior Notes, beneficial owners of the 2.35% Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding 2.35% Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the 2.35% Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that 2.35% Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this Second Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This Second Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SECOND SUPPLEMENTAL INDENTURE AND THE 2.35% SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this Second Supplemental Indenture or the 2.35% Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Second Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this Second Supplemental Indenture and perform its obligations hereunder.

*    *    *

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (2.35% Senior Notes due 2020)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (2.35% Senior Notes due 2020)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (2.35% Senior Notes due 2020)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (2.35% Senior Notes due 2020)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

2.35% Senior Notes due 2020

 

  CUSIP No.             
  ISIN No.             
No.                $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on May 15, 2020.

Interest Payment Dates: May 15 and November 15.

Regular Record Dates: May 1 and November 1.

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:     Kansas City Southern
    By:  

 

    Name:  
    Title:  
    By:  

 

    Name:  
    Title:  

 

A-2

Trustee’s Certificate of Authentication

This is one of the 2.35% Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

Name:  
Title:  

 

A-3

[REVERSE SIDE OF NOTE]

Kansas City Southern

2.35% Senior Notes due 2020

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on May 15, 2020.

The Issuer promises to pay interest on the principal amount of this Note on each Interest Payment Date at the rate of 2.35% per annum.

Interest will be payable semiannually (to the holders of record of the 2.35% Senior Notes at the close of business on May 1 or November 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing [May 15, 2016].1

Interest on the 2.35% Senior Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, [from December 9, 2015];2 provided that, if there is no existing default in the payment of interest and this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the 2.35% Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the 2.35% Senior Notes as provided above on each Interest Payment Date to the persons who are Holders (as reflected in the Note Register at the close of business on May 1 and November 1 immediately preceding the Interest Payment Date), in each case, even if the 2.35% Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register). If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

A-4

3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the 2.35% Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the Second Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the 2.35% Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The 2.35% Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The 2.35% Senior Notes are general unsecured obligations of the Issuer.

 

5. Optional Redemption.

Prior to April 15, 2020, the 2.35% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the 2.35% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2.35% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at then-current Treasury Rate, plus 20 basis points, plus accrued interest to but excluding the Redemption Date.

On or after April 15, 2020, the 2.35% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to 100% of the principal amount of the 2.35% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

Upon completion of the Exchange Offer, the Issuer may redeem 2.35% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the 2.35% Senior Notes are to be redeemed at any time, the Trustee shall select the 2.35% Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the 2.35% Senior Notes are listed or, if the 2.35% Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no 2.35% Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

A-5

7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of 2.35% Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 2.35% Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any 2.35% Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on 2.35% Senior Notes or portions of 2.35% Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its 2.35% Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the 2.35% Senior Notes with a copy to the Trustee. Any 2.35% Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on 2.35% Senior Notes or portions of 2.35% Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The 2.35% Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of 2.35% Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any 2.35% Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any 2.35% Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a 2.35% Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

A-6

12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the 2.35% Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the 2.35% Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the 2.35% Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the 2.35% Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the 2.35% Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the 2.35% Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the 2.35% Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the 2.35% Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any 2.35% Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any 2.35% Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 2.35% Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the Issuer or a Guarantor (i) commences a

 

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voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 2.35% Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the 2.35% Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the 2.35% Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the 2.35% Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the 2.35% Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the 2.35% Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the 2.35% Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the 2.35% Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the 2.35% Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

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20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

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[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.  

 

  
Please print or typewrite name and address including zip code of assignee  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  
                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

 

[    ] (a)   this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.
or
[    ] (b)   this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

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If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the Second Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the Second Supplemental Indenture, state the amount: $         

 

Date:       
Your Signature:  

 

  
 

(Sign exactly as your name appears on the other side of this Note)

  
Signature Guarantee:  

 

     

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

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Exhibit 4.4

Dated as of December 9, 2015

Third Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

3.85% Senior Notes due 2023

THIRD SUPPLEMENTAL INDENTURE (the “Third Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “3.85% Senior Notes due 2023” (herein referred to as the “3.85% Senior Notes”), the form and substance of the 3.85% Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Third Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this Third Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Third Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this Third Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This Third Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this Third Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“3.85% Senior Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the 3.85% Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the 3.85% Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below

 

1

Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the 3.85% Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 3.85% Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Global Note” means a Security evidencing all or part of the 3.85% Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Interest Payment Dates” means May 15 and November 15 of each year, or if any such day is not a Business Day, the next succeeding Business Day, until maturity, beginning on May 15, 2016.

“Issue Date” means December 9, 2015.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the 3.85% Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the 3.85% Senior Notes or fails to make a rating of the 3.85% Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the 3.85% Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the 3.85% Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this Third Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Third Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The 3.85% Senior Notes shall be designated as the “3.85% Senior Notes due 2023.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of 3.85% Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the 3.85% Senior Notes shall be November 15, 2023 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The 3.85% Senior Notes shall bear interest at the rate of 3.85% per annum, and interest will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from and including the Issue Date. Such interest shall be payable semiannually in arrears, on the Interest Payment Dates. Interest on the 3.85% Senior Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest accrued on the 3.85% Senior Notes from the last Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

(b) The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 3.85% Senior Notes are registered at the close of business on the record date for such Interest Payment Date, being the immediately preceding May 1 and November 1, as the case may be.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the 3.85% Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the 3.85% Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the 3.85% Senior Notes may present the 3.85% Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the 3.85% Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The 3.85% Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional 3.85% Senior Notes. The Issuer may issue additional 3.85% Senior Notes under the Indenture. Each of the 3.85% Senior Notes issued on the Issue Date and any additional 3.85% Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional 3.85% Senior Notes that are not fungible with existing 3.85%

Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing 3.85% Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the 3.85% Senior Notes include any additional 3.85% Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE 3.85% SENIOR NOTES

Section 3.01 Optional Redemption. (a) Prior to August 15, 2023 (the date that is three months prior to the Maturity Date), the 3.85% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to the greater of:

(i) 100% of the principal amount of the 3.85% Senior Notes to be redeemed and

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.85% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 20 basis points;

plus accrued interest to but excluding the Redemption Date.

(b) On or after August 15, 2023 (the date that is three months prior to the Maturity Date), the 3.85% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the 3.85% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

(c) Upon completion of the Exchange Offer, the Issuer may redeem 3.85% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the 3.85% Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(d) Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the 3.85% Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select 3.85% Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the 3.85% Senior Notes are listed, or if the 3.85% Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no 3.85% Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 3.85% Senior Notes to be redeemed pursuant to Section 3.01(c).

Section 3.02 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any 3.85% Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the 3.85% Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the 3.85% Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding 3.85% Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the 3.85% Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s 3.85% Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the 3.85% Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the 3.85% Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the 3.85% Senior Notes;

(iii) setting forth the payment date for the repurchase of the 3.85% Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any 3.85% Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all 3.85% Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering 3.85% Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the 3.85% Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all 3.85% Senior Notes or portions of 3.85% Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all 3.85% Senior Notes or portions of 3.85% Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the 3.85% Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of 3.85% Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of 3.85% Senior Notes properly tendered the purchase price for the 3.85% Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of 3.85% Senior Notes a new 3.85% Senior Note equal in principal amount to any unpurchased portion of any 3.85% Senior Notes surrendered; provided that each new 3.85% Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the 3.85% Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all 3.85% Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding 3.85% Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of 3.85% Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder 3.85% Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of 3.85% Senior Notes, beneficial owners of the 3.85% Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding 3.85% Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the 3.85% Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that 3.85% Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this Third Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This Third Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS THIRD SUPPLEMENTAL INDENTURE AND THE 3.85% SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this Third Supplemental Indenture or the 3.85% Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Third Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this Third Supplemental Indenture and perform its obligations hereunder.

*    *    *

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (3.85% Senior Notes due 2023)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (3.85% Senior Notes due 2023)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (3.85% Senior Notes due 2023)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (3.85% Senior Notes due 2023)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

3.85% Senior Notes due 2023

CUSIP No.             

ISIN No.             

 

No.                 $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on November 15, 2023.

Interest Payment Dates: May 15 and November 15.

Regular Record Dates: May 1 and November 1.

 

A-1

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:     Kansas City Southern
    By:  

 

    Name:  
    Title:  
    By:  

 

    Name:  
    Title:  

 

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Trustee’s Certificate of Authentication

This is one of the 3.85% Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

Name:  
Title:  

 

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[REVERSE SIDE OF NOTE]

Kansas City Southern

3.85% Senior Notes due 2023

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on November 15, 2023.

The Issuer promises to pay interest on the principal amount of this Note on each Interest Payment Date at the rate of 3.85% per annum.

Interest will be payable semiannually (to the holders of record of the 3.85% Senior Notes at the close of business on May 1 or November 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing [May 15, 2016].1

Interest on the 3.85% Senior Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, [from December 9, 2015];2 provided that, if there is no existing default in the payment of interest and this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the 3.85% Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the 3.85% Senior Notes as provided above on each Interest Payment Date to the persons who are Holders (as reflected in the Note Register at the close of business on May 1 and November 1 immediately preceding the Interest Payment Date), in each case, even if the 3.85% Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register). If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

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3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the 3.85% Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the Third Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the 3.85% Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The 3.85% Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The 3.85% Senior Notes are general unsecured obligations of the Issuer.

 

5. Optional Redemption.

Prior to August 15, 2023, the 3.85% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the 3.85% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.85% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at then-current Treasury Rate, plus 20 basis points, plus accrued interest to but excluding the Redemption Date.

On or after August 15, 2023, the 3.85% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to 100% of the principal amount of the 3.85% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

Upon completion of the Exchange Offer, the Issuer may redeem 3.85% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the 3.85% Senior Notes are to be redeemed at any time, the Trustee shall select the 3.85% Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the 3.85% Senior Notes are listed or, if the 3.85% Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no 3.85% Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

A-5

7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of 3.85% Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 3.85% Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any 3.85% Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on 3.85% Senior Notes or portions of 3.85% Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its 3.85% Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the 3.85% Senior Notes with a copy to the Trustee. Any 3.85% Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on 3.85% Senior Notes or portions of 3.85% Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The 3.85% Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of 3.85% Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any 3.85% Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any 3.85% Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a 3.85% Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

A-6

12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the 3.85% Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the 3.85% Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the 3.85% Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the 3.85% Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the 3.85% Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the 3.85% Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the 3.85% Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the 3.85% Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any 3.85% Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any 3.85% Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 3.85% Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the Issuer or a Guarantor (i) commences a

 

A-7

voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 3.85% Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the 3.85% Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the 3.85% Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the 3.85% Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the 3.85% Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the 3.85% Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the 3.85% Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the 3.85% Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the 3.85% Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

A-8

20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

A-9

[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

 

 

  
Please print or typewrite name and address including zip code of assignee  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  

                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

[    ] (a)     this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.

or

[    ] (b)     this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

A-10

If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

A-11

OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the Third Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the Third Supplemental Indenture, state the amount: $        

 

Date:    
Your Signature:  

 

  
 

(Sign exactly as your name appears on the other side of this Note)

  

 

Signature Guarantee:   

 

    

 

A-12

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-13



Exhibit 4.5

Dated as of December 9, 2015

Fourth Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

3.00% Senior Notes due 2023

FOURTH SUPPLEMENTAL INDENTURE (the “Fourth Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “3.00% Senior Notes due 2023” (herein referred to as the “3.00% Senior Notes”), the form and substance of the 3.00% Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Fourth Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this Fourth Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Fourth Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this Fourth Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This Fourth Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this Fourth Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“3.00% Senior Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the 3.00% Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the 3.00% Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below

 

1

Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the 3.00% Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 3.00% Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Global Note” means a Security evidencing all or part of the 3.00% Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Interest Payment Dates” means May 15 and November 15 of each year, or if any such day is not a Business Day, the next succeeding Business Day, until maturity, beginning on May 15, 2016.

“Issue Date” means December 9, 2015.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the 3.00% Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the 3.00% Senior Notes or fails to make a rating of the 3.00% Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the 3.00% Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the 3.00% Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this Fourth Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Fourth Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The 3.00% Senior Notes shall be designated as the “3.00% Senior Notes due 2023.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of 3.00% Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the 3.00% Senior Notes shall be May 15, 2023 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The 3.00% Senior Notes shall bear interest at the rate of 3.00% per annum, and interest will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from and including the Issue Date. Such interest shall be payable semiannually in arrears, on the Interest Payment Dates. Interest on the 3.00% Senior Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest accrued on the 3.00% Senior Notes from the last Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

(b) The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 3.00% Senior Notes are registered at the close of business on the record date for such Interest Payment Date, being the immediately preceding May 1 and November 1, as the case may be.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the 3.00% Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the 3.00% Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the 3.00% Senior Notes may present the 3.00% Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the 3.00% Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The 3.00% Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional 3.00% Senior Notes. The Issuer may issue additional 3.00% Senior Notes under the Indenture. Each of the 3.00% Senior Notes issued on the Issue Date and any additional 3.00% Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional 3.00%

Senior Notes that are not fungible with existing 3.00% Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing 3.00% Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the 3.00% Senior Notes include any additional 3.00% Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE 3.00% SENIOR NOTES

Section 3.01 Optional Redemption. (a) Prior to February 15, 2023 (the date that is three months prior to the Maturity Date), the 3.00% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to the greater of:

(i) 100% of the principal amount of the 3.00% Senior Notes to be redeemed and

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.00% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 20 basis points;

plus accrued interest to but excluding the Redemption Date.

(b) On or after February 15, 2023 (the date that is three months prior to the Maturity Date), the 3.00% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the 3.00% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

(c) Upon completion of the Exchange Offer, the Issuer may redeem 3.00% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the 3.00% Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(d) Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the 3.00% Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select 3.00% Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the 3.00% Senior Notes are listed, or if the 3.00% Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no 3.00% Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 3.00% Senior Notes to be redeemed pursuant to Section 3.01(c).

Section 3.02 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any 3.00% Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the 3.00% Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the 3.00% Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding 3.00% Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the 3.00% Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s 3.00% Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the 3.00% Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the 3.00% Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the 3.00% Senior Notes;

(iii) setting forth the payment date for the repurchase of the 3.00% Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any 3.00% Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all 3.00% Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering 3.00% Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the 3.00% Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all 3.00% Senior Notes or portions of 3.00% Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all 3.00% Senior Notes or portions of 3.00% Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the 3.00% Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of 3.00% Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of 3.00% Senior Notes properly tendered the purchase price for the 3.00% Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of 3.00% Senior Notes a new 3.00% Senior Note equal in principal amount to any unpurchased portion of any 3.00% Senior Notes surrendered; provided that each new 3.00% Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the 3.00% Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all 3.00% Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding 3.00% Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of 3.00% Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder 3.00% Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of 3.00% Senior Notes, beneficial owners of the 3.00% Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding 3.00% Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the 3.00% Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that 3.00% Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this Fourth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This Fourth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS FOURTH SUPPLEMENTAL INDENTURE AND THE 3.00% SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this Fourth Supplemental Indenture or the 3.00% Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Fourth Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this Fourth Supplemental Indenture and perform its obligations hereunder.

*     *     *

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (3.00% Senior Notes due 2023)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (3.00% Senior Notes due 2023)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (3.00% Senior Notes due 2023)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (3.00% Senior Notes due 2023)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

3.00% Senior Notes due 2023

 

   CUSIP No.             
   ISIN No.             
No.         $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on May 15, 2023.

Interest Payment Dates: May 15 and November 15.

Regular Record Dates: May 1 and November 1.

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:     Kansas City Southern
    By:  

 

      Name:  
      Title:  
    By:  

 

      Name:  
      Title:  

 

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Trustee’s Certificate of Authentication

This is one of the 3.00% Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

  Name:  
  Title:  

 

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[REVERSE SIDE OF NOTE]

Kansas City Southern

3.00% Senior Notes due 2023

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on May 15, 2023.

The Issuer promises to pay interest on the principal amount of this Note on each Interest Payment Date at the rate of 3.00% per annum.

Interest will be payable semiannually (to the holders of record of the 3.00% Senior Notes at the close of business on May 1 or November 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing [May 15, 2016].1

Interest on the 3.00% Senior Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, [from December 9, 2015];2 provided that, if there is no existing default in the payment of interest and this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the 3.00% Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the 3.00% Senior Notes as provided above on each Interest Payment Date to the persons who are Holders (as reflected in the Note Register at the close of business on May 1 and November 1 immediately preceding the Interest Payment Date), in each case, even if the 3.00% Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register). If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

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3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the 3.00% Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the Fourth Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the 3.00% Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The 3.00% Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The 3.00% Senior Notes are general unsecured obligations of the Issuer.

 

5. Optional Redemption.

Prior to February 15, 2023, the 3.00% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the 3.00% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 3.00% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at then-current Treasury Rate, plus 20 basis points, plus accrued interest to but excluding the Redemption Date.

On or after February 15, 2023, the 3.00% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to 100% of the principal amount of the 3.00% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

Upon completion of the Exchange Offer, the Issuer may redeem 3.00% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the 3.00% Senior Notes are to be redeemed at any time, the Trustee shall select the 3.00% Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the 3.00% Senior Notes are listed or, if the 3.00% Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no 3.00% Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

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7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of 3.00% Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 3.00% Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any 3.00% Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on 3.00% Senior Notes or portions of 3.00% Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its 3.00% Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the 3.00% Senior Notes with a copy to the Trustee. Any 3.00% Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on 3.00% Senior Notes or portions of 3.00% Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The 3.00% Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of 3.00% Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any 3.00% Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any 3.00% Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a 3.00% Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

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12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the 3.00% Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the 3.00% Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the 3.00% Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the 3.00% Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the 3.00% Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the 3.00% Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the 3.00% Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the 3.00% Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any 3.00% Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any 3.00% Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 3.00% Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the Issuer or a Guarantor (i) commences a

 

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voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 3.00% Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the 3.00% Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the 3.00% Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the 3.00% Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the 3.00% Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the 3.00% Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the 3.00% Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the 3.00% Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the 3.00% Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

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20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

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[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

 

 

  
Please print or typewrite name and address including zip code of assignee  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  

                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

[    ] (a)     this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.

or

[    ] (b)     this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

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If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the Fourth Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the Fourth Supplemental Indenture, state the amount: $        

 

Date:    
Your Signature:  

 

  
 

(Sign exactly as your name appears on the other side of this Note)

  

 

Signature Guarantee:

  

 

    

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

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Exhibit 4.6

Dated as of December 9, 2015

Fifth Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

4.30% Senior Notes due 2043

FIFTH SUPPLEMENTAL INDENTURE (the “Fifth Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “4.30% Senior Notes due 2043” (herein referred to as the “4.30% Senior Notes”), the form and substance of the 4.30% Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Fifth Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this Fifth Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Fifth Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this Fifth Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This Fifth Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this Fifth Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“4.30% Senior Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the 4.30% Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the 4.30% Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below

 

1

Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the 4.30% Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 4.30% Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Global Note” means a Security evidencing all or part of the 4.30% Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Interest Payment Dates” means May 15 and November 15 of each year, or if any such day is not a Business Day, the next succeeding Business Day, until maturity, beginning on May 15, 2016.

“Issue Date” means December 9, 2015.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the 4.30% Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the 4.30% Senior Notes or fails to make a rating of the 4.30% Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the 4.30% Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the 4.30% Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this Fifth Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Fifth Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The 4.30% Senior Notes shall be designated as the “4.30% Senior Notes due 2043.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of 4.30% Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the 4.30% Senior Notes shall be May 15, 2043 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The 4.30% Senior Notes shall bear interest at the rate of 4.30% per annum, and interest will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from and including the Issue Date. Such interest shall be payable semiannually in arrears, on the Interest Payment Dates. Interest on the 4.30% Senior Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest accrued on the 4.30% Senior Notes from the last Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

(b) The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 4.30% Senior Notes are registered at the close of business on the record date for such Interest Payment Date, being the immediately preceding May 1 and November 1, as the case may be.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the 4.30% Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the 4.30% Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the 4.30% Senior Notes may present the 4.30% Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the 4.30% Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The 4.30% Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional 4.30% Senior Notes. The Issuer may issue additional 4.30% Senior Notes under the Indenture. Each of the 4.30% Senior Notes issued on the Issue Date and any additional 4.30% Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional 4.30%

Senior Notes that are not fungible with existing 4.30% Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing 4.30% Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the 4.30% Senior Notes include any additional 4.30% Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE 4.30% SENIOR NOTES

Section 3.01 Optional Redemption. (a) Prior to November 15, 2042 (the date that is six months prior to the Maturity Date), the 4.30% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to the greater of:

(i) 100% of the principal amount of the 4.30% Senior Notes to be redeemed and

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.30% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 25 basis points;

plus accrued interest to but excluding the Redemption Date.

(b) On or after November 15, 2042 (the date that is six months prior to the Maturity Date), the 4.30% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the 4.30% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

(c) Upon completion of the Exchange Offer, the Issuer may redeem 4.30% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the 4.30% Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(d) Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the 4.30% Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select 4.30% Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the 4.30% Senior Notes are listed, or if the 4.30% Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no 4.30% Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 4.30% Senior Notes to be redeemed pursuant to Section 3.01(c).

Section 3.02 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any 4.30% Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the 4.30% Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the 4.30% Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding 4.30% Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the 4.30% Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s 4.30% Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the 4.30% Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the 4.30% Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the 4.30% Senior Notes;

(iii) setting forth the payment date for the repurchase of the 4.30% Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any 4.30% Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all 4.30% Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering 4.30% Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the 4.30% Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all 4.30% Senior Notes or portions of 4.30% Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all 4.30% Senior Notes or portions of 4.30% Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the 4.30% Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of 4.30% Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of 4.30% Senior Notes properly tendered the purchase price for the 4.30% Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of 4.30% Senior Notes a new 4.30% Senior Note equal in principal amount to any unpurchased portion of any 4.30% Senior Notes surrendered; provided that each new 4.30% Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the 4.30% Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all 4.30% Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding 4.30% Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of 4.30% Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder 4.30% Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of 4.30% Senior Notes, beneficial owners of the 4.30% Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding 4.30% Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the 4.30% Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that 4.30% Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this Fifth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS FIFTH SUPPLEMENTAL INDENTURE AND THE 4.30% SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this Fifth Supplemental Indenture or the 4.30% Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Fifth Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this Fifth Supplemental Indenture and perform its obligations hereunder.

*    *    *

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (4.30% Senior Notes due 2043)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (4.30% Senior Notes due 2043)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (4.30% Senior Notes due 2043)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (4.30% Senior Notes due 2043)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

4.30% Senior Notes due 2043

 

   CUSIP No.             
   ISIN No.             
No.         $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on May 15, 2043.

Interest Payment Dates: May 15 and November 15.

Regular Record Dates: May 1 and November 1.

 

A-1

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:   Kansas City Southern
  By:  

 

  Name:  
  Title:  
  By:  

 

  Name:  
  Title:  

 

A-2

Trustee’s Certificate of Authentication

This is one of the 4.30% Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

Name:  
Title:  

 

A-3

[REVERSE SIDE OF NOTE]

Kansas City Southern

4.30% Senior Notes due 2043

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on May 15, 2043.

The Issuer promises to pay interest on the principal amount of this Note on each Interest Payment Date at the rate of 4.30% per annum.

Interest will be payable semiannually (to the holders of record of the 4.30% Senior Notes at the close of business on May 1 or November 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing [May 15, 2016].1

Interest on the 4.30% Senior Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, [from December 9, 2015];2 provided that, if there is no existing default in the payment of interest and this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the 4.30% Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the 4.30% Senior Notes as provided above on each Interest Payment Date to the persons who are Holders (as reflected in the Note Register at the close of business on May 1 and November 1 immediately preceding the Interest Payment Date), in each case, even if the 4.30% Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register). If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

A-4

3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the 4.30% Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the Fifth Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the 4.30% Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The 4.30% Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The 4.30% Senior Notes are general unsecured obligations of the Issuer.

 

5. Optional Redemption.

Prior to November 15, 2042, the 4.30% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the 4.30% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.30% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at then-current Treasury Rate, plus 25 basis points, plus accrued interest to but excluding the Redemption Date.

On or after November 15, 2042, the 4.30% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to 100% of the principal amount of the 4.30% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

Upon completion of the Exchange Offer, the Issuer may redeem 4.30% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the 4.30% Senior Notes are to be redeemed at any time, the Trustee shall select the 4.30% Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the 4.30% Senior Notes are listed or, if the 4.30% Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no 4.30% Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

A-5

7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of 4.30% Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 4.30% Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any 4.30% Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on 4.30% Senior Notes or portions of 4.30% Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its 4.30% Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the 4.30% Senior Notes with a copy to the Trustee. Any 4.30% Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on 4.30% Senior Notes or portions of 4.30% Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The 4.30% Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of 4.30% Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any 4.30% Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any 4.30% Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a 4.30% Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

A-6

12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the 4.30% Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the 4.30% Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the 4.30% Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the 4.30% Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the 4.30% Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the 4.30% Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the 4.30% Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the 4.30% Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any 4.30% Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any 4.30% Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 4.30% Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the Issuer or a Guarantor (i) commences a

 

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voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 4.30% Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the 4.30% Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the 4.30% Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the 4.30% Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the 4.30% Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the 4.30% Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the 4.30% Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the 4.30% Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the 4.30% Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

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20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

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[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.  

 

  
Please print or typewrite name and address including zip code of assignee  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  

                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

 

[    ] (a)   this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.

or

 

[    ] (b)   this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

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If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the Fifth Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the Fifth Supplemental Indenture, state the amount: $        

Date:

 

Your Signature:  

 

   
 

(Sign exactly as your name appears on the other side of this Note)

   
Signature Guarantee:  

 

     

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-13



Exhibit 4.7

Dated as of December 9, 2015

Sixth Supplemental Indenture

among

Kansas City Southern,

as Issuer

Each of the Guarantors Party Hereto

and

U.S. Bank National Association,

as Trustee

4.95% Senior Notes due 2045

SIXTH SUPPLEMENTAL INDENTURE (the “Sixth Supplemental Indenture”), dated as of December 9, 2015, among KANSAS CITY SOUTHERN, a Delaware corporation (the “Issuer”), the guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly incorporated and existing under the laws of the United States of America, as Trustee (together with its successors and assigns, in such capacity, the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuer, the guarantors party hereto and the Trustee have heretofore executed and delivered an Indenture, dated as of December 9, 2015 (the “Original Indenture” and, as hereby supplemented, the “Indenture”), providing for the issuance from time to time of one or more series of the Issuer’s Securities;

WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a series of Securities to be designated as the “4.95% Senior Notes due 2045” (herein referred to as the “4.95% Senior Notes”), the form and substance of the 4.95% Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Sixth Supplemental Indenture;

WHEREAS, Section 11.01(h) of the Original Indenture provides that the Issuer and the Trustee may provide for the issuance of additional Securities in accordance with the Original Indenture;

WHEREAS, Section 2.01 of the Original Indenture provides that various matters with respect to any series of Securities issued under the Indenture may be established in a supplemental indenture to the Original Indenture; and

WHEREAS, all acts and things necessary to make this Sixth Supplemental Indenture, when duly executed and delivered, a valid and binding instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Sixth Supplemental Indenture have been in all respects duly authorized.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and intending to be legally bound, the parties to this Sixth Supplemental Indenture hereby agree as follows:

ARTICLE I

RELATION TO INDENTURE; ADDITIONAL DEFINITIONS

Section 1.01 Relation to Indenture. This Sixth Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02 Additional Definitions. For all purposes of this Sixth Supplemental Indenture, capitalized terms used herein shall have the respective meanings specified below or, if not specified below, shall have the meaning specified in the Original Indenture.

“4.95% Senior Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

“Below Investment Grade Ratings Event” means, on any day within the 60-day period (which period shall be extended so long as the rating of the 4.95% Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control or (2) public notice by the Issuer of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control, that the 4.95% Senior Notes are rated below Investment Grade by two of the three Rating Agencies. Notwithstanding the foregoing, a Below

 

1

Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the ratings event).

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than the Issuer and its Subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the total Voting Stock of the Issuer or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares.

“Change of Control Payment Date” has the meaning assigned to it in Section 4.07(c) hereof.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (as measured from the date of redemption) (“Remaining Life”) of the 4.95% Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 4.95% Senior Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the Reference Treasury Dealer Quotations for such Redemption Date.

“Consolidated Net Assets” means total assets after deducting therefrom all current liabilities as set forth on the most recent publicly filed balance sheet of the Issuer and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles.

“Existing KCSM Notes” means any Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023, each issued by KCSM.

“Global Note” means a Security evidencing all or part of the 4.95% Senior Notes, substantially in the form attached as Exhibit A.

“Guarantors” means each subsidiary of the Issuer that execute a Note Guarantee, and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s), a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P), a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch) and the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Issuer.

“Interest Payment Dates” means February 15 and August 15 of each year, or if any such day is not a Business Day, the next succeeding Business Day, until maturity, beginning on February 15, 2016.

“Issue Date” means December 9, 2015.

“Maturity Date” has the meaning set forth in Section 2.03 hereof.

“Note Guarantee” means each Guarantee of the obligations with respect to the 4.95% Senior Notes issued by a Person pursuant to the terms of the Indenture.

“Original Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

“Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or Fitch ceases to rate the 4.95% Senior Notes or fails to make a rating of the 4.95% Senior Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Issuer (as certified by a resolution of the Issuer’s board of directors) as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to the 4.95% Senior Notes.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC (or their respective affiliates that are primary Government Securities dealers) and their respective successors; provided, however, that if any Reference Treasury Dealer is not at the applicable time a primary Government Securities dealer (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer selected by it.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for the 4.95% Senior Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. New York City time on the third Business Day preceding such Redemption Date.

“Treasury Rate” means, on any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the applicable Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to such Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the related Comparable Treasury Issue, calculated using a price for that Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to the corresponding Articles, Sections or Exhibits of this Sixth Supplemental Indenture. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Sixth Supplemental Indenture.

ARTICLE II

THE SERIES OF NOTES

Section 2.01 Title of the Notes. The 4.95% Senior Notes shall be designated as the “4.95% Senior Notes due 2045.”

Section 2.02 No Limitation on Aggregate Principal Amount. There shall be no limitation on the aggregate principal amount of 4.95% Senior Notes that may be outstanding.

Section 2.03 Stated Maturity. The Stated Maturity of the 4.95% Senior Notes shall be August 15, 2045 (the “Maturity Date”).

Section 2.04 Interest and Interest Rate. (a) The 4.95% Senior Notes shall bear interest at the rate of 4.95% per annum, and interest will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from and including the Issue Date. Such interest shall be payable semiannually in arrears, on the Interest Payment Dates. Interest on the 4.95% Senior Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest accrued on the 4.95% Senior Notes from the last Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

(b) The interest so payable on any Interest Payment Date shall be paid to the Persons in whose names the 4.95% Senior Notes are registered at the close of business on the record date for such Interest Payment Date, being the immediately preceding February 1 and August 1, as the case may be.

Section 2.05 Place of Payment. The place or places where the principal of and interest on the 4.95% Senior Notes shall be payable is the office or agency of the Issuer maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee, and any other place or places designated by the Issuer pursuant to the Indenture; provided that while the 4.95% Senior Notes are represented by one or more Global Securities registered in the name of the Depositary, or its nominee, the Issuer will cause payments of principal and interest on such Global Securities to be made to the Depositary or its nominee, as the case may be, by wire transfer to the extent, in the funds and in the manner required by agreements with, or regulations or procedures prescribed from time to time by the Depositary or its nominee, and otherwise in accordance with such agreements, regulations or procedures.

Section 2.06 Place of Registration or Exchange. The place where the Holders of the 4.95% Senior Notes may present the 4.95% Senior Notes for registration of transfer or exchange and may make notices and demands to or upon the Issuer in respect of the 4.95% Senior Notes shall be the Corporate Trust Office of the Trustee.

Section 2.07 Global Notes. (a) The 4.95% Senior Notes shall be issuable in whole or in part in the form of one or more Global Notes in definitive, book-entry form, without interest coupons. The Global Note shall be deposited on the Issue Date with, or on behalf of, the Depositary.

(b) The Depository Trust Company shall initially serve as Depositary with respect to the Global Note. Such Global Note shall bear the legend set forth in the form attached as Exhibit A.

Section 2.08 Form of Securities. The Global Note shall be substantially in the form attached as Exhibit A.

Section 2.09 Additional 4.95% Senior Notes. The Issuer may issue additional 4.95% Senior Notes under the Indenture. Each of the 4.95% Senior Notes issued on the Issue Date and any additional 4.95% Senior Notes subsequently issued shall each be treated as a single class for all purposes under the Indenture, unless otherwise provided in the Indenture; provided, however, that any additional 4.95%

Senior Notes that are not fungible with existing 4.95% Senior Notes for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing 4.95% Senior Notes. Unless the context otherwise requires, for all purposes of the Indenture, references to the 4.95% Senior Notes include any additional 4.95% Senior Notes actually issued.

ARTICLE III

REDEMPTION OF THE 4.95% SENIOR NOTES

Section 3.01 Optional Redemption. (a) Prior to February 15, 2045 (the date that is six months prior to the Maturity Date), the 4.95% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to the greater of:

(i) 100% of the principal amount of the 4.95% Senior Notes to be redeemed and

(ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.95% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 30 basis points;

plus accrued interest to but excluding the Redemption Date.

(b) On or after February 15, 2045 (the date that is six months prior to the Maturity Date), the 4.95% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the 4.95% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

(c) Upon completion of the Exchange Offer, the Issuer may redeem 4.95% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the 4.95% Senior Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

(d) Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Original Indenture; provided, however, that if less than all of the 4.95% Senior Notes are to be redeemed at any time, the Trustee (or Registrar if other than the Trustee) will select 4.95% Senior Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the 4.95% Senior Notes are listed, or if the 4.95% Senior Notes are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided, that no 4.95% Senior Note of $2,000 in principal amount or less shall be redeemed in part; provided, further, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 4.95% Senior Notes to be redeemed pursuant to Section 3.01(c).

Section 3.02 Mandatory Redemption; Sinking Fund Obligations. The Issuer shall have no obligation to redeem or purchase any 4.95% Senior Notes pursuant to any Mandatory Sinking Fund Payment.

ARTICLE IV

COVENANTS

Additional Covenants. Article IV of the Original Indenture shall be amended by adding the following new Sections thereto as set forth below for the benefit of the Holders of the 4.95% Senior Notes but no other series of Securities under the Original Indenture, whether now or hereafter issued and outstanding (except as may be provided in a future supplemental indenture to the Original Indenture):

Section 4.06 Limitation on Secured Indebtedness and Indebtedness of Non-Guarantor Subsidiaries. (a) If the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor creates or permits any lien of any kind upon (1) any stock or indebtedness, whether owned on the Issue Date or thereafter acquired, of any of the Issuer’s Significant Subsidiaries that is a Guarantor or (2) any indebtedness, whether owned on the Issue Date or thereafter acquired, of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor, in each case, to secure any Debt (other than the 4.95% Senior Notes) of the Issuer, any of the Issuer’s Subsidiaries or any other person, the Issuer will cause the outstanding 4.95% Senior Notes to be secured equally and ratably with that Debt, unless the aggregate principal amount of all such secured Debt then outstanding (together with any Debt outstanding under clauses (i), (iii), (iv) and (v) of Section 4.06(b)) would not exceed 10.0% of the Issuer’s Consolidated Net Assets. Subject to Section 4.06(b), this Section 4.06 does not (i) restrict any other property of the Issuer or its Subsidiaries or (ii) prohibit the sale by the Issuer or any of its Subsidiaries of any stock or indebtedness of any Subsidiary, including any Significant Subsidiary.

(b) The Issuer shall not permit any of its Subsidiaries that is not a Guarantor to incur any Debt, except:

(i) Debt with a final maturity of not more than 365 days;

(ii) intercompany Debt owed to the Issuer or any of its Subsidiaries;

(iii) Debt of any joint venture to which the Issuer or any of its Subsidiaries is a party;

(iv) any Existing KCSM Notes and any Secured Debt of any Subsidiary of the Issuer that is not a Guarantor, in each case, outstanding on the Issue Date; and

(v) Debt not otherwise permitted by this Section 4.06(b) in an aggregate principal amount, at any one time outstanding, not to exceed $150.0 million less the aggregate principal amount of any Existing KCSM Notes outstanding at the time of such incurrence (but not less than $0);

provided that, the limitations set forth in this Section 4.06(b) shall not apply to Meridian Speedway, LLC.

Section 4.07 Offer to Repurchase Upon Change of Control Repurchase Event.

(a) If a Change of Control Repurchase Event occurs, the Issuer will be required to make an offer to each Holder of the 4.95% Senior Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s 4.95% Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the 4.95% Senior Notes repurchased plus accrued interest, if any, to but excluding the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at the Issuer’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Issuer shall mail to each Holder of the 4.95% Senior Notes, with a copy to the Trustee, a notice:

(i) describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event;

(ii) offering to repurchase the 4.95% Senior Notes;

(iii) setting forth the payment date for the repurchase of the 4.95% Senior Notes, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed;

(iv) if mailed prior to the date of consummation of the Change of Control, stating that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice;

(v) stating that any 4.95% Senior Note not tendered will continue to accrue interest;

(vi) stating that, unless the Issuer defaults in the payment of the repurchase price, all 4.95% Senior Notes accepted for payment pursuant to the repurchase offer will cease to accrue interest after the payment date specified in the notice; and

(vii) specifying the procedure for tendering 4.95% Senior Notes.

(b) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the 4.95% Senior Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.07, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of such conflict.

(c) On the repurchase date following a Change of Control Repurchase Event (the “Change of Control Payment Date”), the Issuer will, to the extent lawful:

(i) accept for payment all 4.95% Senior Notes or portions of 4.95% Senior Notes properly tendered pursuant to the Issuer’s offer;

(ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of all 4.95% Senior Notes or portions of 4.95% Senior Notes properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the 4.95% Senior Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of 4.95% Senior Notes being purchased by the Issuer.

(d) The Paying Agent will promptly mail to each Holder of 4.95% Senior Notes properly tendered the purchase price for the 4.95% Senior Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder of 4.95% Senior Notes a new 4.95% Senior Note equal in principal amount to any unpurchased portion of any 4.95% Senior Notes surrendered; provided that each new 4.95% Senior Note will be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(e) The Issuer will not be required to make an offer to repurchase the 4.95% Senior Notes upon a Change of Control Repurchase Event if (i) a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer set forth in the Indenture and such third party purchases all 4.95% Senior Notes properly tendered and not withdrawn under its offer or (ii) a notice of redemption for all outstanding 4.95% Senior Notes has been given pursuant to Section 3.03 of the Original Indenture.

Section 4.08 Additional Guarantors. The Issuer shall cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or any of the Issuer’s Significant Subsidiaries that is a Guarantor to become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel satisfactory to the Trustee within 30 days of becoming a Guarantor of such Debt; provided that, for avoidance of doubt, none of KCSM or any other Subsidiary of the Issuer that is not a Domestic Subsidiary shall be required to become a Guarantor.

Section 4.09 Reports. (a) Whether or not the Issuer is required to file reports with the Commission, the Issuer shall file with the Commission all such reports and other information when and as the Issuer would be required to file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if the Issuer were subject thereto, unless the Commission does not permit such filings, in which case the Issuer shall provide such reports and other information to the Trustee (within the same time periods that would be applicable if the Issuer were required and permitted to file reports with the Commission) and instruct the Trustee to mail such reports and other information to Holders at their addresses set forth on the Note Register. The Issuer shall supply the Trustee and each Holder of 4.95% Senior Notes or shall supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding the foregoing sentence, the Trustee and each Holder 4.95% Senior Notes shall be deemed to have been supplied the foregoing reports and other information at the time the Trustee or such Holder may electronically access such reports and other information by means of the Commission’s homepage on the internet or at the Issuer homepage on the internet.

(b) For so long as any Notes remain outstanding, the Issuer will furnish to the Holders of 4.95% Senior Notes, beneficial owners of the 4.95% Senior Notes, bona fide prospective investors, securities analysts and market makers, upon their request, the reports described in clause (a) of this Section 4.09 and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Delivery of the reports and other information described in clause (a) of this Section 4.09 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports or other information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

ARTICLE V

MISCELLANEOUS PROVISIONS

Section 5.01 Effect of Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 of the Original Indenture of Covenant Defeasance, the Issuer and each of the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 thereof, be released from their obligations under Sections 4.06 and 4.07 hereof with respect to the outstanding 4.95% Senior Notes on and after the date the conditions set forth in Section 8.04 thereof are satisfied, and the 4.95% Senior Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that 4.95% Senior Notes will not be deemed outstanding for accounting purposes).

Section 5.02 Counterpart Originals. The Original Indenture, as supplemented by this Sixth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. This Sixth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 5.03 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SIXTH SUPPLEMENTAL INDENTURE AND THE 4.95% SENIOR NOTES.

Section 5.04 TIA Controls. Prior to the effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall be governed by such provisions.

Section 5.05 Severability. In case any provision in this Sixth Supplemental Indenture or the 4.95% Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 5.06 Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Sixth Supplemental Indenture, except that the Trustee represents that it is duly authorized to execute and deliver this Sixth Supplemental Indenture and perform its obligations hereunder.

*    *    *

IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed as of the day and year first above written.

 

KANSAS CITY SOUTHERN, as Issuer
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice President and Chief Financial Officer

 

Signature Page to Supplemental Indenture (4.95% Senior Notes due 2045)

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN DEVELOPMENT COMPANY, as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
TRANS-SERVE, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS HOLDINGS I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture (4.95% Senior Notes due 2045)

KCS VENTURES I, INC., as a Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
VEALS, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer
PABTEX, INC., as a Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President, Chief Financial Officer and Treasurer

 

Signature Page to Supplemental Indenture (4.95% Senior Notes due 2045)

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Michael M. Hopkins

  Name:   Michael M. Hopkins
  Title:   Vice President

 

Signature Page to Supplemental Indenture (4.95% Senior Notes due 2045)

EXHIBIT A

[FACE OF NOTE]

[Insert the Private Placement Legend, if applicable pursuant to the Indenture]

[Insert the Global Securities Legend, if applicable pursuant to the Indenture]

KANSAS CITY SOUTHERN

4.95% Senior Notes due 2045

 

   CUSIP No.             
   ISIN No.             
No.         $         

Kansas City Southern, a Delaware corporation (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum [of $        ] [as may be increased or decreased as set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] on August 15, 2045.

Interest Payment Dates: February 15 and August 15.

Regular Record Dates: February 1 and August 1.

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

Date:     Kansas City Southern
    By:  

 

    Name:  
    Title:  
    By:  

 

    Name:  
    Title:  

 

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Trustee’s Certificate of Authentication

This is one of the 4.95% Senior Notes described in the within-mentioned Indenture.

 

U.S. Bank National Association, as Trustee
By:  

 

Name:  
Title:  

 

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[REVERSE SIDE OF NOTE]

Kansas City Southern

4.95% Senior Notes due 2045

 

1. Principal and Interest.

The Issuer will pay the principal of this Note on August 15, 2045.

The Issuer promises to pay interest on the principal amount of this Note on each Interest Payment Date at the rate of 4.95% per annum.

Interest will be payable semiannually (to the holders of record of the 4.95% Senior Notes at the close of business on February 1 or August 1 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing [February 15, 2016].1

Interest on the 4.95% Senior Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, [from December 9, 2015];2 provided that, if there is no existing default in the payment of interest and this Note is authenticated between a Regular Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuer shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum borne by the 4.95% Senior Notes to the extent lawful and in accordance with the terms of the Indenture.

 

2. Method of Payment.

The Issuer will pay principal as provided above and interest (except defaulted interest) on the principal amount of the 4.95% Senior Notes as provided above on each Interest Payment Date to the persons who are Holders (as reflected in the Note Register at the close of business on February 1 and August 1 immediately preceding the Interest Payment Date), in each case, even if the 4.95% Senior Note is cancelled on registration of transfer or registration of exchange after such record date; provided that, with respect to the payment of principal, the Issuer will not make payment to the Holder unless this Note is surrendered to a Paying Agent.

The Issuer will pay principal, premium, if any, and, as provided above, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Issuer may pay principal, premium, if any, and interest by its check payable in such money. The Issuer may mail an interest check to a Holder’s registered address (as reflected in the Note Register). If a payment date is a date other than a Business Day at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

 

1  With respect to Notes issued on the Issue Date.
2  With respect to Notes issued on the Issue Date.

 

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3. Paying Agent and Registrar.

Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar. The Issuer may appoint or change any Paying Agent or Registrar without notice. The Issuer, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

 

4. Indenture.

The Issuer issued the 4.95% Senior Notes under an Indenture dated as of December 9, 2015 (as supplemented by the Sixth Supplemental Indenture dated as of December 9, 2015, the “Indenture”), among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), transfer agent, principal paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Registrar”). Capitalized terms herein are used as defined in the Indenture unless otherwise indicated. The terms of the 4.95% Senior Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The 4.95% Senior Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. The 4.95% Senior Notes are general unsecured obligations of the Issuer.

 

5. Optional Redemption.

Prior to February 15, 2045, the 4.95% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the 4.95% Senior Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 4.95% Senior Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at then-current Treasury Rate, plus 30 basis points, plus accrued interest to but excluding the Redemption Date.

On or after February 15, 2045, the 4.95% Senior Notes will be redeemable in whole or in part at any time and from time to time, at the Issuer’s option, at a Redemption Price equal to 100% of the principal amount of the 4.95% Senior Notes to be redeemed plus accrued interest to but excluding the Redemption Date.

Upon completion of the Exchange Offer, the Issuer may redeem 4.95% Senior Notes which are not exchanged in the Exchange Offer in an amount up to 2.0% of the original aggregate principal amount of the Notes issued at a Redemption Price of 100% of their principal amount plus accrued interest thereon to but excluding the Redemption Date.

 

6. Partial Redemption.

If less than all of the 4.95% Senior Notes are to be redeemed at any time, the Trustee shall select the 4.95% Senior Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the 4.95% Senior Notes are listed or, if the 4.95% Senior Notes are not listed on a national securities exchange, pro rata, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; provided that no 4.95% Senior Notes of $2,000 in principal amount or less shall be redeemed in part.

 

A-5

7. Notice of Redemption.

Notice of any redemption pursuant to Section 5 hereof will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of 4.95% Senior Notes to be redeemed at his or her last address as it appears in the Note Register; provided, redemption notices may not be mailed less than 3 days prior to a Redemption Date if the notice is issued with respect to 4.95% Senior Notes to be redeemed pursuant to the last paragraph of Section 5 hereof. Any 4.95% Senior Notes in original denominations larger than $2,000 may be redeemed in part. On and after the Redemption Date, interest ceases to accrue and the principal amount shall remain constant (using the principal amount as of the Redemption Date) on 4.95% Senior Notes or portions of 4.95% Senior Notes called for redemption, unless the Issuer defaults in the payment of the Redemption Price.

 

8. Repurchase upon Change of Control Repurchase Event.

Upon the occurrence of any Change of Control Repurchase Event, each Holder shall have the right to require the repurchase of its 4.95% Senior Notes by the Issuer in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof on the date of repurchase plus accrued interest, if any, to, but excluding, the date of repurchase.

A notice of such Change of Control Repurchase Event will be mailed within 30 days after any Change of Control Repurchase Event occurs or, at the Issuer’s option, prior to the Change of Control, but after public announcement of such Change of Control, to each Holder of the 4.95% Senior Notes with a copy to the Trustee. Any 4.95% Senior Notes in original denominations larger than $2,000 may be sold to the Issuer in part. On and after the Change of Control Payment Date, interest ceases to accrue on 4.95% Senior Notes or portions of 4.95% Senior Notes surrendered for purchase by the Issuer, unless the Issuer defaults in the payment of the repurchase price.

 

9. Denominations; Transfer; Exchange.

The 4.95% Senior Notes are in registered form without coupons in minimum denominations of $2,000 of principal amount and multiples of $1,000 in excess thereof. A Holder may register the transfer or exchange of 4.95% Senior Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer or exchange of any 4.95% Senior Notes selected for redemption. Also, it need not register the transfer or exchange of any 4.95% Senior Notes for a period of 15 days before a selection of Notes to be redeemed is made.

 

10. Persons Deemed Owners.

A Holder shall be treated as the owner of a 4.95% Senior Note for all purposes.

 

11. Unclaimed Money.

If money for the payment of principal, premium, if any, or interest remains unclaimed for two years, then, subject to applicable escheat law, the Trustee and the Paying Agent will pay the money back to the Issuer at its request. After that, Holders entitled to the money must look to the Issuer for payment, unless an abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

A-6

12. Discharge Prior to Redemption or Maturity.

The Issuer’s and the Guarantors’ obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the 4.95% Senior Notes or upon the irrevocable deposit with the Trustee of U.S. dollars or Government Securities sufficient to pay when due principal of and interest on the 4.95% Senior Notes to maturity or redemption, as the case may be.

 

13. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture, the 4.95% Senior Notes and the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in principal amount of the 4.95% Senior Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the 4.95% Senior Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the 4.95% Senior Notes and the Note Guarantees to, among other things, cure any ambiguity, omission, mistake, defect or inconsistency and make any change that does not adversely affect the legal rights of any Holder.

 

14. Restrictive Covenants.

The Indenture imposes certain limitations on the ability of (x) the Issuer and the Guarantors, among other things, to create or permit any lien or merge, consolidate or transfer substantially all of their assets and (y) the Issuer to permit its Subsidiaries that are not Guarantors to incur certain Debt. The Indenture also requires the Issuer to cause each Domestic Subsidiary that guarantees the Credit Agreement or any other Debt of the Issuer or a Significant Subsidiary of the Issuer that is a Guarantor to become a Guarantor of the 4.95% Senior Notes as set forth in the Indenture. Within 90 days after the end of each fiscal year, the Issuer must report to the Trustee on compliance with such covenants.

 

15. Successor Persons.

When a successor person or other entity assumes all the obligations of its predecessor under the 4.95% Senior Notes and the Indenture in accordance with the terms of the Indenture, the predecessor person will be released from those obligations.

 

16. Defaults and Remedies.

The following events constitute “Events of Default” under the Indenture: (a) default in the payment of principal of (or premium, if any, on) any 4.95% Senior Note when the same becomes due at maturity, upon acceleration, redemption or otherwise; (b) default in the payment of interest on any 4.95% Senior Note when due and such default continues for a period of 30 days; (c) the Issuer or a Guarantor defaults in the performance of any covenant of the Issuer or a Guarantor in the Indenture or under this Note (other than a default specified in clause (a) or (b) above), and such default continues for a period of 90 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 4.95% Senior Notes; (d) a court having jurisdiction in the premises enters a decree or order for (i) relief in respect of the Issuer or a Guarantor in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) the winding-up or liquidation of the affairs of the Issuer or a Guarantor and, in each case, such decree or order shall remain unstayed and in effect for a period of 30 consecutive days; (e) the Issuer or a Guarantor (i) commences a

 

A-7

voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law; (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or a Guarantor or for all or substantially all of the property and assets of the Issuer or a Guarantor or (iii) effects any general assignment for the benefit of creditors; (f) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor or Person acting on behalf of such Guarantor denies or disaffirms such Guarantor’s obligations under the Indenture or any Note Guarantee and such default continues for a period of 10 days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the 4.95% Senior Notes; or (g) (A) the Concession Title shall cease to grant to KCSM the rights provided therein as of the Issue Date and such cessation has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, (B) (x) the Concession Title shall for any reason be terminated and not reinstated within 30 days or (y) rights provided therein which were originally exclusive to KCSM shall become nonexclusive and the cessation of such exclusivity has had a material adverse effect on the Issuer and its Subsidiaries taken as a whole, or (C) the operations of the Northeast Rail Lines shall be commandeered or repossessed (a requisa) for a period of 90 days or more.

If an Event of Default occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the 4.95% Senior Notes then outstanding, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the 4.95% Senior Notes to be immediately due and payable.

Holders may not enforce the Indenture or the 4.95% Senior Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the 4.95% Senior Notes. Subject to certain limitations, Holders of a majority in principal amount of the 4.95% Senior Notes then outstanding may direct the Trustee in its exercise of any trust or power.

 

17. Trustee Dealings with Issuer.

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

18. No Personal Liability of Incorporators, Stockholders, Officers, Directors, or Employees.

No recourse for the payment of the principal of, premium, if any, or interest on any of the 4.95% Senior Notes issued under the Indenture or for any claim based on the Indenture or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in the Indenture, or in any of the 4.95% Senior Notes or the Note Guarantees or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or controlling person of the Issuer, any Guarantor or of any successor Person thereof. Each Holder, by accepting the 4.95% Senior Notes, waives and releases all such liability.

 

19. Authentication.

This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note.

 

A-8

20. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Kansas City Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Treasurer.

 

A-9

[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

 

  

 

Please print or typewrite name and address including zip code of assignee

  

 

  
the within Note and all rights thereunder, hereby irrevocably constituting and appointing  

                                          attorney to transfer said Note on the books of the Issuer with full power of substitution in the premises.

[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL NOTES OTHER THAN EXCHANGE NOTES,

OFFSHORE GLOBAL NOTES AND

OFFSHORE PHYSICAL NOTES]

In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date of an effective registration statement or (ii) the end of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:

[Check One]

 

[    ] (a)   this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.
or
[    ] (b)   this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

A-10

If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

 

Date:  

 

    

 

      NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Date:  

 

    

 

      NOTICE: To be executed by an executive officer

 

A-11

OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Note purchased by the Issuer pursuant to Section 4.07 of the Sixth Supplemental Indenture, check the Box: ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to Section 4.07 of the Sixth Supplemental Indenture, state the amount: $        

Date:

 

Your Signature:  

 

  
 

(Sign exactly as your name appears on the other side of this Note)

  
Signature Guarantee:  

 

     

 

A-12

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[●]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

 

Date of Exchange

    Amount of
decrease in
Principal Amount		    Amount of
increase in
Principal Amount
of this Global Note		    Principal Amount
of this Global Note
following such
decrease or
increase		    Signature of
authorized
signatory of
Trustee or
Custodian
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-13



Exhibit 4.8

KANSAS CITY SOUTHERN

$195,043,000 3.85% Senior Notes Due 2023

$437,571,000 4.30% Senior Notes Due 2043

$476,665,000 4.95% Senior Notes Due 2045

$244,820,000 Floating Rate Senior Notes Due 2016

$239,542,000 2.35% Senior Notes Due 2020

$439,123,000 3.00% Senior Notes Due 2023

REGISTRATION RIGHTS AGREEMENT

December 9, 2015

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

214 North Tryon Street, 17th Floor

Charlotte, NC 28255

as Lead Dealer Managers and Solicitation Agents (as defined below)

And

Morgan Stanley & Co. LLC

1585 Broadway

New York, NY 10036

as Co-Dealer Manager and Co-Solicitation Agent (as defined below)

Ladies and Gentlemen:

This Registration Rights Agreement (this “Agreement”) is made and entered into on the date first written above by and among Kansas City Southern, a Delaware corporation (the “Company”), the guarantors listed on Schedule A hereto (the “Guarantors”) and Citigroup Global Markets Inc. (“Citi”), J.P. Morgan Securities LLC (“JPM”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) acting as the Lead Dealer Managers (the “Lead Dealer Managers”) and solicitation agents (the “Lead Solicitation Agents”), and Morgan Stanley & Co. LLC, acting as co-dealer manager (the “Co-Dealer Manager” and, together with the Lead Dealer Managers, the “Dealer Managers”) and co-solicitation agent (the “Co- Solicitation Agent” and, together with the Lead Solicitation Agents, the “Solicitation Agents”).

This Agreement is made pursuant to the Dealer Manager and Solicitation Agent Agreement, dated November 9, 2015, by and among the Company, the Guarantors and the Dealer Managers (the “Dealer Manager Agreement”).

Pursuant to the Confidential Offering Memorandum and Consent Solicitation Statement dated November 9, 2015 (the “Offering Memorandum”), the Company made offers to exchange (the “Original Exchange Offers”):

(i) any and all of The Kansas City Southern Railway Company’s (“KCSR”) outstanding 3.85% Senior Notes due 2023 (the “KCSR 2023 Existing Notes”) for newly issued 3.85% Senior Notes due 2023 of the Company (the “3.85% KCS Notes due 2023”);

(ii) any and all of KCSR’s outstanding 4.30% Senior Notes due 2043 (the “KCSR 2043 Existing Notes”) for newly issued 4.30% Senior Notes due 2043 of the Company (the “2043 KCS Notes”);

(iii) any and all of KCSR’s outstanding 4.95% Senior Notes due 2045 (the “KCSR 2045 Existing Notes”) for newly issued 4.95% Senior Notes due 2045 of the Company (the “2045 KCS Notes”);

(iv) any and all outstanding Floating Rate Senior Notes due 2016 issued by Kansas City Southern de México, S.A. de C.V. (“KCSM”), a sociedad anónima de capital variable organized under the laws of the United Mexican States and wholly-owned subsidiary of the Company (the “KCSM 2016 Existing Notes”), for newly issued Floating Rate Senior Notes due 2016 of the Company (the “2016 KCS Notes”);

(v) any and all of KCSM’s outstanding 2.35% Senior Notes due 2020 (the “KCSM 2020 Existing Notes”) for newly issued 2.35% Senior Notes due 2020 of the Company (the “2020 KCS Notes”); and

(vi) any and all of KCSM’s outstanding 3.00% Senior Notes due 2023 (the “KCSM 2023 Existing Notes” and, together with the KCSR 2023 Existing Notes, the KCSR 2043 Existing Notes, the KCSR 2045 Existing Notes, the KCSM 2016 Existing Notes and the KCSM 2020 Existing Notes, the “Existing Notes”) for newly issued 3.00% Senior Notes due 2023 of the Company (the “3.00% KCS Notes due 2023” and, together with the 3.85% KCS Notes due 2023, the 2043 KCS Notes, the 2045 KCS Notes, the 2016 KCS Notes and the 2020 KCS Notes, the “KCS Notes”). Each of the 3.00% KCS Notes due 2023, the 3.85% KCS Notes due 2023, the 2043 KCS Notes, the 2045 KCS Notes, the 2016 KCS Notes and the 2020 KCS Notes may also be referred to herein as a “Series of KCS Notes.”

Each Series of KCS Notes will be issued pursuant to a base indenture (the “KCS Base Indenture”) (such KCS Base Indenture, together with each supplemental indenture thereto, dated as of the date hereof, pursuant to which a Series of KCS Notes will be issued, a “KCS Notes Indenture” and collectively, all such KCS Notes Indentures, the “KCS Notes Indentures”) dated as of the date hereof, among the Company, the Guarantors and U.S. Bank

 

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National Association, as trustee (the “Trustee”). The KCS Notes will be irrevocably and unconditionally guaranteed (the “Note Guarantees” and, together with the KCS Notes, the “Securities” and with respect to each Series of KCS Notes, a “Series of Securities”) as to payment of principal, premium, if any, interest and Additional Interest (as defined in the applicable KCS Notes Indenture), if any, jointly and severally, by the Guarantors and any additional guarantor parties thereto from time to time on a senior unsecured basis.

To satisfy a condition to the Dealer Managers’ obligations under the Dealer Manager Agreement, the Company and the Guarantors agree with the Dealer Managers for their benefit and the benefit of the Holders, as follows:

1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Dealer Manager Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings:

“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Affiliate” shall have the meaning specified in Rule 405 under the Act and the terms “controlling” and “controlled” shall have meanings correlative thereto.

“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.

“Closing Date” shall mean the date of the first issuance of the Securities.

“Commission” shall mean the Securities and Exchange Commission.

“Dealer Manager Agreement” shall have the meaning set forth in the preamble hereto.

“Dealer Managers” shall have the meaning set forth in the preamble hereto.

“DTC” shall mean The Depository Trust Company, New York, New York.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Exchange Offer Registration Period” shall mean the earlier of (x) the 180-day period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement, and (y) the date on which Broker-Dealers are no longer required to deliver a prospectus in connection with market-making or other trading activities.

 

3

“Exchange Offer Registration Statement” shall mean a registration statement of the Company on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Exchanging Dealer” shall mean any Holder (which may include the Dealer Managers) that is a Broker-Dealer and elects to exchange for the applicable Series of New Securities any Securities of a Series of Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of the Company) for such Series of New Securities.

“FINRA Rules” shall mean the Conduct Rules and the By-Laws of the Financial Industry Regulatory Authority, Inc.

“Holder” shall mean each person who becomes the registered owner of Registrable Securities under any KCS Notes Indenture.

“KCS Notes” shall have the meaning set forth in the preamble hereto.

“KCS Notes Indenture” and “KCS Notes Indentures” shall have the meaning set forth in the preamble hereto.

“Losses” shall have the meaning set forth in Section 6(d) hereof.

“Majority Holders” shall mean, on any date, Holders of a majority of the aggregate principal amount of Securities or New Securities outstanding and to be registered under a Shelf Registration Statement.

“Managing Underwriters” shall mean the investment bank or investment banks and manager or managers that administer an underwritten offering, if any, under a Registration Statement.

“New Securities” shall mean debt securities of the Company, guaranteed by the Guarantors and identical in all material respects to the applicable Series of Securities (except that the transfer restrictions shall be modified or eliminated, as appropriate) to be issued under the applicable KCS Notes Indenture.

“Offering Memorandum” shall have the meaning set forth in the preamble hereto.

“Original Exchange Offers” shall have the meaning set forth in the preamble hereto.

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto, including any and all exhibits thereto and any information incorporated by reference therein.

 

4

“Registered Exchange Offer” shall mean the proposed offer of the Company to issue and deliver to the Holders of each Series of Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for each Series of Securities, a like aggregate principal amount of the corresponding Series of New Securities.

“Registrable Securities” shall mean (i) Securities other than those that have been registered under a Registration Statement and exchanged or otherwise disposed of in accordance therewith and (ii) any New Securities, the resale of which by the Holder thereof requires compliance with the prospectus delivery requirements of the Act.

“Registration Default Damages” shall have the meaning set forth in Section 8 hereof.

“Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein.

“Securities” shall have the meaning set forth in the preamble hereto.

“Series of KCS Notes” shall have the meaning set forth in the preamble hereto.

“Series of New Securities” shall mean each series of New Securities.

“Series of Registrable Securities” shall mean each series of Registrable Securities.

“Series of Securities” shall have the meaning set forth in the preamble hereto.

“Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

“Shelf Registration Period” has the meaning set forth in Section 3(b)(ii) hereof.

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Trustee” shall have the meaning set forth in the preamble hereto.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

5

“Underwriter” shall mean any underwriter of Securities or New Securities in connection with an offering thereof under a Shelf Registration Statement.

2. Registered Exchange Offer. (a) To the extent not prohibited by any applicable law or applicable interpretation of the staff of the Commission, the Company shall as promptly as practicable prepare and file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Company shall use its commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Act and to complete the Registered Exchange Offer within 270 days of the Closing Date.

(b) Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for the applicable Series of New Securities (assuming that such Holder is not an Affiliate of the Company, acquires such New Securities in the ordinary course of such Holder’s business, has no arrangements with any person to participate in the distribution of such New Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States.

(c) In connection with the Registered Exchange Offer, the Company shall:

(i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal;

(ii) keep the Registered Exchange Offer open for not less than 20 Business Days and use its commercially reasonable efforts to keep the Registered Exchange Offer open for not more than 40 Business Days after the date notice thereof is mailed to the Holders (or, in each case, longer if required by applicable law);

(iii) use its commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required, under the Act to ensure that it is available for sales of New Securities by Exchanging Dealers during the Exchange Offer Registration Period;

(iv) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee, or an Affiliate of the Trustee;

(v) permit Holders to withdraw tendered Securities (in accordance with the procedures set forth in the Exchange Offer Registration Statement) at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open;

(vi) prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Company is conducting the Registered Exchange Offer in reliance on the position of the Commission

 

6

in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B) including a representation that the Company has not entered into any arrangement or understanding with any person to distribute the New Securities to be received in the Registered Exchange Offer and that, to the Company’s information and belief, each Holder participating in the Registered Exchange Offer is acquiring the New Securities in the ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the applicable Series of New Securities; and

(vii) comply in all material respects with all applicable laws.

(d) As soon as practicable after the expiration of the Registered Exchange Offer, the Company shall:

(i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;

(ii) deliver or cause to be delivered to the Trustee for cancellation in accordance with Section 4(s) hereof all Securities so accepted for exchange; and

(iii) cause the Trustee promptly to authenticate and deliver to each Holder of any Series of Securities a principal amount of the applicable Series of New Securities equal to the principal amount of such Series of Securities of such Holder so accepted for exchange.

(e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (i) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission’s letter to Shearman & Sterling LLP dated July 2, 1993 and similar no-action letters and (ii) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction, which must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that:

(A) any New Securities to be received by such Holder will be acquired in the ordinary course of business;

(B) at the time of the consummation of the Registered Exchange Offer, such Holder will have no arrangement or understanding with any person to participate in the distribution of the applicable Series of Securities or the applicable Series of New Securities within the meaning of the Act; and

(C) such Holder is not an Affiliate of the Company;

 

7

and to make such other representations as may be necessary under applicable Commission rules, regulations or interpretations to render the use of the Form S-4 or other appropriate form under the Act available.

3. Shelf Registration. (a) If (i) due to any change in law or applicable interpretations thereof by the Commission’s staff, the Company determines upon advice of its outside counsel that it is not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the Registered Exchange Offer is not consummated within 270 days of the date hereof; (iii) any Holder (other than the Dealer Managers) is not eligible to participate in the Registered Exchange Offer other than by reason of such Holder being an Affiliate of the Company; (iv) based on their reasonable opinion, the Dealer Managers so request with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer that are held by them following consummation of the Registered Exchange Offer, such request being in writing and delivered to the Company; or (v) in the case that the Dealer Managers participate in the Registered Exchange Offer, in their reasonable opinion the Dealer Managers do not receive freely tradeable New Securities in exchange for Securities (it being understood that (A) the requirement that the Dealer Managers deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of New Securities acquired in exchange for such Securities shall result in such New Securities being not “freely tradeable” and (B) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not “freely tradeable”), the Company shall effect a Shelf Registration Statement in accordance with subsection (b) below.

(b) (i) The Company shall as promptly as practicable file with the Commission and shall use its commercially reasonable efforts to cause to be declared effective under the Act within 270 days after the Closing Date, a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder (other than the Dealer Managers) shall be entitled to have the Securities or the New Securities, as applicable, held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder (it being understood that Holders who would have received freely transferable New Securities pursuant to the Registered Exchange Offer had they not (A) failed to duly tender their Securities for exchange pursuant to the Registered Exchange Offer, or otherwise failed to comply with the requirements of the Registered Exchange Offer as provided in Section 2 hereof or (B) failed to furnish to the Company such information as the Company may request in accordance with Section 4(o) hereof in connection with a Shelf Registration Statement, shall not retain any rights under this Agreement, including any right to have the Securities or the New Securities, as applicable, owned by them included in any Shelf Registration Statement).

(ii) The Company shall, except as permitted under Section 4(k)(ii) hereof, keep the Shelf Registration Statement continuously effective, supplemented and amended

 

8

as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period (the “Shelf Registration Period”) from the date the Shelf Registration Statement is declared effective by the Commission until (A) the first anniversary thereof or (B) the earlier date upon which all the Securities or the New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement.

(iii) The Company shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Act; and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

4. Additional Registration Procedures. In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply.

(a) The Company shall:

(i) furnish, not less than five Business Days prior to the filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing), to the Lead Dealer Managers and, with respect to any Shelf Registration Statement, to the Lead Dealer Managers and to Shearman & Sterling LLP and shall use its commercially reasonable efforts to reflect in each such document, when so filed with the Commission, such comments as the Lead Dealer Managers may reasonably propose;

(ii) include the information set forth in Annex A hereto on the facing page of the Exchange Offer Registration Statement, in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a section setting forth details of the Registered Exchange Offer, in Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and in Annex D hereto in the letter of transmittal, pursuant to the Registered Exchange Offer;

(iii) if requested by the Lead Dealer Managers, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Registration Statement; and

(iv) in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell the Securities or the New Securities, as applicable, pursuant to the Shelf Registration Statement as selling security holders.

 

9

(b) The Company shall ensure that:

(i) any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Act; and

(ii) any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) The Company shall advise the Lead Dealer Managers, the Holders of the Securities or the New Securities, as applicable, covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company a telephone or facsimile number and address for notices, and, if requested by any Lead Dealer Manager or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) of this Section 4(c) shall be accompanied by an instruction to suspend the use of the Prospectus until the Company shall have remedied the basis for such suspension):

(i) when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information;

(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose;

(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose; and

(v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, they (A) do not contain any untrue statement of a material fact and (B) do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

(d) The Company shall use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction and, if issued, to obtain as soon as possible the withdrawal thereof.

(e) The Company shall furnish to each Holder of the Securities or the New Securities, as applicable, covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

 

10

(f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities or New Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including the Preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities or the New Securities, as applicable, in connection with the offering and sale of the Securities or the New Securities, as applicable, covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(g) The Company shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

(h) The Company shall promptly deliver to the Dealer Managers, each Exchanging Dealer and each other person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such person may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by the Dealer Managers, any Exchanging Dealer and any such other person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.

(i) Prior to the Registered Exchange Offer or any other offering of Securities or New Securities pursuant to any Registration Statement, the Company shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and shall maintain such qualification in effect so long as required; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to service of process in suits in any such jurisdiction where it is not then so subject.

(j) The Company shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Securities or New Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request at least two Business Days prior to such sale of Securities or New Securities.

(k) (i) Upon the occurrence of any event contemplated by subsections (ii) through (v) of Section 4(c) above, the Company shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered, the

 

11

Prospectus will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 hereof shall be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(c) hereof to and including the date when the Dealer Managers, the Holders of the Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section.

(ii) Upon the happening of any event of the kind described in Section 4(c)(v) hereof, or the determination by the Company that, in its reasonable judgment and upon written advice of counsel, the continued effectiveness and use of the Shelf Registration Statement would require the disclosure of confidential information or interfere with any financing, acquisition, reorganization or other material transaction involving the Company, such Holder will forthwith discontinue disposition of Securities or New Securities pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(f) hereof (or a notice from the Company that such Holder may resume use of the existing Prospectus), and, if so directed by the Company, such Holder will deliver to the Company (at the Company’s expense) all copies in its possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Securities or New Securities current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Securities or New Securities pursuant to a Registration Statement, the Company shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have (A) received copies of the supplemented or amended Prospectus necessary to resume such dispositions or (B) a notice permitting use of the existing Prospectus. The Company may give any such notice only twice during any 365-day period and any such suspensions may not exceed 30 days for each suspension and there may not be more than two suspensions in effect during any 365-day period.

(l) Not later than the effective date of any Registration Statement, the Company shall provide a CUSIP number for each Series of New Securities registered under such Registration Statement and provide the Trustee with printed certificates for each Series of Securities or Series of New Securities registered under such Registration Statement, in a form eligible for deposit with DTC.

(m) The Company shall comply in all material respects with all applicable rules and regulations of the Commission and shall make generally available to its security holders an earnings statement satisfying the provisions of Section 11(a) of the Act as soon as practicable after the effective date of the applicable Registration Statement and in any event no later than 90 days after the end of a 12-month period (or 180 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the applicable Registration Statement.

 

12

(n) The Company shall cause the KCS Base Indenture to be qualified under the Trust Indenture Act in a timely manner.

(o) The Company may require each Holder of the Securities or the New Securities, as applicable, to be sold pursuant to any Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of such securities as the Company may from time to time reasonably require for inclusion in such Registration Statement. The Company may exclude from such Shelf Registration Statement the Securities or the New Securities, as applicable, of any Holder that fails to furnish such information within a reasonable time after receiving such request.

(p) In the case of any Shelf Registration Statement, the Company shall enter into customary agreements (including, if requested, an underwriting agreement in customary form) and take all other appropriate actions in order to expedite or facilitate the registration or the disposition of the Securities or the New Securities, as applicable, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 6 hereof.

(q) In the case of any Shelf Registration Statement, the Company shall:

(i) make reasonably available for inspection by the Holders of the Securities or the New Securities, as applicable, to be registered thereunder, any Underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such Underwriter all relevant financial and other records and pertinent corporate documents of the Company and its subsidiaries; provided, however, that, if any such records, documents or other information are related to pending or proposed acquisitions or dispositions, or otherwise related to matters reasonably considered by the Company to constitute sensitive or proprietary information, the Company need not provide such records, documents or information unless the foregoing parties enter into a confidentiality agreement in customary form and reasonably acceptable to such parties and the Company;

(ii) cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such Underwriter, legal counsel, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that such information may not be used for any other purpose than due diligence and provided further that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such Underwriter, legal counsel, accountant or agent, unless such disclosure is made in connection with an arbitration or court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality;

(iii) make such representations and warranties to the Holders of the Securities or the New Securities, as applicable, to be registered thereunder and the Underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Dealer Manager Agreement;

 

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(iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the Underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and Underwriters;

(v) obtain comfort letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of the Securities or the New Securities, as applicable, to be registered thereunder and the Underwriters, if any, provided that such letters need not be addressed to any Holder to whom, in the reasonable opinion of the Company’s independent public accountants, addressing such letter is not permissible under applicable accounting standards, in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings;

(vi) deliver such documents and certificates as may be reasonably requested by the Majority Holders of the applicable Series of Securities or Series of New Securities, as applicable, or the Managing Underwriters, if any, including those to evidence compliance with Section 4(k) hereof and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company or the Guarantors; and

(vii) if reasonably requested by any Holder of the Securities or the New Securities, as applicable, covered by a Shelf Registration Statement, (A) promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and (B) make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company has received notification of the matters to be incorporated in such filing.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 4(q) shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.

(r) In the case of any Exchange Offer Registration Statement, the Company shall:

(i) make reasonably available for inspection by the Lead Dealer Managers, and any legal counsel, accountant or other agent retained by the Lead Dealer Managers, all relevant financial and other records, pertinent corporate documents and properties of

 

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the Company and its subsidiaries; provided, however, that, if any such records, documents or other information is related to pending or proposed acquisitions or dispositions, or otherwise related to matters reasonably acceptable to such parties and the Company to constitute sensitive or proprietary information, the Company need not provide such records, documents or information unless the foregoing parties enter into a confidentiality agreement in customary form and reasonably acceptable to such parties and the Company;

(ii) cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Lead Dealer Managers or any such attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that such information may not be used for any purpose other than due diligence and provided further that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Lead Dealer Managers or any such attorney, accountant or agent, unless such disclosure is made in connection with an arbitration or court proceeding or required by law, or such information becomes available to the public through a third party without an accompanying obligation of confidentiality;

(iii) make such representations and warranties to the Dealer Managers, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Dealer Manager Agreement;

(iv) obtain opinions of counsel to the Company and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Lead Dealer Managers and their counsel, addressed to the Dealer Managers, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the Lead Dealer Managers or their counsel;

(v) obtain comfort letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the Dealer Managers, in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, or if requested by the Lead Dealer Managers or their counsel in lieu of a comfort letter, an agreed-upon procedures letter under the Attestation Standards Section 201, covering matters requested by the Lead Dealer Managers or their counsel; and

(vi) deliver such documents and certificates as may be reasonably requested by the Lead Dealer Managers or their counsel, including those to evidence compliance with Section 4(k) hereof and with conditions customarily contained in underwriting agreements;

 

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provided, however, that the Company will be required to perform the foregoing actions set forth in clauses (i) through (vi) only upon the reasonable request by the Lead Dealer Managers to the Company or the reasonable request in writing to the Company by one or more Broker-Dealers who certify to the Dealer Managers and the Company in writing that they anticipate they will receive New Securities for their own account in the Registered Exchange Offer for Securities that were acquired by such Broker-Dealer as a result of market-making or other trading activities, and, based on the position of the Commission as described in Section 2(e) hereof, will be required to satisfy the prospectus delivery obligation under the Act in connection with the resale of such New Securities; and provided further that the Company will not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement for a period exceeding the Exchange Offer Registration Period, and such Broker-Dealers shall not be authorized by the Company to deliver and shall not deliver such Prospectus after such period in connection with resales contemplated in this Section 4(r); and provided further that the Company will be obligated to deal only with one entity representing such Broker-Dealers, which shall be Citigroup Global Markets Inc., unless it elects not to act as such representative, and to pay the reasonable fees and expenses of only one counsel representing such Broker-Dealers, which shall be the counsel to the Dealer Managers, unless such counsel elects not to so act, and to cause to be delivered only one, if any, comfort letter with respect to the Prospectus in the form existing on the expiration of the Registered Exchange Offer and with respect to each subsequent amendment or supplement to the Exchange Offer Registration Statement, if any, effected during the period specified above.

The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 4(r) shall be performed at the close of the Registered Exchange Offer and the effective date of any post-effective amendment to the Exchange Offer Registration Statement.

(s) If a Registered Exchange Offer is to be consummated, upon delivery of any physical certificates representing the Securities by Holders to the Company (or to such other person as directed by the Company) in exchange for the physical certificates representing the New Securities, the Company shall mark, or cause to be marked, on the Securities so exchanged that such Securities are being cancelled in exchange for the New Securities. In no event shall the Securities be marked as paid or otherwise satisfied.

(t) cause the Securities or New Securities, as applicable, covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Securities or New Securities, as applicable, covered thereby or the Underwriter(s), if any.

(u) In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the FINRA Rules) thereof, whether as a Holder of such Securities or as an Underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company shall assist such Broker-Dealer in complying with the FINRA Rules.

(v) The Company shall use its commercially reasonable efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement.

 

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5. Registration Expenses. The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel (which shall initially be Shearman & Sterling LLP, but which may, with the written consent of the Lead Dealer Managers, be another nationally recognized law firm experienced in securities matters designated by the Majority Holders) to act as counsel for the Holders in connection therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Dealer Managers for the reasonable fees and disbursements of counsel acting in connection therewith. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Securities or New Securities, as applicable, pursuant to the Shelf Registration Statement.

6. Indemnification and Contribution. (a) The Company and the Guarantors agree to indemnify and hold harmless each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement, the Dealer Managers and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer, the directors, officers and employees of each such Holder, the Dealer Managers or Exchanging Dealer and each person who controls any such Holder, the Dealer Managers or Exchanging Dealer within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, including all documents incorporated by reference therein or in any preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of any preliminary Prospectus or the Prospectus, in the light of the circumstances under which they were made) not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that neither the Company nor any Guarantor will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the party claiming indemnification specifically for inclusion therein; provided further that with respect to any untrue statement or omission of a material fact made in any preliminary Prospectus, the indemnity agreement contained in this Section 6 shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage or liability purchased the Securities or New Securities, as the case may be, to the extent that any such loss, claim, damage or liability of such Holder occurs under the circumstance where it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (i) the untrue statement or omission of a material fact contained in the preliminary Prospectus was corrected in the Prospectus, (ii) the Company had previously furnished copies of the Prospectus to such Holder prior to the written confirmation of the sale of such Securities or New Securities and (iii) such loss, claim, damage or liability results from the fact that there was not sent or given

 

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to such person at or prior to the written confirmation of the sale of such Securities or New Securities, as the case may be, to such person, a copy of the Prospectus; and provided further that neither the Company nor any Guarantor shall be liable to an indemnified party with respect to any Prospectus or Registration Statement or any amendment or supplement thereof to the extent that any such loss, claim, damage, liability or action of such indemnified party arises out of, or is based upon, (i) the use of any Registration Statement during a period when a stop order has been issued by the Commission in respect thereof or (ii) the use of the Prospectus during a period when the use of the Prospectus has been suspended in accordance with the instructions of the Company because of the discovery of any untrue statement or omission of a material fact therein provided that all Holders of Securities or New Securities received prior written notice of such stop order or suspension and such indemnified party knowingly and voluntarily continued to use such Prospectus or Registration Statement. This indemnity agreement shall be in addition to any liability which the Company may otherwise have.

The Company and the Guarantors also agree to indemnify as provided in this Section 6(a) or contribute as provided in Section 6(d) hereof to Losses of each Underwriter, if any, of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees or agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification of the Dealer Managers and the selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 4(p) hereof.

(b) Each Holder of securities covered by a Registration Statement (including the Dealer Managers, but only if such Dealer Manager is a Holder, in such capacity) severally and not jointly agrees to indemnify and hold harmless the Company, the Guarantors, each of their respective directors, each of the Company’s officers who signs such Registration Statement and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and the Guarantors to each such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.

(c) Promptly after receipt by an indemnified party under this Section 6 or notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) of this Section 6 unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) of this Section 6. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set

 

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forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it or other indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.

(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 6 is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively “Losses”) to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the applicable Original Exchange Offer and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Dealer Manager be responsible, in the aggregate, for any amount in excess of the fees paid to such Dealer Manager with respect such Security in the applicable Original Exchange Offer, or in the case of a New Security, with respect to the Security that was exchangeable into such New Security, nor shall any Holder be responsible, in the aggregate for any amount in excess of the amount by which the total price at which Registrable Securities were sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission which resulted in such Losses, nor shall any Underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such Underwriter under the Registration Statement which resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company and the Guarantors shall be

 

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deemed to be equal to the sum of (i) the aggregate principal amount of Securities issued in the Original Exchange Offers and (ii) the total amount of additional interest which the Company was not required to pay as a result of registering the Securities or New Securities covered by the Registration Statement which resulted in such Losses. Benefits received by a Dealer Manager shall be deemed to be equal to the fees paid to such Dealer Manager less any expenses reimbursed pursuant to Section 4 of the Dealer Manager Agreement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or New Securities, as applicable, registered under the Act. Benefits received by any Underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 6, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or New Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Furthermore, notwithstanding the provisions of this Section 6, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6, each person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company or any Guarantor within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company or any Guarantor shall have the same rights to contribution as the Company and the Guarantors, subject in each case to the applicable terms and conditions of this Section 6.

(e) The provisions of this Section 6 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, the Company or any Guarantor or any of the officers, directors or controlling persons referred to in this Section 6, and will survive the sale by a Holder of securities covered by a Registration Statement.

7. Underwritten Registrations. (a) If any of the Securities or New Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders of the applicable Series of Securities or Series of New Securities, as applicable.

(b) No person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such person (i) agrees to sell such person’s Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and

 

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(ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

8. Registration Defaults. If any of the following events shall occur with respect to any Series of Securities, then the Company shall pay liquidated damages (the “Registration Default Damages”) to the Holders of such Series of Securities in respect of such Securities as follows:

(a) if on the 270th day following the Closing Date, neither the Registered Exchange Offer has been completed nor the Shelf Registration Statement has been declared effective, then Registration Default Damages shall accrue on such Series of Registrable Securities at a rate of 0.25% per annum and shall be payable in accordance with the interest payment provisions of such Securities; or

(b) if any Registration Statement required by this Agreement has been declared effective but ceases to be effective at any time at which it is required to be effective under this Agreement, then commencing on the day the Registration Statement ceases to be effective, Registration Default Damages shall accrue on such Series of Registrable Securities at a rate of 0.25% per annum and shall be payable in accordance with the interest payment provisions of such Securities;

provided, however, that (i) upon completion of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement (in the case of paragraph (a) above), or (ii) upon the effectiveness of the Registration Statement which had ceased to remain effective (in the case of paragraph (b) above), Registration Default Damages shall cease to accrue.

9. No Inconsistent Agreements. Neither the Company nor any Guarantor has entered into, and the Company and the Guarantors agree not to enter into, any agreement with respect to its respective securities that is inconsistent with the rights granted to the Holders herein or that otherwise conflicts with the provisions hereof.

10. Amendments and Waivers. The provisions of this Agreement may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Holders of a majority of the aggregate principal amount of the Registrable Securities outstanding; provided that, with respect to any matter that directly or indirectly affects the rights of the Dealer Managers hereunder, the Company shall obtain the written consent of the Dealer Managers against which such amendment, qualification, supplement, waiver or consent is to be effective; provided further that no amendment, qualification, supplement, waiver or consent with respect to Section 8 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder; and provided further that the provisions of this Section 10 may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of each affected Holder. Notwithstanding the foregoing (except the foregoing provisos), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case

 

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may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders of the applicable Series of Securities or Series of New Securities, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement.

11. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery:

(a) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 11, which address initially is, with respect to each Holder, the address of such Holder maintained by the registrar under the applicable KCS Notes Indenture;

(b) if to the Dealer Managers, initially at the address or addresses set forth in the Dealer Manager Agreement; and

(c) if to the Company or the Guarantors, initially at its address set forth in the Dealer Manager Agreement.

All such notices and communications shall be deemed to have been duly given when received.

The Dealer Managers or the Company by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

12. Remedies. Each Holder, in addition to being entitled to exercise all rights provided to it herein, in the applicable KCS Notes Indenture or, in the case of a Holder who is a Dealer Manager, in the Dealer Manager Agreement, or granted by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Guarantors agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate.

13. Successors. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns, including, without the need for an express assignment or any consent by the Company or any Guarantor, or subsequent Holders of Securities and the New Securities. The Company and the Guarantors hereby agree to extend the benefits of this Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

14. Jurisdiction. Each of the parties hereto agrees that any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any State or U.S. federal court in The City of New York and County of New York, and waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the jurisdiction of such courts in any suit, action or proceeding.

 

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15. Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Dealer Managers, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.

16. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. Delivery of an executed counterpart by facsimile or electronic .pdf shall be effective as delivery of a manually executed counterpart.

17. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.

18. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

19. Severability. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

20. Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

[Remainder of page intentionally left blank]

 

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, the Guarantors and the Dealer Managers.

 

Very truly yours,
KANSAS CITY SOUTHERN
  By:  

/s/ Michael W. Upchurch

    Name:   Michael W. Upchurch
    Title:   Executive Vice President, Chief Financial Officer and Attorney-in-Fact
GUARANTORS:
THE KANSAS CITY SOUTHERN RAILWAY COMPANY
GATEWAY EASTERN RAILWAY COMPANY
SOUTHERN DEVELOPMENT COMPANY
THE KANSAS CITY NORTHERN RAILWAY COMPANY
TRANS-SERVE, INC.
KCS HOLDINGS I, INC.
KCS VENTURES I, INC.
SOUTHERN INDUSTRIAL SERVICES, INC.
VEALS, INC.
PABTEX, INC.
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Attorney-in-Fact

 

Signature page to KCS Registration Rights Agreement

The foregoing Agreement is hereby confirmed and accepted as of the date first above written.

 

Citigroup Global Markets Inc.

By:  

/s/ Adam D. Bordner

  Name:   Adam D. Bordner
  Title:   Vice President

 

Signature page to KCS Registration Rights Agreement

J.P. Morgan Securities LLC
By:  

/s/ Som Bhattacharyya

  Name:   Som Bhattacharyya
  Title:   Vice President

 

Signature page to KCS Registration Rights Agreement

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

By:  

/s/ David Scott

  Name:   David Scott
  Title:   Director

 

Signature page to KCS Registration Rights Agreement

Morgan Stanley & Co. LLC
By:  

/s/ Francesco Cipollone

  Name:   Francesco Cipollone
  Title:   Executive Director

 

Signature page to KCS Registration Rights Agreement

SCHEDULE A

Guarantors

The Kansas City Southern Railway Company

Gateway Eastern Railway Company

Southern Development Company

The Kansas City Northern Railway Company

Trans-Serve, Inc.

KCS Holdings I, Inc.

KCS Ventures I, Inc.

Southern Industrial Services, Inc.

Veals, Inc.

Pabtex, Inc.

ANNEX A

Each broker-dealer that receives new securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where such securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The company has agreed that, starting on the expiration date and ending on the close of business 180 days after the expiration date, it will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution”.

ANNEX B

Each broker-dealer that receives new securities for its own account in exchange for securities, where such securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. See “Plan of Distribution”.

ANNEX C

PLAN OF DISTRIBUTION

Each broker-dealer that receives new securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where such securities were acquired as a result of market-making activities or other trading activities. The company has agreed that, starting on the expiration date and ending on the close of business 180 days after the expiration date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

The company will not receive any proceeds from any sale of new securities by brokers-dealers. New securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new securities. Any broker-dealer that resells new securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such new securities may be deemed to be an “underwriter” within the meaning of the Act and any profit of any such resale of new securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, such broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act.

For a period of 180 days after the expiration date, the company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The company has agreed to pay all expenses incident to the Exchange offer (including the expenses of one counsel for the holder of the securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the securities (including any broker-dealers) against certain liabilities, including liabilities under the Act.

[If applicable, add information required by Regulation S-K Items 507 and/or 508.]

ANNEX D

Rider A

PLEASE FILL IN YOUR NAME AND ADDRESS BELOW IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

Name:  

 

Address:  

 

 

 

Rider B

If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of New Securities and it has no arrangements or understandings with any person to participate in a distribution of the New Securities nor will it have any such arrangements or understandings upon consummation of the Exchange Offer. If the undersigned is a Broker-Dealer that will receive New Securities for its own account in exchange for Securities, it represents that the Securities to be exchanged for New Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Act.



Exhibit 10.1

 

 

 

Published Deal CUSIP Number: 48U15UAA0

Published Revolver CUSIP Number: 48U15UAB8

CREDIT AGREEMENT

Dated as of December 9, 2015

among

KANSAS CITY SOUTHERN

as Borrower

THE GUARANTORS FROM TIME TO TIME PARTY HERETO

as Guarantors

and

THE LENDERS AND ISSUING BANKS FROM TIME TO TIME PARTY HERETO

as Lenders and Issuing Banks

and

BANK OF AMERICA, N.A.

as Administrative Agent

and

JPMORGAN CHASE BANK, N.A.

and

CITIBANK, N.A.

as Co-Syndication Agents

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

J.P. MORGAN SECURITIES LLC

and

CITIGROUP GLOBAL MARKETS INC.

as Joint Lead Arrangers and Joint Bookrunning Managers

Kansas City Southern Credit Agreement

T A B L E  O F  C O N T E N T S

 

Section    Page  
ARTICLE I   
DEFINITIONS AND ACCOUNTING TERMS   

SECTION 1.01. Certain Defined Terms

      5   

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions

      33   

SECTION 1.03. Accounting Terms

      34   

SECTION 1.04. Currency Equivalents Generally

      34   

SECTION 1.05. Letter of Credit Amounts

      35   
ARTICLE II   
AMOUNTS AND TERMS OF THE ADVANCES   
AND THE LETTERS OF CREDIT   

SECTION 2.01. The Advances and the Letters of Credit

      35   

SECTION 2.02. Making the Advances

      37   

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit

      38   

SECTION 2.04. Repayment of Advances

      41   

SECTION 2.05. Termination or Reduction of the Commitments

      42   

SECTION 2.06. Prepayments

      42   

SECTION 2.07. Interest

      43   

SECTION 2.08. Fees

      44   

SECTION 2.09. Conversion of Advances

      44   

SECTION 2.10. Increased Costs, Etc.

      45   

SECTION 2.11. Payments and Computations

      46   

SECTION 2.12. Taxes

      48   

SECTION 2.13. Sharing of Payments, Etc.

      51   

SECTION 2.14. Use of Proceeds

      52   

SECTION 2.15. Defaulting Lenders

      52   

SECTION 2.16. Evidence of Debt

      55   

SECTION 2.17. Mitigation Obligations; Replacement of Lenders

      55   

SECTION 2.18. Incremental Advances

      56   

SECTION 2.19. Refinancing Amendments

      57   

SECTION 2.20. Extensions of Advances and Commitments

      57   
ARTICLE III   
CONDITIONS TO INITIAL EXTENSION OF CREDIT AND   
ISSUANCE OF LETTERS OF CREDIT   

SECTION 3.01. Conditions Precedent to Initial Extension of Credit

      60   

SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal

      62   

SECTION 3.03. Determinations Under Section 3.01

      62   

 

Kansas City Southern Credit Agreement

ARTICLE IV   
REPRESENTATIONS AND WARRANTIES   

SECTION 4.01. Representations and Warranties of the Borrower

      62   
ARTICLE V   
COVENANTS OF THE BORROWER   

SECTION 5.01. Affirmative Covenants

      67   

SECTION 5.02. Negative Covenants

      69   

SECTION 5.03. Reporting Requirements

      76   

SECTION 5.04. Financial Covenants

      78   
ARTICLE VI   
EVENTS OF DEFAULT   

SECTION 6.01. Events of Default

      78   

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default

      80   
ARTICLE VII   
THE ADMINISTRATIVE AGENT   

SECTION 7.01. Appointment and Authority

      81   

SECTION 7.02. Rights as a Lender

      81   

SECTION 7.03. Exculpatory Provisions

      81   

SECTION 7.04. Reliance by Administrative Agent

      82   

SECTION 7.05. Delegation of Duties

      83   

SECTION 7.06. Resignation of Administrative Agent

      83   

SECTION 7.07. Non-Reliance on Administrative Agent and Other Lenders

      84   

SECTION 7.08. No Other Duties, Etc.

      84   

SECTION 7.09. Administrative Agent May File Proofs of Claim

      84   
ARTICLE VIII   
GUARANTY   

SECTION 8.01. Guaranty; Limitation of Liability

      85   

SECTION 8.02. Guaranty Absolute

      86   

SECTION 8.03. Waivers and Acknowledgments

      87   

SECTION 8.04. Subrogation

      87   

SECTION 8.05. Guaranty Supplements

      88   

SECTION 8.06. [Reserved]

      88   

SECTION 8.07. Continuing Guaranty; Assignments

      88   

 

Kansas City Southern Credit Agreement

 

2

ARTICLE IX   
MISCELLANEOUS   

SECTION 9.01. Amendments, Etc.

      89   

SECTION 9.02. Notices, Etc.

      89   

SECTION 9.03. No Waiver; Remedies

      90   

SECTION 9.04. Costs and Expenses

      90   

SECTION 9.05. Right of Set-off

      92   

SECTION 9.06. Binding Effect

      92   

SECTION 9.07. Assignments and Participations

      92   

SECTION 9.08. Execution in Counterparts

      96   

SECTION 9.09. No Liability of the Issuing Banks

      96   

SECTION 9.10. Confidentiality

      96   

SECTION 9.11. Release of Guarantees

      96   

SECTION 9.12. Non-Consenting Lenders

      97   

SECTION 9.13. Patriot Act Notice

      97   

SECTION 9.14. Jurisdiction, Service of Process, Etc.

      97   

SECTION 9.15. Governing Law

      98   

SECTION 9.16. WAIVER OF JURY TRIAL

      98   

SECTION 9.17. The Platform

      98   

SECTION 9.18. Reliance by Administrative Agent, Issuing Banks and Lenders

      98   

SECTION 9.19. Electronic Execution of Assignments and Certain Other Documents

      98   

SECTION 9.20. No Advisory or Fiduciary Responsibility

      99   

SECTION 9.21. WAIVER OF IMMUNITIES

      99   

SECTION 9.22. Cashless Settlement

      99   

 

Kansas City Southern Credit Agreement

 

3

SCHEDULES     
Schedule I    -   Commitments and Applicable Lending Offices
Schedule II    -   Guarantors
Schedule III      Unrestricted Subsidiaries
Schedule 4.01(b)    -   Subsidiaries
Schedule 4.01(d)    -   Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(q)    -   Environmental Disclosure
Schedule 5.02      Effective Date Indebtedness

 

EXHIBITS
Exhibit A    -   Form of Note
Exhibit B    -   Form of Committed Loan Notice
Exhibit C    -   Form of Assignment and Acceptance
Exhibit D      Form of Affiliate Subordination Agreement
Exhibit E    -   Form of Solvency Certificate
Exhibit F    -   Form of Guaranty Supplement
Exhibit G-1-4      Form of U.S. Tax Compliance Certificates

 

Kansas City Southern Credit Agreement

 

4

CREDIT AGREEMENT

CREDIT AGREEMENT (this “Agreement”) dated as of December 9, 2015 among Kansas City Southern, a Delaware corporation (the “Borrower”), the Guarantors (as hereinafter defined), the Lenders (as hereinafter defined), the Issuing Banks (as hereinafter defined), Bank of America, N.A. (“Bank of America”), as administrative agent (together with any successor administrative agent appointed pursuant to Article VII, the “Administrative Agent” and, together with the Co-Syndication Agents, the “Agents”) for the Lender Parties (as hereinafter defined), JPMorgan Chase Bank, N.A. and Citibank, N.A. as co-syndication agents (the “Co-Syndication Agents”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunning managers (the “Lead Arrangers”).

PRELIMINARY STATEMENTS

1. WHEREAS, the Borrower has requested that the Lenders extend credit in the form of Revolving Credit Advances at any time and from time to time on and from the Effective Date and prior to the Termination Date in an aggregate principal amount at any one time outstanding (when taken together with the face amount of the Letters of Credit then outstanding) not to exceed $800,000,000. The Borrower has requested that the Issuing Banks issue Letters of Credit in an aggregate face amount at any one time outstanding not to exceed $25,000,000; and

2. WHEREAS, the Lenders are willing to extend such credit to the Borrower, and the Issuing Banks are willing to issue Letters of Credit for the account of the Borrower, in each case on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Additional Guarantors” has the meaning specified in Section 8.05.

“Administrative Agent” has the meaning specified in the recital of parties to this Agreement.

“Administrative Agent’s Account” means the account of the Administrative Agent specified by the Administrative Agent in writing to the Lender Parties from time to time.

“Advance” means a Revolving Credit Advance, a Letter of Credit Advance, or an Extended Revolving Credit Advance.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term “control” (including the terms “controlling”,

 

Kansas City Southern Credit Agreement

 

5

“controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

“Affiliate Subordination Agreement” means an affiliate subordination agreement, in substantially the form of Exhibit D hereto, as amended.

“Agency Fee Letter” means that certain letter agreement, dated as of October 21, 2015, among the Borrower, Bank of America and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as amended from time to time.

“Agents” has the meaning specified in the recital of parties to this Agreement.

“Agent Parties” has the meaning specified in Section 9.17.

“Agreement” has the meaning specified in the recital of parties to this Agreement.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable Commitment Fee Rate” means (a) from and after an Extension, with respect to any Extended Revolving Credit Commitments and Extended Revolving Credit Advances of a particular Class the Applicable Commitment Fee Rate for such Extended Revolving Credit Commitments and Extended Revolving Credit Advances shall be those set forth in the applicable definitive documentation with respect to such Class and (b) before an Extension, a percentage as set forth below per annum determined by reference to the Ratings then in effect:

 

Rating

    Applicable Commitment Fee Rate  

BBB+ or higher from S&P

Baa1 or higher from Moody’s

BBB+ or higher from Fitch

      0.125 % 

BBB from S&P

Baa2 from Moody’s

BBB from Fitch

      0.15 % 

BBB- from S&P

Baa3 from Moody’s

BBB- from Fitch

      0.20 % 

BB+ from S&P

Ba1 from Moody’s

BB+ from Fitch

      0.25 % 

BB or lower from S&P

Ba2 or lower from Moody’s

BB or lower from Fitch

      0.30 % 

For purposes hereof, (a) if only one of Fitch, S&P and Moody’s shall have in effect a Rating, the Applicable Commitment Fee Rate shall be determined by reference to the available Rating; (b) if the Borrower shall fail to maintain a Rating from all of Fitch, S&P and Moody’s, the Applicable

 

Kansas City Southern Credit Agreement

 

6

Commitment Fee Rate will be set in accordance with the lowest level of Ratings set forth above; (c) if only two of Fitch, S&P and Moody’s shall have in effect a Rating, the Applicable Commitment Fee Rate shall be determined by reference to the higher Rating unless such Ratings differ by more than one level, in which case the applicable Rating will be deemed to be the Rating one level below the higher of such Ratings; (d) if all three Rating Agencies have established Ratings and the Ratings shall fall within two different levels, the Applicable Commitment Fee Rate shall be based upon the Rating assigned by two of such Rating Agencies, or if the Ratings shall fall within three different levels, the Applicable Commitment Fee Rate shall be based upon the middle Rating; (e) if any Rating established by Fitch, S&P or Moody’s shall be changed, such change shall be effective as of the Business Day following the date on which such change is first announced publicly by the Rating Agency making such change; and (f) if Fitch, S&P or Moody’s shall change the basis on which Ratings are established, each reference to the Rating announced by Fitch, S&P or Moody’s, as the case may be, shall refer to the then equivalent rating by Fitch, S&P or Moody’s, as the case may be or, if there is no equivalent or such change would otherwise result in a change in the Applicable Commitment Fee Rate, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating basis and, pending the effectiveness of any such amendment, the Applicable Commitment Fee Rate shall be determined by reference to the Ratings of the other Rating Agencies (or, if the circumstances referred to in this clause (f) shall affect all such Rating Agencies, the Ratings most recently in effect prior to such change).

“Applicable Lending Office” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means:

(a) from and after an Extension, with respect to any Extended Revolving Credit Advances of a particular Class, the Applicable Margins for such Extended Revolving Credit Advances shall be those specified in the applicable definitive documentation with respect to such Class; and

(b) in respect of the other Facilities (and, for the avoidance of doubt, before an Extension), at any time, the Applicable Margin corresponding to the Rating in effect from time to time as described below:

 

Rating

    Applicable Margin
for Eurodollar Rate
Advances		     Applicable Margin for
Base Rate Advances		  

BBB+ or higher from S&P

Baa1 or higher from Moody’s

BBB+ or higher from Fitch

      1.125 %      0.125 % 

BBB from S&P

Baa2 from Moody’s

BBB from Fitch

      1.25 %      0.25 % 

BBB- from S&P

Baa3 from Moody’s

BBB- from Fitch

      1.50 %      0.50 % 

BB+ from S&P

Ba1 from Moody’s

BB+ from Fitch

      1.75 %      0.75 % 

BB or lower from S&P

Ba2 or lower from Moody’s

BB or lower from Fitch

      2.00 %      1.00 % 

 

Kansas City Southern Credit Agreement

 

7

For purposes hereof, (a) if only one of Fitch, S&P and Moody’s shall have in effect a Rating, the Applicable Margin shall be determined by reference to the available Rating; (b) if the Borrower shall fail to maintain a Rating from all of Fitch, S&P and Moody’s, the Applicable Margin will be set in accordance with the lowest level of Ratings set forth above; (c) if only two of Fitch, S&P and Moody’s shall have in effect a Rating, the Applicable Margin shall be determined by reference to the higher Rating unless such Ratings differ by more than one level, in which case the applicable Rating will be deemed to be the Rating one level below the higher of such Ratings; (d) if all three Rating Agencies have established Ratings and the Ratings shall fall within two different levels, the Applicable Margin shall be based upon the Rating assigned by two of such Rating Agencies, or if the Ratings shall fall within three different levels, the Applicable Margin shall be based upon the middle Rating; (e) if any Rating established by Fitch, S&P or Moody’s shall be changed, such change shall be effective as of the Business Day following the date on which such change is first announced publicly by the Rating Agency making such change; and (f) if Fitch, S&P or Moody’s shall change the basis on which Ratings are established, each reference to the Rating announced by Fitch, S&P or Moody’s, as the case may be, shall refer to the then equivalent rating by Fitch, S&P or Moody’s, as the case may be or, if there is no equivalent or such change would otherwise result in a change in the Applicable Margin, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating basis and, pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the Ratings of the other Rating Agencies (or, if the circumstances referred to in this clause (f) shall affect all such Rating Agencies, the Ratings most recently in effect prior to such change).

“Appropriate Lender” means, at any time, with respect to (a) the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or has made an Advance with respect to such Facility at such time and (b) the Letter of Credit Facility, (i) the Issuing Banks and (ii) if the other Revolving Credit Lenders have made Letter of Credit Advances pursuant to Section 2.03(d) that are outstanding at such time, each such other Revolving Credit Lender.

“Approved Fund” means any Fund that is administered or managed by (i) a Lender Party, (ii) an Affiliate of a Lender Party or (iii) an entity or an Affiliate of an entity that administers or manages a Lender Party.

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.07 or the definition of “Eligible Assignee”), and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit C hereto or any other form approved by the Administrative Agent.

“Attributable Debt” means, in connection with any Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the discount rate implied in the lease) of the obligations of the lessee for rental payments during the term of the lease.

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.01(c)(i).

 

Kansas City Southern Credit Agreement

 

8

“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

“Bank of America” has the meaning specified in the recital of parties to this Agreement.

“Bankruptcy Law” means any proceeding of the type referred to in Section 6.01(f) or Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate,” and (c) the Eurodollar Rate for an Interest Period of one month as of such time plus 1.00%. The “prime rate” is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(i).

“Borrower” has the meaning specified in the recital of parties to this Agreement.

“Borrower Materials” has the meaning specified in Section 5.03.

“Borrower’s Account” means the account of the Borrower specified by the Borrower in writing to the Administrative Agent from time to time.

“Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type and (in the case of a Eurodollar Rate Advance) having the same Interest Period made by the Revolving Credit Lenders.

“Business Day” means any day that is not a Saturday or Sunday or any other day on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, any day on which dealings are carried on in the London interbank market.

“Capitalized Lease Obligations” means with respect to any Person, the Obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which Obligations are, subject to the proviso to Section 1.03(a), required to be classified and accounted for as a capital lease on a balance sheet of such Person in accordance with GAAP and the amount of such Obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Collateralize” means, to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Banks or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances in an amount equal to 103% of such L/C Obligations or obligations or, if the Administrative Agent and each applicable Issuing Bank shall agree in their sole discretion,

 

Kansas City Southern Credit Agreement

 

9

other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and each applicable Issuing Bank. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents” of any Person means any of the following, to the extent owned by such Person: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) insured certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, is organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $500 million, in each case, having a maturity of not greater than 180 days from the date of acquisition thereof, (c) commercial paper maturing within 270 days from the date of acquisition thereof in an aggregate amount of no more than $20 million per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States and rated, at the time of acquisition, at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P, (d) investments, classified in accordance with GAAP as Current Assets of such Person, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions that have the highest commercial paper rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition, (e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (b) above, (f) investments substantially equivalent to those referred to in clauses (a) through (e) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above, or (g) such other liquid investments as shall be approved by the Administrative Agent.

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means (a) any Person that, at the time it enters into a Cash Management Agreement, is a Lender Party or an Affiliate of a Lender Party or (b) any Lender Party or Affiliate of a Lender Party that has entered into a Cash Management Agreement prior to the Effective Date, in each case in its capacity as a party to such Cash Management Agreement.

“CFC” means a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

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“Change of Control” shall be deemed to have occurred if (i) at any time, less than 50% of the members of the board of directors of the Borrower shall be (A) individuals who are members of such board on the Effective Date or (B) individuals whose election, or nomination for election by the Borrower’s stockholders, was approved by a vote of at least 50% of the members of the board then still in office who are members of the board on the Effective Date (or whose election or nomination has been approved as provided in this clause (B)), (ii) at any time, any person, or any two or more persons acting as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding or disposing of Equity Interests of the Borrower, shall become, according to public announcement or filing, the “beneficial owner” (as defined in Rule 13d-3 issued under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Borrower representing 30% or more (calculated in accordance with such Rule 13d-3) of the combined voting power of the Borrower’s then outstanding voting securities or (iii) a “Change of Control” (or similar event), as such term may be defined in any indenture or other agreement or instrument governing Material Debt, shall have occurred.

“Class”, when used in reference to (a) any Advance or Borrowing, refers to whether such Advance, or the Advances comprising such Borrowing, are Advances made under the Revolving Credit Facility or any tranche of Other Advances, (b) any Commitment, refers to whether such Commitment is a Revolving Credit Commitment or any Other Commitment relating to any tranche of Other Advances and (c) any Lender, refers to whether such Lender has an Advance or Commitment with respect to a particular Class of Advances or Commitments. The Revolving Credit Advances, the Other Advances that have different terms and conditions shall be construed to be in different Classes.

“Commitment” means a Revolving Credit Commitment, an Other Commitment, or a Letter of Credit Commitment.

“Commitment Fee” has the meaning specified in Section 2.08(a).

“Committed Loan Notice” means (a) a Notice of Borrowing, (b) a notice of conversion of Advances of one Type to the other, or (c) a notice of continuation of Eurodollar Rate Advances, in each case pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit B or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Concession Title” means KCSM’s right, for a period of 30 years, to be the exclusive provider (subject to certain trackage rights existing as of the Effective Date or arising from time to time thereafter) of freight transportation services over the Northeast Rail Lines and for an additional 20 years to be a non-exclusive provider of such services over the Northeast Rail Lines, granted by the Mexican government, subject in all cases to the terms and conditions of such grant, as in effect on June 23, 1997 and as amended on February 12, 2001 and November 22, 2006.

 

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“Confidential Information” means information that any Loan Party furnishes to the Administrative Agent or any Lender Party in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public other than as a result of a breach by such Agent or any Lender Party of its obligations hereunder or that is or becomes available to such Agent or such Lender Party from a source other than the Loan Parties that is not, to the best of such Agent’s or such Lender Party’s knowledge, acting in violation of a confidentiality agreement with a Loan Party.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Consolidated Interest Expense” means, for any period, the interest expense (including imputed interest expense in respect of Capitalized Lease Obligations, but excluding amortization of deferred financing costs) of the Borrower and its Consolidated Subsidiaries for such period, determined on a Consolidated basis in accordance with GAAP.

“Consolidated Net Assets” means, with respect to any Person, as of any date of determination, the Total Assets after deducting therefrom all current liabilities, in each case reflected on the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of the most recently ended fiscal quarter of such Person for which financial statements have been delivered to the Administrative Agent pursuant to Section 5.03(b) or (c), as applicable, determined on a Consolidated basis.

“Consolidated Net Income” means, for any period, the net income or loss of the Borrower and its Consolidated Subsidiaries for such period determined on a Consolidated basis in accordance with GAAP; provided that there shall be excluded (a) except with respect to determinations made on a Pro Forma Basis, the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with a Subsidiary or the date that such Person’s assets are acquired by a Subsidiary, (b) the income or loss of any Person that is not a Subsidiary, other than cash actually paid by such Person to the Borrower and its Consolidated Subsidiaries during such period in the form of dividends or other distributions (c) any debt retirement costs, (d) extraordinary gains and extraordinary losses and (e) that portion of the income or loss of any Person that is not a wholly owned Subsidiary that represents the amount of Equity Interests not owned by the Borrower or a Consolidated Subsidiary.

“Contingent Obligation” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor

 

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to make payment of such primary obligation, (iv) under Letters of Credit or (v) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include customary and reasonable indemnity obligations under any contractual obligation permitted under this Agreement, including, but not limited to, contractual obligations in respect of any acquisition, capital expenditure, investment or disposition of assets permitted under this Agreement (other than any such obligations with respect to Debt). The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414(b) or 414(c) of the Internal Revenue Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Internal Revenue Code, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Internal Revenue Code.

“Conversion”, “Convert” and “Converted” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.02 or 2.09.

“Co-Syndication Agents” has the meaning specified in the recital of parties to this Agreement.

“Credit Agreement Refinancing Debt” means unsecured Debt (whether in the form of notes or term loans or otherwise) of the Borrower issued after the Effective Date to replace, refinance or exchange for, in part, the Revolving Credit Facility; provided that (a) in the case such Debt is in the form of any revolving credit facility that replaces, refinances or is exchanged for, in part, the Revolving Credit Facility, such Debt shall not have a maturity date prior to the Termination Date with respect to the Revolving Credit Facility and (b) 100% of the net cash proceeds of such Debt shall be applied, on the date of the incurrence thereof, to prepay the Facilities.

“Current Assets” of any Person means, at any date of determination, all assets of such Person that would, in accordance with GAAP, be classified as current assets of a company conducting a business the same as or similar to that of such Person, after deducting adequate reserves in each case in which a reserve is proper in accordance with GAAP.

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than current accounts payable incurred in the ordinary course of such Person’s business), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person under any conditional sale or other title retention agreement with respect to property acquired by such Person, (e) all Capitalized Lease Obligations of such Person, (f) all Obligations of such Person in respect of bankers acceptances and as an account party in respect of letters of credit and letters of guaranty, (g) all Contingent Obligations and Obligations in respect of Securitization Transactions of such Person, (h) all Obligations of such Person in respect of Disqualified Equity Interests to the extent that the

 

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foregoing would constitute indebtedness or a liability in accordance with GAAP and (i) all indebtedness and other payment Obligations referred to in clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations (provided that, if the Person has not assumed or otherwise become liable in respect of such Debt, such Debt shall be deemed to be in an amount equal to the lesser of (x) the aggregate unpaid amount of Debt secured by such Lien and (y) the fair market value of the property to which such Lien relates). The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor.

“Debt for Borrowed Money” means, at any date of determination, the sum of, without duplication, (i) the aggregate principal amount of all Debt that, in accordance with GAAP, would be classified as indebtedness on the balance sheet of the Borrower and its Consolidated Subsidiaries at such date, and (ii) the aggregate amount of all Securitization Transactions of the Borrower and its Consolidated Subsidiaries at such date.

“Default” means any Event of Default or any event that would constitute an Event of Default but for the passage of time or the requirement that notice be given or both.

“Default Interest” has the meaning set forth in Section 2.07(b).

“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Advances within two Business Days of the date such Advances were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Banks, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letter of Credit Advances) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund an Advance hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Bankruptcy Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof

 

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by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Bank and each Lender.

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or (b) is redeemable at the option of the holder thereof, or (c) provides for the scheduled payment of dividends in cash, or (d) is or becomes convertible into or exchangeable for Debt or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, in whole or in part, on or prior to the date that is six months after the latest Termination Date (other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration right after an event of default); provided, that only the portion of such Equity Interests which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Equity Interests. Subject to the proviso in the immediately preceding sentence, the term “Disqualified Equity Interests” will also include any options, warrants or other rights that are convertible into Disqualified Equity Interests or that are redeemable at the option of the holder, or required to be redeemed, prior to the date that is six months after the latest Termination Date.

“Domestic Lending Office” means, (a) in the case of any Revolving Credit Lender, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto, or (b) in the case of any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” in the Assignment and Acceptance pursuant to which it became a Lender Party or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“Domestic Restricted Subsidiary” means any Restricted Subsidiary of the Borrower which is not a Foreign Subsidiary.

“EBITDA” means, at any date of determination, the sum, determined on a Consolidated basis, of Consolidated Net Income for such period, plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, including amortization of deferred financing costs, (iv) all extraordinary, unusual or non-recurring losses and expenses for such period, (v) non-cash expenses related to stock based compensation, (vi) fees and expenses directly incurred or paid in connection with (x) the Transactions, (y) to the extent not prohibited hereunder, acquisitions and dispositions, and (z) to the extent not prohibited hereunder, issuances or incurrence of Debt, issuances of Equity Interests or refinancing transactions and modifications of instruments of Debt, (vii) non-cash foreign exchange losses related to balance sheet revaluations, (viii) non-cash charges and expenses relating to Hedge Agreements and (ix) the aggregate amount of all other extraordinary, unusual or non-recurring, non-cash charges,

 

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expenses or losses reducing Consolidated Net Income during such period (including all associated reserves taken during such period on account of contingent cash payments that may be required in a future period) minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any all extraordinary, unusual or non-recurring gains for such period determined in accordance with GAAP for the most recently completed Measurement Period, (ii) non-cash foreign exchange gains related to balance sheet revaluations, (iii) non-cash gains relating to Hedge Agreements, and (iv) all cash payments made during such period on account of reserves and other non-cash charges, losses and/or expenses added to Consolidated Net Income in a previous period pursuant to preceding clauses (a)(vii), (a)(viii) and/or (a)(ix).

“Effective Date” means the date this Agreement becomes effective in accordance with Section 3.01.

“Eligible Assignee” means with respect to the Revolving Credit Facility, (a) a Lender Party; (b) an Affiliate of a Lender Party, (c) an Approved Fund and (d) any other Person (other than an individual) approved by (x) the Administrative Agent, (y) each of the Issuing Banks and (z) unless an Event of Default under Section 6.01(a) or (f) has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed, it being understood that the Borrower may withhold consent with respect to any Persons which are engaged in the freight rail transportation business in North and/or Central America, or any Person controlling, or under common control with, any such Person (the “Excluded Persons”); it being further acknowledged and understood that none of the lenders under the Existing Credit Agreements as of the Effective Date are, individually or in the aggregate, Excluded Persons as of the Effective Date); provided, however, neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

“Environmental Action” means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged injury or threat to the environment or health and safety as such relates to exposure to Hazardous Material, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, natural resources or health and safety as such relates to exposure to Hazardous Material, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Restricted Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

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“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ERISA Event” means (a) any Reportable Event; (b) a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA); (c) the filing pursuant to Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any member of the Controlled Group of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any member of the Controlled Group from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any member of the Controlled Group of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g) the receipt by the Borrower or any member of the Controlled Group of any notice, or the receipt by any Multiemployer Plan from the Borrower or any member of the Controlled Group of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or has been determined to be in “endangered” or “critical” status (within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA); or (h) the conditions for the imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Plan.

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Lending Office” means, (a) in the case of any Revolving Credit Lender, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto, or (b) in the case of any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” in the Assignment and Acceptance pursuant to which it became a Lender Party (or if no other office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“Eurodollar Rate” means:

(a) for any Interest Period with respect to a Eurodollar Rate Advance, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be

 

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designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b) for any interest calculation with respect to a Base Rate Advance (to the extent calculated based on clause (c) of the definition of “Base Rate”) on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two Business Days prior to such date for U.S. dollar deposits with a term of one month commencing that day; and

(c) if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

“Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.07(a)(ii).

“Events of Default” has the meaning specified in Section 6.01.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to the Recipient or required to be withheld or deducted from a payment to the Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Advance or Commitment (other than pursuant to an assignment request by the Borrower under Section 9.12) or (ii) such Lender changes its Applicable Lending Office, except in each case to the extent that, pursuant to Section 2.12, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Applicable Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.12(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

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“Existing Credit Agreements” means the KCSR Credit Agreement and the KCSM Credit Agreement.

“Extended Revolving Credit Advance” means the Revolving Credit Advance of any Revolving Credit Lender extended pursuant to an Extended Revolving Credit Commitment.

“Extended Revolving Credit Commitment” has the meaning specified in Section 2.20(b)(ii).

“Extension” has the meaning specified in Section 2.20(a).

“Extension Offer” has the meaning specified in Section 2.20(a).

“Facility” means the Revolving Credit Facility or the Letter of Credit Facility.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fiscal Year” means a fiscal year of the Borrower and its Consolidated Subsidiaries ending on December 31 in any calendar year.

“Fitch” means Fitch Ratings, Ltd, a division of Fitch, Inc.

“Foreign Lender Party” means any Lender Party that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia.

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to any Issuing Bank, such Defaulting Lender’s Pro Rata Share of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Bank other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

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“FSCHO Subsidiary” means any direct or indirect Subsidiary all of the assets of which consist of the equity and/or indebtedness, which is treated as equity for U.S. federal income tax purposes, of one of more CFCs.

“Fund” means any Person (other than an individual) that is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“GAAP” has the meaning specified in Section 1.03.

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

“Granting Lender” has the meaning specified in Section 9.07(k).

“Guaranteed Obligations” has the meaning specified in Section 8.01(a).

“Guaranty” means the guaranty of the Guarantors set forth in Article VIII together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(h), in each case as amended, amended and restated, modified or otherwise supplemented.

“Guarantors” means (i) the Borrower (other than with respect to its own Obligations), (ii) as of the Effective Date, the Restricted Subsidiaries of the Borrower listed on Schedule II hereto and (iii) each other Restricted Subsidiary of the Borrower that shall be required to execute and deliver a guaranty pursuant to Section 5.01(h).

“Guaranty Supplement” has the meaning specified in Section 8.05.

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, greenhouse gases and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity price hedging agreements and arrangements and other hedging agreements.

“Hedge Bank” means (a) any Person that, at the time it enters into a Hedge Agreement, is a Lender Party or an Affiliate of a Lender Party or (b) any Lender Party or Affiliate of a Lender Party that has entered into a Hedge Agreement prior to the Effective Date, in each case in its capacity as a party to such Hedge Agreement.

 

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“Honor Date” has the meaning specified in Section 2.03(d)(i).

“Incremental Amendment” has the meaning specified in Section 2.18(b).

“Incremental Facility Effective Date” has the meaning specified in Section 2.18(b).

“Incremental Revolving Credit Commitments” has the meaning specified in Section 2.18(a).

“Indemnified Party” has the meaning specified in Section 9.04(b).

“Indemnified Taxes” means Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document.

“Initial Extension of Credit” means the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit under this Agreement.

“Interest Coverage Ratio” means, at any date of determination, the ratio of (a) EBITDA to (b) Consolidated Interest Expense, in each case, for the most recently completed Measurement Period.

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one week, one month, two months, three months or six months (or, if agreed to by each Lender participating therein, twelve months thereafter), as the Borrower may, upon notice received by the Administrative Agent not later than 1:00 P.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select (or such shorter periods as the Borrower may select and may be available and acceptable to the Lenders); provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

(b) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(c) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

 

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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Interstate Commerce Act” means the Interstate Commerce Commission Termination Act of 1995, and the regulations promulgated thereunder.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuing Banks” means (a) the banks identified on Schedule I as the Issuing Banks and (b) any Eligible Assignee to which the Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07 so long as such Eligible Assignee expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the Administrative Agent of its Applicable Lending Office and the amount of its Letter of Credit Commitment, which shall be no less than the Letter of Credit Commitment of the assigning Issuing Bank (which information shall be recorded by the Administrative Agent in the Register), for so long as such Issuing Bank or Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment; provided that, if an Extension is effected in accordance with Section 2.20, then on the occurrence of the Termination Date in respect of the Revolving Credit Facility (ignoring, for the purposes of this proviso, clause (v) of the definition of “Termination Date”), each Issuing Bank shall, unless it elects otherwise in the definitive documentation with respect to such Extension, have the right to resign as such on, or on any date within twenty (20) Business Days after, the Termination Date in respect of the Revolving Credit Facility, upon not less than ten (10) days’ prior written notice thereof to the Borrower and the Administrative Agent and, in the event of any such resignation and upon the effectiveness thereof, the resigning Issuing Bank shall retain all of its rights hereunder and under the other Loan Documents as Issuing Bank with respect to all Letters of Credit theretofore issued by it (which Letters of Credit shall remain outstanding in accordance with the terms hereof until their respective expirations) but shall not be required to issue any further Letters of Credit hereunder. If at any time and for any reason (including as a result of resignations as contemplated by the last proviso to the preceding sentence), an Issuing Bank has resigned in such capacity in accordance with the preceding sentence and no other Issuing Banks exist at such time, then no Person shall be an Issuing Bank hereunder obligated to issue Letters of Credit unless and until (and only for so long as) a Lender (or Affiliate of a Lender) reasonably satisfactory to the Administrative Agent and the Borrower agrees to act as Issuing Bank hereunder.

“KCSM” means Kansas City Southern de Mexico, S.A. de C.V., a corporation with variable capital (sociedad anónima de capital variable) organized under the laws of Mexico.

“KCSM Credit Agreement” means that certain Second Amended and Restated Credit Agreement dated as of November 29, 2012, among, inter alia, KCSM, as borrower, the various financial institutions and other persons from time to time each as lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, amended and restated, modified or otherwise supplemented from time to time.

 

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“KCSR” means The Kansas City Southern Railway Company, a Missouri corporation.

“KCSR Credit Agreement” means that certain Second Amended and Restated Credit Agreement dated as of November 21, 2012, among KCSR, as borrower, the Borrower, as parent, the subsidiary guarantors named therein, as guarantors, the initial lenders, initial issuing bank and swing line bank each named therein, The Bank of Nova Scotia, as administrative agent and collateral agent, as amended, restated, amended and restated, modified or otherwise supplemented from time to time.

“L/C Collateral Account” means a Letter of Credit collateral deposit account in the name of the Administrative Agent and under the sole control and dominion of the Administrative Agent.

“L/C Disbursement” means a payment or disbursement made by the Issuing Bank pursuant to a Letter of Credit.

“L/C Obligations” means, as at any date of determination, the aggregate Available Amount under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including (without duplication) all Letter of Credit Advances. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.05. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“L/C Related Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by an Issuing Bank and the Borrower (or any Subsidiary) or in favor of such Issuing Bank and relating to such Letter of Credit.

“Lead Arrangers” has the meaning set forth in the recital of the parties to this Agreement.

“Lender Party” means any Lender and any Issuing Bank.

“Lenders” means (i) the banks, financial institutions and other institutional lenders identified on Schedule I and (ii) each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as such Person shall be party to this Agreement.

“Lenders Presentation” means the presentation to the Lenders on October 22, 2015 delivered in connection with the syndication of the Commitments.

“Letter of Credit” means any standby letter of credit issued hereunder.

“Letter of Credit Advance” means an advance made by an Issuing Bank or any Revolving Credit Lender pursuant to Section 2.03(d)(iii).

 

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“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an Issuing Bank.

“Letter of Credit Commitment” means, with respect to the Issuing Bank at any time, the amount set forth opposite the Issuing Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or, if the Issuing Bank has entered into an Assignment and Acceptance, set forth for the Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as the Issuing Bank’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05. As of the Effective Date, the aggregate Letter of Credit Commitment is $25,000,000.

“Letter of Credit Facility” means, at any time, an amount equal to the aggregate amount of the Issuing Banks’ Letter of Credit Commitment at such time, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“Leverage Ratio” means, at any date of determination, the ratio of (a) the aggregate amount of Debt for Borrowed Money at such date to (b) EBITDA for the most recently completed Measurement Period.

“Lien” means any lien, security interest or other charge or encumbrance of any kind, including, without limitation, the lien or retained security title of a conditional vendor.

“Loan Documents” means (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the Agency Fee Letter, (v) each Letter of Credit Application, and (vi) solely where the term “Loan Documents” is used or referred to in Section 2.11(f), Article VII or Section 9.11 hereof or in the Guaranty, each Cash Management Agreement and Hedge Agreement, in each case, to the extent entered into by and between any Loan Party and any Cash Management Bank or Hedge Bank, as the case may be, in each case as amended.

“Loan Parties” means the Borrower and the Guarantors.

“Margin Stock” has the meaning specified in Regulation U.

“Material Adverse Change” means any material adverse change in the business, financial condition, operations, performance or properties of the Borrower and its Subsidiaries, taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender Party under any Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is or is to be a party.

“Material Debt” means (i) Debt (other than the Obligations hereunder) and (ii) obligations in respect of any Hedge Agreement of the Borrower or its Restricted Subsidiaries, in an aggregate principal amount exceeding $75,000,000. For purposes of determining Material Debt, the “principal amount” of the obligations of the Borrower or any Restricted Subsidiary in respect of any Hedge Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Hedge Agreement were terminated at such time.

 

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“Measurement Period” means, at any date of determination, the most recently completed four consecutive fiscal quarters of the Borrower ending on or prior to such date.

“Meridian Speedway” means Meridian Speedway, LLC, a Delaware limited liability company.

“Minimum Extension Condition” has the meaning specified in Section 2.20(c).

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a Plan that is a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA as to which the Borrower or any member of the Controlled Group may have any liability.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all or all affected Lenders in accordance with the terms of Section 9.01 and (ii) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Extension Notice Date” has the meaning specified in Section 2.01(c)(i).

“Note” means a promissory note of the Borrower payable to the order of any Revolving Credit Lender, in substantially the form of Exhibit A hereto.

“Notes Exchange” means the transaction whereby the Borrower shall have offered to exchange any and all of (a) the 3.85% Senior Notes due 2023, 4.30% Senior Notes due 2043 and 4.95% Senior Notes due 2045 issued by KCSR (collectively, the “KCSR Notes”) and (b) the Floating Rate Senior Notes due 2016, 2.35% Senior Notes due 2020 and 3.00% Senior Notes due 2023 issued by KCSM (collectively, the “KCSM Notes”), for corresponding notes of like tenor and coupon issued by the Borrower.

“Notice of Borrowing” means a notice of borrowing consisting of simultaneous Advances of the same Type and, in the case of Eurodollar Rate Advances, having the same Interest Period made by each of the Lenders pursuant to Section 2.02(a).

“Notice of Issuance” has the meaning specified in Section 2.03(a).

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest (including, without limitation, Post Petition Interest), Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

 

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Without further limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents shall include the Obligations of the Borrower and its Subsidiaries under any Cash Management Agreements or any Hedge Agreements, to the extent such agreements are entered into by and between the Borrower and/or any of its Subsidiaries and any Cash Management Bank or Hedge Bank, as applicable.

“Other Advances” means one or more Classes of Advances that result from an Extension or a Refinancing Amendment.

“Other Commitments” means one or more Classes of Commitments hereunder that result from an Extension or a Refinancing Amendment.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between the Administrative Agent or such Lender Party and the jurisdiction imposing such Tax (other than connections arising from the Administrative Agent or such Lender Party having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Advance or Loan Document).

“Other Taxes” means any and all present or future recording, stamp, documentary, excise, transfer, sales, property, or similar taxes, charges or levies arising from any payment made hereunder or under the Notes or under any other Loan Document or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement, the Notes or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.17).

“Participant Register” has the meaning specified in Section 9.07(l).

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Liens” means such of the following: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b); (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings; (c) pledges or deposits in the ordinary course of business, to secure obligations under workers’ compensation laws or similar legislation, or to secure public or statutory obligations; (d) deposits to secure the performance of bids, trade contracts and leases (other than Debt), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (e) Liens securing judgments (or the payment of money not constituting a Default under Section 6.01(g)) or securing appeal or other surety bonds related to such judgments; (f) easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such Lien is attached or with the Borrower’s or Restricted Subsidiary’s

 

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ability to conduct its business as currently conducted or to utilize such property for its intended purpose, (g) licenses, leases or subleases granted to others that do not materially interfere with the ordinary course of the business; (h) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the import of goods; and (i) Liens of the type described in Section 4-210 of the Uniform Commercial Code (or any similar provision of applicable law) or created under the deposit agreements, treasury management agreements, credit card merchant agreements or similar agreements relating to any account included with the definition of Cash Equivalent.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which the Borrower or any member of the Controlled Group may have any liability.

“Platform” has the meaning specified in Section 5.03.

“Post Petition Interest” means all interest and expenses accruing after the commencement of a proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding.

“Preferred Interests” means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or priority over any other Equity Interests issued by such Person upon any distribution of such Person’s property and assets, whether by dividend or upon liquidation.

“Pro Forma Basis” means, with respect to the calculation of the Leverage Ratio, the Interest Coverage Ratio or any other calculation under any applicable provision of the Loan Documents, as of any date, that pro forma effect will be given to the Transactions, any acquisition or investment, any issuance, incurrence, assumption or permanent repayment of Debt (including Debt issued, incurred or assumed as a result of, or to finance, any relevant transaction and for which any such financial ratio or other calculation is being calculated) and all sales, transfers and other dispositions or discontinuance of any Subsidiary, line of business or division, or any conversion of a Restricted Subsidiary to an Unrestricted Subsidiary or of an Unrestricted Subsidiary to a Restricted Subsidiary, in each case that have occurred during the four consecutive fiscal quarter period of the Borrower being used to calculate such financial ratio (the “Reference Period”), or subsequent to the end of the Reference Period but prior to such date or prior to or simultaneously with the event for which a determination under this definition is made (including any such event occurring at a Person who became a Restricted Subsidiary after the commencement of the Reference Period), as if each such event occurred on the first day of the Reference Period.

“Pro Rata Share” of any amount means, with respect to any Revolving Credit Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the Revolving Credit Facility at such time (or, if the Revolving Credit

 

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Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately prior to such termination); provided that, notwithstanding anything to the contrary contained herein, the foregoing shall be subject to the express provisions of Sections 2.18, 2.19 and 2.20.

“Public Lender” has the meaning specified in Section 5.03.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guaranty becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Railway Labor Act” means the Railway Labor Act, as amended from time to time.

“Rating Agencies” means Fitch, S&P and Moody’s.

“Ratings” means the non-credit enhanced long-term senior unsecured debt rating of the Borrower by each of S&P, Moody’s or Fitch.

“Recipient” means (a) the Administrative Agent, (b) any Lender or (c) any Issuing Bank, as applicable.

“Refinancing” means the repayment in full and termination of the Debt under the Existing Credit Agreements on the Effective Date.

“Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower executed by each of (a) each Loan Party, (b) the Administrative Agent and (c) each Lender or other Person that agrees to provide any portion of the Credit Agreement Refinancing Debt being incurred pursuant thereto, in accordance with Section 2.19.

“Register” has the meaning specified in Section 9.07(d).

“Regulation A” means Regulation A of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Related Indemnified Party” of an Indemnified Party means (a) any Subsidiary of such Indemnified Party, (b) the respective directors, officers or employees of such Indemnified Party or any of its Subsidiaries and (c) the respective agents of such Indemnified Party or any of its Subsidiaries, in the case of this clause (c), acting at the instructions of such Indemnified Party.

“Reportable Event” means any reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section with respect to a Plan, excluding, however, such

 

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events as to which the PBGC by regulation or by technical update waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event; provided that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any waiver in accordance with Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA.

“Required Lenders” means, at any time, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, and (c) the aggregate Unused Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, and (C) the Unused Revolving Credit Commitment of such Lender at such time. For purposes of this definition, the aggregate principal amount of Letter of Credit Advances owing to any Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer, secretary, assistant secretary or controller of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” has the meaning specified in Section 5.02(g).

“Restricted Subsidiary” means any Subsidiary that is not an Unrestricted Subsidiary.

“Revolving Credit Advance” has the meaning specified in Section 2.01(a).

“Revolving Credit Commitment” means, collectively, with respect to any Revolving Credit Lender at any time, (a) the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” and (b) if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d), in each case, as such Lender’s “Revolving Credit Commitment”, may be reduced at or prior to such time pursuant to Section 2.05 or increased at or prior to such time pursuant to Section 2.18.

“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Advances and such Revolving Credit Lender’s participation in L/C Obligations at such time.

 

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“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means any Lender that has a Revolving Credit Commitment.

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

“Sale and Leaseback Transaction” means any arrangement, directly or indirectly, whereby any Person shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions.

“Securitization Transaction” means any transfer by the Borrower or any Restricted Subsidiary of accounts receivable or interests therein (a) to a trust, partnership, corporation or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or any successor transferee of Debt or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests or (b) directly to one or more investors or other purchasers; provided that recourse to the Borrower or any of its Restricted Subsidiaries in connection with such transaction shall be limited to the extent customary for similar transactions in the applicable jurisdictions (including, to the extent applicable, in a manner consistent with the delivery of a “true sale”/“absolute transfer” opinion with respect to such transfer). The amount of any Securitization Transaction shall be deemed at any time to be the aggregate principal or stated amount of the Debt or other securities referred to in the preceding sentence or, if there shall be no such principal or stated amount, the uncollected amount of the accounts receivable transferred pursuant to such Securitization Transaction net of any such accounts receivable that have been written off as uncollectible.

 

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“Significant Subsidiary” means any Domestic Restricted Subsidiary (other than a FSCHO Subsidiary) (a) the Consolidated revenues of which for the most recent Fiscal Year for which audited financial statements have been delivered pursuant to Section 5.03 were greater than 5% of the Consolidated revenues of the Borrower and its Subsidiaries for such Fiscal Year or (b) the Consolidated tangible assets of which as of the end of such Fiscal Year were greater than 5% of the Consolidated tangible assets of the Borrower and its Subsidiaries as of such date; provided that (i) the aggregate Consolidated revenues of all Domestic Restricted Subsidiaries that are not Significant Subsidiaries for such Fiscal Year shall not exceed 10% of the Consolidated revenues of the Borrower and its Subsidiaries for such Fiscal Year and (ii) the aggregate Consolidated tangible assets of all Domestic Restricted Subsidiaries that are not Significant Subsidiaries as of the end of such Fiscal Year shall not exceed 10% of the Consolidated tangible assets of the Borrower and its Subsidiaries as of such date. If at any time the condition set forth in clause (i) or (ii) shall not be met, then the Borrower shall at such time designate one or more Domestic Restricted Subsidiaries as Significant Subsidiaries to the extent necessary to eliminate the applicable excess described in such clause (i) or (ii).

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“SPC” has the meaning specified in Section 9.07(k).

“Subordinated Obligations” has the meaning specified in Section 8.06.

“Subsidiary” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries. Unless otherwise specified, all references herein to a “Subsidiary” or “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Redesignation” has the meaning specified in the definition of “Unrestricted Subsidiary”.

“Surviving Debt” means Debt of each Loan Party and its Restricted Subsidiaries outstanding immediately before and permitted to be remain outstanding after giving effect to the Initial Extension of Credit.

 

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“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding), and all liabilities with respect thereto, imposed by any Governmental Authority.

“Termination Date” means the earlier of (a) the date of termination in whole of the Revolving Credit Commitments and the Letter of Credit Commitment pursuant to Section 2.05 or 6.01 and (b) (i) December 9, 2020, (ii) for the purposes of any Credit Agreement Refinancing Debt incurred pursuant to this Agreement, the termination date specified in the applicable Refinancing Amendment and (iii) for the purposes of any Extended Revolving Credit Commitment, the extended Termination Date specified in the applicable Extension Offer.

“Total Assets” means, as of any date of determination, the total amount of all assets of the Borrower and its Consolidated Subsidiaries, determined in accordance with GAAP, as shown on the most recent financial statements of the Borrower delivered pursuant to Section 5.03(b) or (c) (or if such determination is to be made prior to the first delivery of financial statements pursuant to Section 5.03(b) or (c), the financial statements referred to in Section 4.01(g)).

“Transaction” means the transactions contemplated by this Agreement and the other Loan Documents.

“Type” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate .

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance).

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, as applicable.

“United States” and “U.S.” mean the United States of America.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.12(e)(ii)(B)(3).

“Unfunded Pension Liability” of any Plan shall mean the excess of a Plan’s benefits liabilities under Section 4001(a)(16) of ERISA over the current value of such Plan’s assets, determined in accordance with the assumptions used for funding the Plan pursuant to Section 412 of the Internal Revenue Code for the applicable plan year.

“Unreimbursed Amount” has the meaning specified in Section 2.03(d)(i).

 

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“Unrestricted Subsidiaries” means (a) until it is designated as a Restricted Subsidiary pursuant to a Subsidiary Redesignation, each Subsidiary of the Borrower listed on Schedule III and (b) any Subsidiary of the Borrower that is designated by the Borrower after the Effective Date as an Unrestricted Subsidiary hereunder by written notice to the Administrative Agent; provided, that the Borrower shall only be permitted to so designate any new Unrestricted Subsidiary after the Effective Date if (i) no Default has occurred and is continuing or would result therefrom, (ii) on a Pro Forma Basis after giving effect to each such designation, the Borrower shall be in compliance with the covenants set forth in Section 5.04 as of the last day of the most recently ended fiscal quarter and (iii) such Subsidiary shall have been designated an “unrestricted subsidiary” (or otherwise not be subject to the covenants and defaults) under any Credit Agreement Refinancing Debt; provided, further, that, at any time, all Unrestricted Subsidiaries, in the aggregate, do not have total revenues (excluding any intercompany revenue) for the most recent 12-month period for which financial statements are available exceeding 5% of the total revenues for the most recent 12-month period of the Borrower and its Consolidated Subsidiaries for which corresponding financial statements are available. The Borrower may designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes of this Agreement (each, a “Subsidiary Redesignation”); provided, that (1) no Default has occurred and is continuing or would result therefrom, (2) on a Pro Forma Basis after giving effect to each such designation, the Borrower shall be in compliance with the covenants set forth in Section 5.04 as of the last day of the most recently ended fiscal quarter, and (3) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by the President or a Vice President of the Borrower certifying compliance with the requirements of preceding clauses (1) and (2).

“Unused Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time and (B) without duplication of preceding clause (i) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such time.

“VAM” means Vamos a Mexico, S.A. de C.V., a corporation with variable capital (sociedad anonima de capital variable) organized under the laws of Mexico.

“Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The word “will” shall be construed to have the

 

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same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (ii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iii) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (iv) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document).

SECTION 1.03. Accounting Terms. (a) All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(g) (“GAAP”); provided that, notwithstanding any of the foregoing, if any change in GAAP would (x) recharacterize an operating lease as a capital lease or treat a new lease that except for such change would have been characterized as an operating lease, as a capital lease, such change shall be disregarded or (y) require lease obligations to be included on the balance sheet of the Borrower or any of its Consolidated Subsidiaries, such obligations shall not constitute Debt hereunder unless same are Capitalized Lease Obligations (subject to preceding clause (x)).

(b) If after the Effective Date any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders a statement of reconciliation conforming the financial statements delivered pursuant to Section 5.03(b) or (c) to GAAP used in the preparation of the financial statements described in Section 4.01(g).

SECTION 1.04. Currency Equivalents Generally.

(a) Any amount specified in this Agreement (other than in Articles II, VII and IX) or any of the other Loan Documents to be in U.S. dollars shall also include the equivalent of such amount in any currency other than U.S. dollars, such equivalent amount to be determined at the rate of exchange quoted by the Administrative Agent in New York, New York at the close of business on the Business Day immediately preceding any date of determination thereof, to prime banks in New York, New York for the spot purchase in the New York foreign exchange market of such amount in U.S. dollars with such other currency.

(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with Section 5.02 with respect to the amount of any Lien, Debt, disposition, Restricted Payment or Affiliate transaction (a “subject transaction”) in a currency other than U.S. dollars, (i) the U.S. dollar-equivalent amount of a subject transaction in a currency other than U.S. dollars shall be

 

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calculated based on the relevant currency exchange rate in effect on the date of such subject transaction and, in the case of the incurrence of Debt, on the date incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease (collectively, a “refinancing”) other Debt denominated in a currency other than U.S. dollars, and such extension, refunding, replacement, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of unpaid and accrued interest, premium (including tender and call premiums) thereon, defeasance costs and fees and expenses incurred (including original issue discount, upfront fees and similar interest), in connection with such extension, replacement, refunding, refinancing, renewal or defeasance and (ii) for the avoidance of doubt, it is agreed no Default shall be deemed to have occurred solely as a result of changes in rates of currency exchange occurring after the time of such subject transaction (so long as such subject transaction, at the time incurred, made, acquired, committed or entered into (or declared in the case of a Restricted Payment) was permitted hereunder).

(c) For purposes of determining the Leverage Ratio and the Interest Coverage Ratio, amounts denominated in a currency other than U.S. dollars will be converted to U.S. dollars at the currency exchange rates used in preparing the Borrower’s financial statements corresponding to the Measurement Period with respect to the applicable date of determination and will, in the case of Debt, reflect the currency translation effects, determined in accordance with GAAP, of Hedge Agreements permitted hereunder for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. dollar equivalent of such Debt.

SECTION 1.05. Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any L/C Related Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

SECTION 2.01. The Advances and the Letters of Credit.

(a) The Revolving Credit Advances. Each Revolving Credit Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances in U.S. dollars (each a “Revolving Credit Advance”) to the Borrower from time to time on any Business Day during the period from (and including) the Effective Date until the Termination Date in respect of the Revolving Credit Facility in an amount for each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time. Within the limits of each Revolving Credit Lender’s Unused Revolving Credit Commitment in effect from time to time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).

 

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(b) [Reserved].

(c) The Letters of Credit.

(i) Each Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit in U.S. dollars for the account of the Borrower from time to time on any Business Day during the period from the Effective Date until five Business Days before the Termination Date in respect of the Revolving Credit Facility in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time the lesser of (x) the Letter of Credit Facility at such time and (y) the Issuing Bank’s Letter of Credit Commitment at such time and (ii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time. If the Borrower so requests in any applicable Letter of Credit Application, an Issuing Bank may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit such Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable Issuing Bank, the Borrower shall not be required to make a specific request to such Issuing Bank for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) such Issuing Bank to permit the extension of such Letter of Credit at any time to an expiry date no later than the earlier of five Business Days before the Termination Date in respect of the Revolving Credit Facility and one year after the date of issuance thereof; provided, however, that an Issuing Bank shall not permit any such extension if (A) such Issuing Bank has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 3.02 is not then satisfied, and in each such case directing such Issuing Bank not to permit such extension. Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.03(d)(iii) and request the issuance of additional Letters of Credit under this Section 2.01(c).

(ii) Each Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing the Letter of Credit, or any law applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such Issuing Bank with respect to the Letter of Credit any restriction, reserve or

 

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capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such Issuing Bank in good faith deems material to it; or

(B) the issuance of the Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally.

SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section 2.03, each Borrowing, each conversion of Advances from one Type to the other and each continuation of Eurodollar Rate Advances shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by (A) telephone, or (B) a Committed Loan Notice; provided that any telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a Committed Loan Notice. Each such Committed Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Advances or of any conversion of Eurodollar Rate Advances to Base Rate Advances and (ii) on the requested date of any Borrowing of Base Rate Advances; provided, however, that if the Borrower wishes to request Eurodollar Rate Advances having an Interest Period other than one week, one month, two months, three months or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. If the Borrower makes a request pursuant to the proviso to the immediately preceding sentence, not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each Borrowing of, conversion to or continuation of Eurodollar Rate Advances shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Section 2.03(d), each Borrowing of or conversion to Base Rate Advances shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Notice of Borrowing, each notice of conversion of Advances from one Type to the other, and each notice of continuation of Eurodollar Rate Advances shall specify, as applicable, (i) whether the Borrower is requesting a Borrowing, a conversion of Advances from one Type to the other, or a continuation of Eurodollar Rate Advances, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Borrowing to be borrowed, converted or continued, (iv) the Type of Borrowing to be borrowed or to which existing Advances are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Advance in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Advance shall be made as, or converted to, Base Rate Advances. Any such automatic conversion to Base Rate Advance shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Advance. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Advance in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b) [Reserved].

(c) Each Committed Loan Notice shall be irrevocable and binding on the Borrower; provided that any such notice in respect of any acquisition not prohibited under this Agreement, or in connection with any Borrowing or Extension, as applicable, under an Incremental Amendment, Refinancing Amendment, or an Extension Offer, may be conditioned on the consummation of such

 

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acquisition or the effectiveness of any such Incremental Amendment, Refinancing Amendment, or Extension, as applicable). In the case of any Borrowing that the related Committed Loan Notice specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall, upon demand from any Appropriate Lender setting forth in reasonable detail the basis for such demand, indemnify each Appropriate Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Committed Loan Notice for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or redeployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(d) Unless the Administrative Agent shall have received notice from an Appropriate Lender prior to the time of any Borrowing under a Facility under which such Lender has a Commitment that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.01(a) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07(a) to Advances comprising such Borrowing and (ii) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

(e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the third Business Day (or such fewer days as the applicable Issuing Bank and the Borrower shall agree) prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to the applicable Issuing Bank, which shall give to the Administrative Agent and each Revolving Credit Lender prompt notice thereof by telecopier or electronic communication. Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be by telephone, confirmed promptly in writing, telecopier, or other form of electronic communication, specifying therein the requested (A) date of such issuance (which shall be a Business Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and shall be accompanied by a Letter of Credit Application for use in connection with such requested Letter of Credit. If (x) the requested form of such Letter of Credit is acceptable to the Issuing Bank in its sole discretion and (y) it has not received notice from any Loan Party, the Administrative Agent or the Required Lenders that one or more of the applicable conditions specified in Article III have not been fulfilled, the applicable Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to the Borrower at its office referred to in Section 9.02 or as otherwise agreed with the Borrower in connection with such issuance.

 

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(b) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to the Administrative Agent on the first Business Day of each week a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the previous week and drawings during such week under all Letters of Credit by such Issuing Bank, (B) to each Revolving Credit Lender on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit by such Issuing Bank issued during the preceding month and drawings during such month under all Letters of Credit by such Issuing Bank and (C) to the Administrative Agent and each Revolving Credit Lender on the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit by such Issuing Bank.

(c) [Reserved].

(d) Drawing and Reimbursement.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Bank shall notify the Borrower and the Administrative Agent thereof. If the Borrower is notified of such drawing prior to 11:00 a.m. on such date, then not later than 1:00 p.m. on the date of any payment by such Issuing Bank under a Letter of Credit (or 1:00 p.m. on the next succeeding Business Day, if the Borrower is not notified of such drawing prior to 11:00 a.m. on such day) (each such date, an “Honor Date”), the Borrower shall reimburse such Issuing Bank through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse such Issuing Bank by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing of the L/C Disbursement (the “Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share of the Available Amount thereof. In such event, the Borrower shall be deemed to have requested a Base Rate Advance to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02(a) for the principal amount of Base Rate Advances, but subject to the amount of the unutilized portion of the aggregate Commitments and the conditions set forth in Section 3.02 (other than the delivery of a Committed Loan Notice). Any notice given by an Issuing Bank or the Administrative Agent pursuant to this Section 2.03(d)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(d)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the applicable Issuing Bank at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(d)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Advance to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Issuing Bank.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate Advance because the conditions set forth in Section 3.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from an Issuing Bank a Letter of Credit Advance in the amount of the Unreimbursed Amount that is not so refinanced, which Letter of Credit Advance shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum then applicable to Revolving Credit Advances that are Base Rate Advances (provided that if the Borrower fails to reimburse such Letter of Credit Advance when

 

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due pursuant to this clause (iii), then Section 2.07(b) shall apply). In such event, each Lender’s payment to the Administrative Agent for the account of the Issuing Bank pursuant to Section 2.03(d)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Advance and shall constitute an Letter of Credit Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Lender funds its Letter of Credit Advance or Base Rate Advance pursuant to this Section 2.03(d) to reimburse an Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of the applicable Issuing Bank.

(v) Each Lender’s obligation to make Letter of Credit Advances or Base Rate Advances to reimburse an Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(d), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against an Issuing Bank, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Base Rate Advances pursuant to this Section 2.03(d) is subject to the conditions set forth in Section 3.02 (other than delivery by the Borrower of a Committed Loan Notice, Notice of Issuance or a notice of renewal of a Letter of Credit). No such making of a Letter of Credit Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse an Issuing Bank for the amount of any payment made by an Issuing Bank under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the account of an Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(d) by the time specified in Section 2.03(d)(ii), then, without limiting the other provisions of this Agreement, such Issuing Bank shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Issuing Bank at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by such Issuing Bank in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such Issuing Bank in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Advance included in the relevant Base Rate Advance or Letter of Credit Advance in respect of the relevant Letter of Credit Advance, as the case may be. A certificate of an Issuing Bank submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error. The failure of any Lender to make available to the Administrative Agent for the account of an Issuing Bank any amount required to be paid by such Lender on the date specified in this Section 2.03(d) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance or Base Rate Advance, as applicable, on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance or Base Rate Advance, as applicable, to be made by such other Lender on such date.

(e) Obligations Absolute. The obligation of the Borrower to reimburse any Issuing Bank for each drawing under each Letter of Credit and to repay each Letter of Credit Advance shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

 

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(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) waiver by an Issuing Bank of any requirement that exists for such Issuing Bank’s protection and not the protection of the Borrower or any waiver by such Issuing Bank which does not in fact materially prejudice the Borrower;

(v) honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

(vi) any payment made by an Issuing Bank in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

(vii) any payment by an Issuing Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by an Issuing Bank under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Bankruptcy Law; or

(viii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the relevant Issuing Bank. The Borrower shall be conclusively deemed to have waived any such claim against such Issuing Bank and its correspondents unless such notice is given as aforesaid.

(f) Conflict with L/C Related Documents. In the event of any conflict between the terms hereof and the terms of any L/C Related Document, the terms hereof shall control.

SECTION 2.04. Repayment of Advances. The Borrower shall repay to the Administrative Agent for the ratable account of the Revolving Credit Lenders on the Termination Date in respect of the Revolving Credit Facility the aggregate principal amount of the Revolving Credit Advances then outstanding.

 

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SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional. The Borrower may, upon at least three Business Days’ notice to the Administrative Agent, terminate in whole or reduce in part the Unused Revolving Credit Commitments; provided, however, that each partial reduction of the Revolving Credit Facility (i) shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) shall be made ratably among the Appropriate Lenders in accordance with their respective Pro Rata Shares with respect to such Facility.

(b) Mandatory. The Letter of Credit Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Advances in whole or in part without premium or penalty; provided that (i) such notice must be in a form reasonably acceptable to the Administrative Agent (it being acknowledged and agreed that a notice addressed to the Administrative Agent in accordance with Section 9.02 and containing the information required by the immediately following sentence shall be acceptable to the Administrative Agent) and received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Advances and (B) on the date of prepayment of Base Rate Advances; (ii) any prepayment of Eurodollar Rate Advances shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Advances shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Advances to be prepaid and, if Eurodollar Rate Advances are to be prepaid, the Interest Period(s) of such Advances. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Pro Rata Share in respect of the Revolving Credit Facility on such date of such prepayment). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided that the Borrower may rescind, or extend the date for prepayment specified in, any notice of prepayment under this Section 2.06(a), if such prepayment would have resulted from a refinancing of all or any portion of any Facility, which refinancing shall not be consummated or shall otherwise be delayed. Any prepayment of a Eurodollar Rate Advances shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts then due and payable pursuant to Section 9.04(c). Subject to Section 2.15, each such prepayment shall be applied to the Advances of the Lender Parties in accordance with the amount ratably based upon the respective aggregate amounts thereof owing to the Lender Parties on such date of such prepayment.

(b) Mandatory. (i) The Borrower shall, on each Business Day, prepay, in the manner set forth in clause (iii) below, an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings and the Letter of Credit Advances and deposit an amount in the L/C Collateral Account in an amount equal to the amount by which (A) the sum of the aggregate principal amount of (x) the Revolving Credit Advances and (y) the Letter of Credit Advances then outstanding plus the aggregate Available Amount of all Letters of Credit then outstanding exceeds (B) the Revolving Credit Facility on such Business Day.

(ii) The Borrower shall, on each Business Day, pay to the Administrative Agent for deposit in the L/C Collateral Account an amount sufficient to cause the aggregate amount on deposit in the L/C Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

 

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(iii) Prepayments of the Revolving Credit Facility made pursuant to clause (i) above shall be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full and third deposited in the L/C Collateral Account to Cash Collateralize the Letters of Credit then outstanding; and the amount remaining (if any) after the prepayment in full of the Advances then outstanding and the Cash Collateralization of the Letters of Credit then outstanding may be retained by the Borrower. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Collateral Account, such funds shall be applied to reimburse the applicable Issuing Bank or Revolving Credit Lenders, as applicable.

(iv) All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid, together with any amounts then due and payable pursuant to Section 9.04(c).

SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i) Base Rate Advances. During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances. During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect from time to time payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b) Default Interest. Upon the occurrence and during the continuance of an Event of Default under Section 6.01(a), the Administrative Agent may, and upon the request of the Required Lenders shall, require that the Borrower pay interest (“Default Interest”) on (i) the unpaid overdue principal amount of each Advance owing to each Lender Party, payable in arrears on the dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and (ii) to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount payable under this Agreement or any other Loan Document to the Administrative Agent or any Lender Party that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of Advance on which such interest has accrued pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and, in all other cases, on Base Rate Advances pursuant to clause (i) of Section 2.07(a); provided, however, that following the acceleration of the Advances, or the giving of notice by the Administrative Agent to accelerate the Advances, pursuant to Section 6.01, Default Interest shall accrue and be payable hereunder whether or not previously required by the Administrative Agent.

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of a Committed Loan Notice pursuant to Section 2.02(a) or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period”, the Administrative Agent shall give notice to the Borrower and each Appropriate Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

 

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SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of the Revolving Credit Lenders a commitment fee (the “Commitment Fee”), from the Effective Date in the case of each Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in arrears quarterly on the last day of each March, June, September and December, commencing March 31, 2016, and on the Termination Date, equal to the Applicable Commitment Fee Rate times the actual daily Unused Revolving Credit Commitment of such Lender; provided, however, that any Commitment Fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Borrower prior to such time; and provided further that no Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender a commission, payable in arrears quarterly on the last day of each March, June, September and December, commencing March 31, 2016, and on the earliest to occur of the full drawing, expiration, termination or cancellation of any Letter of Credit and on the Termination Date in respect of the Letter of Credit Facility, on such Lender’s Pro Rata Share of the actual daily aggregate Available Amount during such quarter of all Letters of Credit outstanding from time to time at the Applicable Margin for Eurodollar Rate Advances under the Revolving Credit Facility. Upon the occurrence and during the continuance of an Event of Default under Section 6.01(a) or 6.01(f), the amount of commission payable by the Borrower under this clause (b)(i) shall be increased by 2% per annum on any overdue amounts; provided that additional commission payable pursuant to this sentence shall be without duplication of amounts payable pursuant to clause (ii) of Section 2.07(b). For purposes of computing the actual daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.05.

(ii) The Borrower shall pay to each Issuing Bank, for its own account, (A) a fronting fee equal to 0.125% per annum of the stated amount of each Letter of Credit issued by it, payable upon the issuance thereof, and, if applicable, payable quarterly in arrears thereafter and (B) such other commissions, issuance fees, transfer fees and other fees and charges in connection with the issuance or administration of each Letter of Credit as the Borrower and such Issuing Bank shall agree.

(c) Administrative Agent’s Fees. The Borrower shall pay to the Administrative Agent for its own account such fees as may from time to time be agreed between the Borrower and such Agent.

(d) Lead Arrangers’ Fees. The Borrower shall pay to each Lead Arranger, for its own account, the fees in the amounts and on the dates from time to time agreed to in writing by the Borrower and the Lead Arrangers.

SECTION 2.09. Conversion of Advances. Upon the occurrence and during the continuance of any Default, (x) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

 

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SECTION 2.10. Increased Costs, Etc.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 2.10(e)) or any Issuing Bank;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Advances made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Advance (or of maintaining its obligation to make any such Advance), or to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such Issuing Bank, the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or any Issuing Bank determines that any Change in Law affecting such Lender or such Issuing Bank or any Applicable Lending Office of such Lender or such Lender’s or such Issuing Bank’s holding company, if any, regarding capital or liquidity requirements (other than the circumstances referred to in clause (e) below) has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Advances made by, or participations in Letters of Credit such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

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(d) Delay in Requests. Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to the foregoing provisions of this Section 2.10 shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance equal to the actual costs of such reserves allocated to such Advance by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Advance, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant interest payment date, such additional interest shall be due and payable 10 days from receipt of such notice.

SECTION 2.11. Payments and Computations. (a) The Borrower shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.15), not later than 1:00 P.M. (New York City time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) [Reserved].

(c) All computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period

 

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for which such interest, fees or commissions are payable. Each determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

(d) Subject to Section 2.04(a), whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment or letter of credit fee or commission, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to any Lender Party hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount then due such Lender Party. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each such Lender Party severally agrees to repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f) Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents, is insufficient to pay in full all amounts due and payable to the Agents and the Lender Parties under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Agents and the Lender Parties in the following order of priority:

(i) first, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Administrative Agent (solely in its capacity as such) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Administrative Agent on such date;

(ii) second, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Issuing Banks (solely in their respective capacities as such) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Issuing Banks on such date;

(iii) third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the Lenders under Section 9.04 hereof and any similar section of any of the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the Lenders on such date;

(iv) fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties under Sections 2.10 and 2.12 hereof on such date, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date;

 

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(v) fifth, to the payment of all of the fees that are due and payable to the Lenders under Section 2.08(a) on such date, ratably based upon the respective aggregate Commitments of the Lenders under the Facilities on such date;

(vi) sixth, to the payment of all of the accrued and unpaid interest on the Obligations of the Borrower under or in respect of the Loan Documents that is due and payable to the Administrative Agent and the Lender Parties under Section 2.07(b) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Administrative Agent and the Lender Parties on such date;

(vii) seventh, to the payment of all of the accrued and unpaid interest on the Advances that is due and payable to the Administrative Agent and the Lender Parties under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Administrative Agent and the Lender Parties on such date;

(viii) eighth, to the payment of the principal amount of all of the outstanding Advances that is due and payable to the Administrative Agent and the Lender Parties on such date, ratably based upon the respective aggregate amounts of all such principal owing to the Administrative Agent and the Lender Parties on such date; and

(ix) ninth, to the payment of all other Obligations of the Loan Parties owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and the other Lender Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Lender Parties on such date.

If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the Advances or the Facility to which, or the manner in which, such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lender Parties in accordance with such Lender Party’s Pro Rata Share thereof. Notwithstanding the foregoing or anything to the contrary in this Agreement or any other Loan Document, in no circumstances shall any payment received from, or proceeds from any assets of, any Loan Party which is not a Qualified ECP Guarantor be applied towards the payment of any Obligations under a Hedge Agreement constituting a Loan Document.

SECTION 2.12. Taxes. (a) Any and all payments by or on account of any obligation of any Loan Party hereunder or under the Notes or any other Loan Document shall be made free and clear of and without deduction for any Taxes, except as required by applicable law; provided that if any Loan Party shall be required to deduct any Taxes from such payments, then (i) if such Tax is an Indemnified Tax or Other Tax, the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, a Loan Party shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

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(c) Each Loan Party shall indemnify each Recipient, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes payable or paid by the Recipient, as the case may be, on or with respect to any payment by or on account of any obligation of such Loan Party hereunder or under the Notes or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to a Loan Party by a Lender Party or the Administrative Agent on its own behalf or on behalf of a Lender Party, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.12(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender Party shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender Party becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender Party claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest

 

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under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender Party claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender Party is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

(4) to the extent a Foreign Lender Party is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender Party is a partnership and one or more direct or indirect partners of such Foreign Lender Party are claiming the portfolio interest exemption, such Foreign Lender Party may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender Party shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender Party becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

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(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 2.12(e) expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(f) If the Administrative Agent or a Lender Party determines, in its sole discretion, that it has finally and irrevocably received a refund or credit of any Taxes as to which it has been indemnified pursuant to this Section 2.12 (including by the payment of additional amounts pursuant to this Section 2.12), it shall pay to the applicable Loan Party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes imposed on such refund) of the Administrative Agent or such Lender Party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such Loan Party, upon the request of the Administrative Agent or such Lender Party, shall repay to the Administrative Agent or such Lender Party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that the Administrative Agent or such Lender Party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the Administrative Agent or such Lender Party be required to pay any amount to a Loan Party pursuant to this paragraph (f) the payment of which would place the Administrative Agent or any Lender Party in a less favorable net after-Tax position than the Administrative Agent or such Lender Party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require the Administrative Agent or any Lender Party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to any Loan Party or any other Person.

SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise (a) on account of Obligations due and payable to such Lender Party hereunder and under the Notes and the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party hereunder and under the Notes and the other Loan Documents at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the Notes and the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time obtained by all the Lender Parties at such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party hereunder and under the Notes and the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party hereunder and under the Notes and the other Loan Documents at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes and the other Loan Documents at such time) of payments on account of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the

 

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purchasing Lender Party in respect of the total amount so recovered; provided further that, (A) so long as the Obligations under the Loan Documents shall not have been accelerated, any excess payment received by any Appropriate Lender shall be shared on a pro rata basis only with other Appropriate Lenders and (B) the provisions of this Section shall not be construed to apply to (i) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (ii) the application of Cash Collateral, or (iii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Advances or subparticipations in L/C Obligations to any assignee or participant, other than an assignment to any Loan Party or any Subsidiary thereof. The Borrower agrees that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of the Borrower in the amount of such interest or participating interest, as the case may be. Notwithstanding anything to the contrary contained in this Section 2.13 or elsewhere in this Agreement, the Borrower may extend the final maturity of Advances and/or Revolving Credit Commitments in connection with an Extension that is permitted under Section 2.20 without being obligated to effect such extensions on a pro rata basis among the Lenders (it being understood that no such extension shall constitute a payment or prepayment of any Advances, for purposes of this Section 2.13) without giving rise to any violation of this Section 2.13 or any other provision of this Agreement. Furthermore, the Borrower may take all actions contemplated by Section 2.20 in connection with any Extension (including modifying pricing and repayments or prepayments), and in each case such actions shall be permitted, and the differing payments contemplated therein shall be permitted without giving rise to any violation of this Section 2.13 or any other provision of this Agreement.

SECTION 2.14. Use of Proceeds. The proceeds of the Advances and issuances of Letters of Credit are made available (and the Borrower shall use such proceeds and Letters of Credit) (i) to consummate the Refinancing (including the repayment of the advances and other amounts outstanding under the Existing Credit Agreements) and the Notes Exchange, (ii) to pay related transaction fees and expenses and (iii) to provide working capital for the Borrower and its Subsidiaries for general corporate purposes (including acquisitions and repurchases of the Borrower’s Equity Interests).

SECTION 2.15. Defaulting Lenders. (a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent hereunder for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 6.02 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.05 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank hereunder; third, to Cash Collateralize the Issuing Banks’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15(d); fourth, as the Borrower may request (so long as no Default exists), to the funding of any Advance in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a

 

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deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Advances under this Agreement and (y) Cash Collateralize the Issuing Banks’ future Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15(d); sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Advances or Unreimbursed Amounts in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Advances were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 3.02 were satisfied or waived, such payment shall be applied solely to pay the Advances of, and Unreimbursed Amounts owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Advances of, or Unreimbursed Amounts owed to, such Defaulting Lender until such time as all Advances and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.15(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees.

(A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B) Each Defaulting Lender shall be entitled to receive fees pursuant to Section 2.08(b)(i) for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Pro Rata Share of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.15(d).

(C) With respect to any Commitment Fee or fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuing Bank, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any

 

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claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Banks’ Fronting Exposure in accordance with the procedures set forth in Section 2.15(d).

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, each Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Advances of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Advances and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.15(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) New Letters of Credit. So long as any Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

(d) Cash Collateral. (i) At any time that there shall exist a Defaulting Lender, within three Business Days following the written request of the Administrative Agent or any Issuing Bank (with a copy to the Administrative Agent) the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Banks’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.15(a)(iv) and any Cash Collateral provided by such Defaulting Lender).

(ii) The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Banks, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (iii) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any prior or pari passu right or claim of any Person other than the Administrative Agent and the Issuing Banks as herein provided (other than any Permitted Lien), or that the total amount of such Cash Collateral is less than 103% of the Issuing Banks’ Fronting Exposure, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(iii) Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.15(d) in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(iv) Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.15(d) and shall be promptly released following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the good faith determination by the Administrative Agent and the Issuing Banks that there exists excess Cash Collateral; provided that, subject to this Section 2.15(d), the Person providing Cash Collateral and the Issuing Banks may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

 

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SECTION 2.16. Evidence of Debt. (a) The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to the Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a Note, in substantially the form of Exhibit A hereto, respectively, payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment of such Lender Party.

(b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d) shall include a control account, and a subsidiary account for each Lender Party, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender Party hereunder, and (iv) the amount of any sum received by the Administrative Agent from the Borrower hereunder and each Lender Party’s share thereof.

(c) Entries made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error; provided, however, that the failure of the Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement.

SECTION 2.17. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 2.12, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

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(b) If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12, or if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.07), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.10 or 2.12) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender (other than a Defaulting Lender), if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Credit Commitment is being assigned, the Issuing Banks), which consent shall not unreasonably be withheld or delayed, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Advances accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Section 2.12, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.18. Incremental Advances.

(a) The Borrower may at any time or from time to time after the Effective Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request that additional Revolving Credit Commitments (the “Incremental Revolving Credit Commitments”) be made available to the Borrower, provided that, immediately prior to, and after giving effect to the incurrence of such Incremental Revolving Credit Commitments, the Borrower shall be in compliance with the covenants set forth in Section 5.04 as of the last day of the most recently ended fiscal quarter, on a Pro Forma Basis after giving effect to any such Incremental Revolving Credit Commitments (and, without duplication, assuming that any Incremental Revolving Credit Commitments have been fully utilized). Each Incremental Revolving Credit Commitment shall be in an aggregate principal amount that is not less than $25,000,000 (provided that such amount may be less than $25,000,000 if such amount represents all remaining availability under the limit set forth in the next sentence). Notwithstanding anything to the contrary herein, the aggregate principal amount of the Incremental Revolving Credit Commitments shall not exceed $200,000,000. The Incremental Revolving Credit Commitments shall form part of a single Class of Commitments, and shall be subject to identical terms and conditions as those applicable to, the Revolving Credit Commitments for all purposes of this Agreement and each other Loan Document.

(b) Each notice from the Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Incremental Revolving Credit Commitments, as applicable. Incremental Revolving Credit Commitments may be made or provided by any existing Lender (and each existing Revolving Credit Lender will have the right, but not an obligation, to provide all or a portion of the Incremental Revolving Credit Commitments, in each case on terms permitted in this Section 2.18) or any other Eligible Assignee. Commitments in respect of Incremental Revolving Credit Commitments shall become Revolving Credit Commitments under this Agreement pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by each Loan Party, each Lender and such other Eligible Assignee agreeing to provide such Revolving Credit Commitment, the Administrative Agent and the Issuing Banks. An Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion

 

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of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.18. The effectiveness of (and any borrowing under) any Incremental Amendment shall be subject to the satisfaction on the date thereof (each, an “Incremental Facility Effective Date”) of each of the conditions set forth in Section 3.02 (it being understood that all references to “the date of such Borrowing” or similar language in such Section 3.02 shall be deemed to refer to the effective date of such Incremental Amendment) and such other conditions as the parties thereto shall agree. Upon the effectiveness of any increase in the Revolving Credit Commitments pursuant to this Section 2.18, (A) the Pro Rata Share of each Revolving Credit Lender shall be automatically adjusted to give effect to such increase, provided that the amount of each Revolving Credit Lender’s Revolving Credit Commitments (other than a Revolving Credit Lender whose Revolving Credit Commitments shall have been increased in connection with such increase) shall remain unchanged and (B) the Borrower, the Administrative Agent and the Lenders will use all commercially reasonable efforts to assign and assume outstanding Revolving Credit Advances of the affected category to conform the respective amounts thereof held by each Revolving Credit Lender to the Pro Rata Shares as so adjusted, it being understood that the parties hereto shall use commercially reasonable efforts to avoid prepayment or assignment of any affected Revolving Credit Advance that is a Eurodollar Rate Advance on a day other than the last day of the Interest Period applicable thereto. The Borrower will use the proceeds of the Incremental Revolving Credit Commitments for any purpose not prohibited by this Agreement.

(c) This Section 2.18 shall supersede any provisions in Section 2.06, 2.13 or 9.01 to the contrary.

SECTION 2.19. Refinancing Amendments. At any time after the Effective Date, the Borrower may obtain, from any Lender or any other Eligible Assignee, Credit Agreement Refinancing Debt in the form of Other Advances or Other Commitments in each case pursuant to a Refinancing Amendment. Any Other Advances may participate on a pro rata basis or on a less than pro rata basis (but not on a greater than pro rata basis) in any voluntary or mandatory prepayments hereunder, as specified in the applicable Refinancing Amendment. The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 3.02, together with customary legal opinions, board resolutions, officers’ certificates and/or reaffirmation agreements generally consistent with those delivered on the Effective Date under Section 3.02. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment. Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Credit Agreement Refinancing Debt incurred pursuant thereto (including any amendments necessary to treat the Advances and Commitments subject thereto as Other Advances and/or Other Commitments). Any Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.19. This Section 2.19 shall supersede any provisions in Section 2.06, 2.13 or 9.01 to the contrary.

SECTION 2.20. Extensions of Advances and Commitments.

(a) Notwithstanding anything to the contrary in this Agreement, subject to the terms of this Section 2.20, the Borrower may from time to time extend the maturity date, and otherwise modify the terms of any Class, or any portion thereof (including, without limitation, by increasing the interest rate or fees payable in respect of any Advances and/or Commitments applicable to such Class, or any portion thereof (and related outstandings) of any such Class) (each, an “Extension”) pursuant to one or more written offers (each, an “Extension Offer”) made from time to time by the Borrower to all Lenders under any Class that is proposed to be extended under this Section 2.20, in each case on a pro rata basis (based

 

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on the aggregate outstanding principal amount of the respective outstanding Advances and unfunded Commitments of such Class) and on the same terms to each such Lender. In connection with each Extension, the Borrower will provide notification to the Administrative Agent (for distribution to the Lenders of the applicable Class), no later than thirty (30) days prior to the Termination Date of the applicable Class or Classes to be extended of the requested new Termination Date for such Extension and the due date for Lender responses. In connection with any Extension, each Lender of the applicable Class wishing to participate in such Extension shall, prior to such due date, provide the Administrative Agent with a written notice thereof in a form reasonably satisfactory to the Administrative Agent. Any Lender that does not respond to an Extension Offer by the applicable due date shall be deemed to have rejected such Extension. After giving effect to any Extension, the Revolving Credit Commitments and Extended Revolving Credit Commitments, so extended shall cease to be a part of the Class they were a part of immediately prior to the Extension and shall be a new Class hereunder.

(b) Each Extension shall be subject to the following:

(i) no Default shall have occurred and be continuing at the time any offering document in respect of an Extension Offer is delivered to the Lenders;

(ii) except as to utilization fees, unused fees and final maturity, the Revolving Credit Commitment of any Revolving Credit Lender extended pursuant to an Extension (an “Extended Revolving Credit Commitment”, which term shall include, without limitation, any Extended Revolving Credit Commitment (or portion thereof) that is further extended pursuant to an Extension under this Section 2.20), and the related outstandings, shall be a Revolving Credit Commitment (or related outstandings, as the case may be) with the same terms as the original Revolving Credit Commitments and any prior Extended Revolving Credit Commitments (and related outstandings); provided that (A) subject to the provisions of the definition of “Issuing Bank” to the extent dealing with Letters of Credit which mature or expire after an applicable Termination Date when there exist Extended Revolving Credit Commitments with a longer applicable Termination Date, all Letters of Credit shall be participated in on a pro rata basis by all Lenders with Revolving Credit Commitments and/or Extended Revolving Credit Commitments in accordance with their Pro Rata Shares and all borrowings under Revolving Credit Commitments and repayments thereunder shall be made on a pro rata basis (except for (x) payments of interest and fees at different rates on Extended Revolving Credit Commitments (and related outstandings) and (y) repayments required upon any applicable Termination Date of any Class of Revolving Credit Commitments or Extended Revolving Credit Commitments) and (B) at no time shall there more than two (2) different Classes of Revolving Credit Commitments;

(iii) if the aggregate principal amount of Revolving Credit Commitments or Extended Revolving Credit Commitments, as the case may be, in respect of which Revolving Credit Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Revolving Credit Commitments or Extended Revolving Credit Commitments, as the case may be, offered to be extended by the Borrower pursuant to such Extension Offer, then the Revolving Credit Commitments or Extended Revolving Credit Commitments, as the case may be, of such Revolving Credit Lenders shall be extended ratably (based upon the respective Class) up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Revolving Credit Lenders have accepted such Extension Offer;

(iv) all documentation in respect of such Extension shall be consistent with the foregoing;

(v) any applicable Minimum Extension Condition shall be satisfied; and

(vi) no Extension shall become effective unless, on the proposed effective date of such Extension, the conditions set forth in Section 3.02 shall be satisfied (with all references in such Section to the making of an Advance being deemed to be references to the Extension on the applicable date of such Extension) and the Administrative Agent shall have received a certificate to that effect dated the applicable date of such Extension and executed by an officer of the Borrower.

 

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(c) With respect to all Extensions consummated by the Borrower pursuant to this Section 2.20, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Sections 2.05, 2.06, 2.13 or 9.05, (ii) each Extension Offer may contain a condition (a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s discretion) in the case of any Extension Offer of Revolving Credit Commitments or Extended Revolving Credit Commitments (as applicable) of any or all applicable Classes be tendered and (iii) if the amount extended is less than the Letter of Credit Facility, unless the applicable Issuing Banks agree otherwise as part of such Extension, such Letter of Credit Facility shall be reduced upon the date that is five (5) Business Days prior to the applicable Termination Date of the Class being extended (to the extent needed so that such Letter of Credit Facility does not exceed the aggregate Revolving Credit Commitment which would be in effect after such applicable Termination Date), and, if after giving effect to such Extension the aggregate Available Amount of Letters of Credit exceeds the Letter of Credit Facility, the Borrower shall Cash Collateralize any issued Letters of Credit to the extent of such excess. The Administrative Agent and the Lenders hereby consent to the Extensions and the other transactions contemplated by this Section 2.20 (including, for the avoidance of doubt, payment of any interest or fees in respect of any Extended Revolving Credit Commitments on the terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including, without limitation, Sections 2.06 or 2.08) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 2.20.

(d) The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order establish new Classes or sub-Classes in respect of Revolving Credit Commitments or Extended Revolving Credit Commitments so extended and such technical amendments as may be necessary in connection with the establishment of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.20. Notwithstanding the foregoing, the Administrative Agent shall have the right (but not the obligation) to seek the advice or concurrence of the Required Lenders with respect to any matter contemplated by this Section 2.20 and, if the Administrative Agent seeks such advice or concurrence, the Administrative Agent shall be permitted to enter into such amendments with the Borrower in accordance with any instructions actually received by such Required Lenders and shall also be entitled to refrain from entering into such amendments with the Borrower unless and until it shall have received such advice or concurrence; provided, however, that whether or not there has been a request by the Administrative Agent for any such advice or concurrence, all such amendments entered into with the Borrower by the Administrative Agent hereunder shall be binding and conclusive on the Lenders.

(e) In connection with any Extension, the Borrower shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.20.

 

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ARTICLE III

CONDITIONS TO INITIAL EXTENSION OF CREDIT AND

ISSUANCE OF LETTERS OF CREDIT

SECTION 3.01. Conditions Precedent to Initial Extension of Credit. The obligations of the Lenders to make Advances and of the Issuing Banks to issue Letters of Credit hereunder will become effective on the Effective Date, when each of the following conditions are satisfied (or waived in accordance with Section 9.01):

(a) The Administrative Agent shall have received on or before the Effective Date the following, each dated such day (unless otherwise specified):

(i) Executed counterparts of this Agreement.

(ii) Certified copies of the resolutions of the board of directors (or equivalent governing body) of each Loan Party approving the Transaction and each Loan Document to which it is or is to be a party, and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the Transaction and each Loan Document to which it is or is to be a party.

(iii) A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(iv) A Note executed by the Borrower in favor of each Lender requesting a Note at least three Business Days prior to the Effective Date.

(v) (i) A certificate of the Secretary or Assistant Secretary of each Loan Party, countersigned on behalf of such Loan Party by another officer of such Loan Party, dated the date of the Initial Extension of Credit (the statements made in which certificate shall be true on and as of the date of the Initial Extension of Credit), certifying as to (A) the absence of any amendments to the charter of such Loan Party since the date of the Secretary of State’s certificate referred to in Section 3.01(a)(vi), (B) a true and correct copy of the bylaws of such Loan Party as in effect on the date of the Initial Extension of Credit and (C) the good standing of each Loan Party (to the extent such concept exists in the applicable jurisdiction) (with the applicable good standing certificates attached thereto), and (ii) a certificate of the President or a Vice President of the Borrower, dated the date of the Initial Extension of Credit (the statements made in which certificate shall be true on and as of the date of the Initial Extension of Credit), certifying as to (A) the truth, in all material respects, of the representations and warranties contained in the Loan Documents as though made on and as of the date of the Initial Extension of Credit and (B) the absence of any event occurring and continuing, or resulting from the Initial Extension of Credit, that constitutes a Default.

(vi) A copy of a certificate of the Secretary of State (or other similar official) of the jurisdiction of incorporation of each Loan Party, dated reasonably near the date of the signing of this Agreement, certifying (A) as to a true and correct copy of the charter of such Loan Party and each amendment thereto on file in such Secretary’s office (to the extent the Secretary of State in the applicable jurisdictions typically provides such a

 

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certification) and (B) that (1) such amendments are the only amendments to such Loan Party’s charter on file in such Secretary’s office, (2) such Loan Party has paid all franchise taxes to the date of such certificate (to the extent the Secretary of State in the applicable jurisdictions typically provides such a certification) and (3) such Loan Party is duly incorporated and in good standing (to the extent such concept exists in the applicable jurisdiction) or presently subsisting under the laws of the State of the jurisdiction of its incorporation.

(vii) A certificate, in substantially the form of Exhibit E hereto, attesting to the Solvency of the Loan Parties before and after giving effect to the Transaction, from the chief financial officer or the treasurer of the Borrower.

(viii) Delivery of the financial statements described in Section 4.01(g) and forecasts prepared by management of the Borrower, in form and substance satisfactory to the Lender Parties, of balance sheets, income statements and cash flow statements of the Borrower and its Subsidiaries on a quarterly basis for each fiscal quarter ending during the Fiscal Year ending December 31, 2015 and on an annual basis for each year thereafter until the year ending December 31, 2017.

(ix) A Notice of Borrowing or Notice of Issuance, as applicable, relating to the Initial Extension of Credit.

(x) A favorable opinion of White & Case LLP, counsel for the Loan Parties, in form and substance reasonably satisfactory to the Administrative Agent.

(xi) A favorable opinion of Husch Blackwell LLP, Illinois and Missouri counsel for the Loan Parties, in form and substance reasonably satisfactory to the Administrative Agent.

(b) Since December 31, 2014, there has been no event or condition that has had or could be reasonably expected, either individually or in the aggregate, to have had a Material Adverse Change.

(c) The Borrower shall have paid all accrued and duly invoiced fees of the Agents, the Lead Arrangers and the Lender Parties and all accrued and duly invoiced expenses of the Agents and the Lead Arrangers (including the accrued and duly invoiced fees and expenses of counsel to the Administrative Agent) to the extent payable under any Loan Document or any other agreement between the Borrower and any Agent and/or Lead Arranger.

(d) The Lender Parties shall have received satisfactory evidence of repayment of all Debt, termination of all commitments, the release of all guaranties and the discharge of all liens (if any) (other than Permitted Liens or other Liens permitted pursuant to Section 5.02(a)) under the Existing Credit Agreements.

(e) The Lender Parties shall have received satisfactory evidence that the settlement of the Notes Exchange shall have occurred or will occur on the Effective Date (provided that there shall be no requirement that a minimum amount of KCSR Notes or KCSM Notes have been exchanged in the Notes Exchange).

(f) The Administrative Agent shall have received, at least three days prior to the Effective Date, all documentation and other information required by regulatory authorities under

 

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applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act, that the Administrative Agent has requested reasonably in advance, but not less than ten days prior to the Effective Date.

SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal. The obligation of each Appropriate Lender to make an Advance (other than a Letter of Credit Advance made by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(d)) on the occasion of each Borrowing (including the initial Borrowing), and the obligation of an Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a Letter of Credit, shall be subject to the further conditions precedent that on the date of such Borrowing or issuance or renewal the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and Notice of Issuance and the acceptance by the Borrower of the proceeds of such Borrowing or of such Letter of Credit or the renewal of such Letter of Credit shall constitute a representation and warranty by the Borrower that both on the date of such notice and on the date of such Borrowing or issuance or renewal such statements are true):

(i) the representations and warranties contained in each Loan Document (other than (x) the representation and warranty set forth in Section 4.01(f)(i) and (y) the representation and warranty set forth in Section 4.01(g)(ii)) are correct on and as of such date, before and after giving effect to such Borrowing or issuance or renewal and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations or warranties that, by their terms, refer to a specific date other than the date of such Borrowing or issuance or renewal, in which case as of such specific date; and

(ii) no Default has occurred and is continuing, or would result from such Borrowing or issuance or renewal or from the application of the proceeds therefrom.

SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender Parties unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Initial Extension of Credit specifying its objection thereto and, if the Initial Extension of Credit consists of a Borrowing, such Lender Party shall not have made available to the Administrative Agent such Lender Party’s ratable portion of such Borrowing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows:

(a) Each Loan Party and each of its Restricted Subsidiaries (i) is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) is duly qualified and in good standing as a foreign entity in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed would not be reasonably likely to have a Material Adverse Effect and (iii) has all requisite power and authority (including, without limitation, all Governmental Authorizations) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted, except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect.

 

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(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Subsidiaries of each Loan Party, showing as of the Effective Date (as to each such Subsidiary) the jurisdiction of its incorporation, (in the case of Restricted Subsidiaries) the number of shares of each class of its Equity Interests authorized and the number outstanding, on the Effective Date and the percentage of each such class of its Equity Interests directly owned by such Loan Party on the Effective Date.

(c) The execution, delivery and performance by each Loan Party of each Loan Document to which it is or is to be a party, and the consummation of the Transaction, are within such Loan Party’s powers, have been duly authorized by all necessary corporate or other action, and do not (i) contravene such Loan Party’s organizational documents, (ii) violate any (x) law, rule, regulation (including, without limitation, Regulation X and any provision of the Interstate Commerce Act and the Railway Labor Act), the violation or breach of which could be reasonably likely to have a Material Adverse Effect or (y) order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default or require any payment to be made under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Restricted Subsidiaries or any of their properties, the violation or breach of which could reasonably be expected to have a Material Adverse Effect or (iv) except for the Liens permitted under the Loan Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Restricted Subsidiaries.

(d) No Governmental Authorization, and no notice to or filing with, any Governmental Authority or any other third party is required for (i) the due execution, delivery or performance by any Loan Party of any Loan Document to which it is or is to be a party, or for the consummation of the Transaction or (ii) the exercise by the Administrative Agent or any other Lender Party of its rights under the Loan Documents, except for (A) those that have otherwise been obtained or made on or prior to the Effective Date and which remain in full force and effect on the Effective Date, and (B) the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or made and are in full force and effect.

(e) This Agreement has been, and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto. This Agreement is, and each other Loan Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally from time to time in effect and (ii) equitable principles of general applicability (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(f) There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Restricted Subsidiaries, including any Environmental Action, pending or threatened in writing before any Governmental Authority or arbitrator that (i) could reasonably be expected to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Transaction.

 

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(g) (i) The Consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2014, and the related Consolidated statement of income and Consolidated statement of cash flows of the Borrower and its Consolidated Subsidiaries for the Fiscal Year then ended, accompanied by an unqualified opinion of KPMG LLP, independent public accountants, copies of which have been furnished to each Lender Party, fairly present the Consolidated financial condition of the Borrower and its Consolidated Subsidiaries as at such dates and the Consolidated results of operations of the Borrower and its Consolidated Subsidiaries for the periods ended on such dates, all in accordance with GAAP applied on a consistent basis and (ii) since December 31, 2014, there has been no Material Adverse Change.

(h) [Reserved].

(i) The Consolidated forecasted balance sheet, statement of income and statement of cash flows of the Borrower and its Consolidated Subsidiaries delivered to the Lender Parties pursuant to Section 3.01(a)(viii) or 5.03 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial performance, it being recognized by the Lenders, however, that forecasts are subject to significant uncertainties and contingencies, which may be beyond the Borrower’s and its Subsidiaries’ control and forecasts as to future events are not to be viewed as facts or as a guarantee of performance or achievement of any particular results and that the actual results during the period or periods covered by the forecasts described above may differ from the forecasted results in such forecasts and such differences may be material.

(j) Neither the Lenders Presentation nor any other information, exhibit or report furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender Party in connection with the negotiation and syndication of the Loan Documents or pursuant to the terms of the Loan Documents contained (when furnished and taken as a whole) any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading in any material respect at such time in light of the circumstances under which such information was provided, it being understood and agreed that for purposes of this Section 4.01(i), such information shall not include the forecasts referred to in Section 4.01(i), any pro forma financial information or other forward-looking information regarding the future condition of the industries in which they operate.

(k) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance or drawings under any Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock (it being understood and agreed, for the avoidance of doubt, that the proceeds of Advances may be used by the Borrower to repurchase its Equity Interests pursuant to stock buyback plans from time to time in effect).

(l) Neither any Loan Party nor any of its Restricted Subsidiaries is required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended. Neither the making of any Advances, nor the issuance of any Letters of Credit, nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated by the Loan Documents, will violate any provision of such Act or any rule, regulation or order of the SEC thereunder.

(m) [Reserved].

 

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(n) [Reserved].

(o) [Reserved].

(p) No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. There exists no Unfunded Pension Liability with respect to any Plan, except as would not have a Material Adverse Effect.

(q) Except as otherwise set forth on Schedule 4.01(q) hereto or as disclosed in the Borrower’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2014 or Forms 10-Q or 8-K filed by the Borrower since such date and prior to the Effective Date, in each case with the Securities and Exchange Commission and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any other Restricted Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any claim with respect to any Environmental Liability or (iv) to the best knowledge and belief of the Borrower, knows of any basis for any Environmental Liability.

(r) Each of the Borrower and the Restricted Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

(s) [Reserved].

(t) [Reserved].

(u) The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws, and the Borrower, its Subsidiaries and their respective officers and directors, and to the knowledge of the Borrower its employees and agents, are in compliance with applicable Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respective directors or officers, or (b) to the knowledge of the Borrower, any agent or employee of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other Transaction contemplated by this Agreement will violate any applicable Anti-Corruption Laws or applicable Sanctions.

(v) Each Loan Party maintains insurance with responsible and reputable insurance companies or associations and/or pursuant to self-insurance programs in such amounts and covering such risks as is consistent with that carried by similarly sized companies engaged in similar businesses and owning similar properties in the same general areas in which such Loan Party operates.

 

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(w) Each Loan Party has good and marketable title to, or valid leasehold interest in or rights to use, all its property material to its business, free and clear of all Liens and irregularities, deficiencies and defects in title, except for Permitted Liens and irregularities, deficiencies and defect in title that, individually or in the aggregate, would not result in a Material Adverse Effect.

(x) To the extent applicable, each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the PATRIOT ACT. No part of the proceeds of the Advances will be used, directly or indirectly, for any payment to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(y) Each Loan Party complies in all material respects, with all applicable laws, rules, regulations and orders (including, without limitation, ERISA, Environmental Laws, the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, the Interstate Commerce Act and the Railway Labor Act), except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(z) The Borrower will apply the proceeds of the Advances and the Letters of Credit in accordance with Section 2.14.

(aa) [Reserved].

(bb) The Concession Title is in full force and effect and no proceeding or, to the best knowledge of the Borrower, investigation seeking the termination or revocation of the Concession Title has been initiated by a competent Governmental Authority pursuant to a notice sent to KCSM in circumstances where KCSM has no right to reply or appeal to such Governmental Authority prior to it issuing a final and binding determination having the effect specified in Section 6.01(o) (unless such rights to reply or appeal have been exhausted).

(cc) The Borrower has disclosed in writing to the Administrative Agent any sanctions imposed on KCSM pursuant to final and nonappealable resolutions under Sections II, III, IV, V, VIII or IX of Article 21 of the Railway Service Law (Ley del Servicio Ferroviario).

(dd) KCSM has not been sanctioned pursuant to final and non-appealable resolutions (i) on two different occasions for the same type of violation of Section II or V of Article 21 of the Railway Service Law (Ley del Servicio Ferroviario) or (ii) on four different occasions for the same type of violation of Section III, IV, VIII and IX of Article 21 of the Railway Service Law (Ley del Servicio Ferroviario), in each case as in effect on the Effective Date. For the avoidance of doubt, a sanction under Sections II, III, IV, V, VIII or IX of Article 21 of the Railway Service Law (Ley del Servicio Ferroviario) that does not otherwise violate this subsection shall not by itself constitute an Event of Default by the Borrower.

(ee) No Default or Event of Default presently exists.

 

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ARTICLE V

COVENANTS OF THE BORROWER

SECTION 5.01. Affirmative Covenants. From and after the Effective Date, so long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than contingent Obligations in respect of indemnities for which a claim has not been made), any Letter of Credit shall be outstanding (other than Letters of Credit which have been Cash Collateralized) or any Lender Party shall have any Commitment hereunder, the Borrower will:

(a) Compliance with Laws, Etc. Comply, and cause each of its Restricted Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA, Environmental Laws, the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, the Interstate Commerce Act and the Railway Labor Act, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Restricted Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all Taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property, in each case, except where the failure to make any such payment could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Restricted Subsidiaries shall be required to pay or discharge any such Tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained.

(c) Maintenance of Insurance. Maintain, and cause each of its Restricted Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations and/or pursuant to self-insurance programs in such amounts and covering such risks as is consistent with that carried by similarly sized companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Restricted Subsidiary operates.

(d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause each of its Restricted Subsidiaries to preserve and maintain, its existence, legal structure, rights (charter and statutory), permits, licenses, approvals, privileges and franchises, in each case, except where (other than with respect to the preservation of the existence of the Borrower) the failure to do so could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; provided, however, that the Borrower and its Restricted Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(d) and provided further that neither the Borrower nor any of its Restricted Subsidiaries shall be required to preserve any right, permit, license, approval, privilege or franchise if the board of directors (or equivalent governing body) of the Borrower or such Restricted Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower or such Restricted Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower, such Restricted Subsidiary or the Lender Parties.

 

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(e) Visitation Rights. At any reasonable time and from time to time, upon reasonable notice and at reasonable times during normal business hours, permit any of the Agents, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Restricted Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of its Restricted Subsidiaries with any of their officers or directors; provided that any such examinations shall be at the Lender’s sole risk and expense and the Lenders shall coordinate the timing of their visits through the Administrative Agent; provided further that, in the absence of an Event of Default, the Agents shall not exercise their rights under this Section 5.01(e) more than one time during any Fiscal Year. Any Lender Party may accompany the applicable Agent on any such visitation.

(f) Keeping of Books. Keep, and cause each of its Restricted Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Restricted Subsidiary and which permit the preparation of consolidated financial statements in accordance with GAAP in effect from time to time.

(g) Maintenance of Properties, Etc. (i) Maintain and preserve, and cause each of its Restricted Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition (ordinary wear and tear excepted and subject to the occurrence of casualty and condemnation events), except where the failure to do so could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect and (ii) take all reasonable action to maintain the Concession Title and comply in all material respects with the terms of the Concession Title.

(h) Covenant to Guarantee Obligations. Upon the formation or acquisition of any Significant Subsidiary by any Loan Party or any Domestic Restricted Subsidiary otherwise becoming a Significant Subsidiary:

(i) in connection with the formation or acquisition of a Significant Subsidiary or any Domestic Restricted Subsidiary otherwise becoming a Significant Subsidiary, within 60 days after such event, as such time period may be extended in the Administrative Agent’s reasonable discretion, cause each such Significant Subsidiary to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance satisfactory to the Administrative Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,

(ii) [Reserved],

(iii) within 60 days after such formation or acquisition or any Domestic Restricted Subsidiary otherwise becoming a Significant Subsidiary, as such time period may be extended in the Administrative Agent’s reasonable discretion, deliver to the Administrative Agent, upon the reasonable request of the Administrative Agent, a signed copy of a favorable opinion, addressed to the Administrative Agent and the Lenders, of counsel for the Loan Parties acceptable to the Administrative Agent as to (1) the matters contained in clause (i) above, (2) such guaranties and guaranty supplements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms (subject to customary exceptions under the laws of the applicable jurisdiction) and (3) such other matters as the Administrative Agent may reasonably request,

 

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(iv) [Reserved], and

(v) at any time and from time to time, promptly execute and deliver, and cause to execute and deliver, each Loan Party, each newly acquired or newly formed Significant Subsidiary and each Domestic Restricted Subsidiary otherwise becoming a Significant Subsidiary, any and all further instruments and documents and take, and cause each Loan Party, each newly acquired or newly formed Significant Subsidiary and each Domestic Restricted Subsidiary otherwise becoming a Significant Subsidiary to take, all such other action as the Administrative Agent may deem reasonably necessary or desirable to obtain the full benefits of such guaranties.

(i) [Reserved].

(j) [Reserved].

(k) Use of Proceeds.

(i) Apply the proceeds of the Advances and the Letters of Credit in accordance with Section 2.14; and

(ii) Not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall take reasonable steps to procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto (in each case, subject to the requirements of the Concession Title and applicable Mexican law).

(l) Anti-Corruption Laws. Conduct its businesses in compliance with, as applicable, the United States Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act of 1977 and other similar applicable anti-corruption legislation, including but not limited to, applicable Anti-Corruption Laws, in other jurisdictions.

SECTION 5.02. Negative Covenants. From and after the Effective Date, so long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid (other than contingent Obligations in respect of indemnities for which a claim has not been made), any Letter of Credit shall be outstanding (other than Letters of Credit which have been Cash Collateralized) or any Lender Party shall have any Commitment hereunder, the Borrower will not, at any time:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Restricted Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Restricted Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction or with the Surface Transportation Board, a financing statement or other filing that names the Borrower or any of its Restricted Subsidiaries as debtor (other than any filing made by a lessor of property solely for protective purposes), or sign or suffer to exist, or permit any of its Restricted

 

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Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement or other filing, or assign, or permit any of its Restricted Subsidiaries to assign, any accounts or other right to receive income, except:

(i) [Reserved];

(ii) Permitted Liens;

(iii) [Reserved];

(iv) [Reserved];

(v) [Reserved];

(vi) [Reserved];

(vii) [Reserved];

(viii) Liens securing Debt or other obligations of the Borrower or any of its Restricted Subsidiaries in favor of the Borrower or any of its Restricted Subsidiaries;

(ix) [Reserved];

(x) Liens securing liabilities of the Borrower and its Restricted Subsidiaries in an aggregate amount not to exceed at the time of incurrence thereof (it being understood that the Effective Date is a “time of incurrence” for purposes of this clause (x)), together with (and without duplication of) (A) the aggregate amount of Debt and (without duplication) Attributable Debt, in each case in connection with all Sale and Leaseback Transactions and (B) the aggregate amount of Indebtedness of Subsidiaries that are not Loan Parties incurred pursuant to the final paragraph of Section 5.02(b) (other than Indebtedness incurred pursuant to clause (2) of such paragraph) at such time, 10% of Consolidated Net Assets at such time; and

(xi) Liens on any Equity Interests in Meridian Speedway.

For purposes of determining compliance with this Section 5.02(a), (x) a Lien need not be incurred solely by reference to one category of Liens described in clauses (ii), (viii), (x) or (xi) above (including any of the categories set forth in the definition of Permitted Liens) but may be incurred under any combination of such categories (including in part under one such category and in part under any other such category) and (y) in the event that a Lien (or any portion thereof) meets the criteria of one or more of such categories of Liens described in clauses (ii), (viii), (x) or (xi) above (including any of the categories set forth in the definition of Permitted Liens), the Borrower, in its sole discretion, may classify or may subsequently reclassify at any time such Lien (or any portion thereof) in any manner that complies with this covenant.

(b) Subsidiary Debt. Permit any of its Restricted Subsidiaries (or, solely in the case of the final paragraph of this Section 5.02(b), any of its Subsidiaries) to create, incur, assume or suffer to exist, any Debt, except:

(i) subject to the final paragraph of this Section 5.02(b), in the case of any of the Restricted Subsidiaries,

 

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(A) Debt under the Loan Documents;

(B) [Reserved];

(C) Debt of (i) any Loan Party that is owed to any other Loan Party, (ii) any Restricted Subsidiary of the Borrower that is not a Loan Party owed to any Subsidiary of the Borrower that is not a Loan Party, (iii) any Loan Party owed to any Subsidiary of the Borrower that is not a Loan Party which, to the extent that the aggregate amount for all such Debt exceeds $25,000,000, shall (A) be subordinated in right of payment to the Obligations of such Loan Party under the Loan Documents pursuant to provisions at least as favorable to the Lenders as those set forth in the Affiliate Subordination Agreement (or otherwise on terms reasonably satisfactory to the Administrative Agent) and (B) include, in any event, provisions expressly prohibiting any action to (I) cause any of the obligations with respect to such Debt to become payable prior to the scheduled maturity thereof (except to the extent that all outstanding Advances under this Agreement have been declared due and payable prior to their scheduled maturity dates) and/or (II) exercise any remedies or take any action or proceeding to enforce the payments of such obligations, in each case, prior to the payment in full of the Obligations (other than contingent Obligations in respect of indemnities for which a claim has not been made and Letters of Credit that have been Cash Collateralized) and termination of the Commitments under the Loan Documents and (iv) any Subsidiary of the Borrower that is not a Loan Party owed to any Loan Party;

(D) [Reserved];

(E) [Reserved];

(F) Credit Agreement Refinancing Debt;

(G) any other Debt, provided that (x) if such Debt is secured, such Debt may only be secured by Liens permitted under Section 5.02(a) or (y) if such Debt is not secured and not Debt of a Loan Party, then such Debt shall comply with the final paragraph of this Section 5.02(b);

(H) Debt consisting of guaranties of other Debt permitted under this Section 5.02(b);

(I) [Reserved];

(J) [Reserved];

(K) [Reserved];

(L) [Reserved];

(M) Debt in respect of performance, surety or appeal bonds (in each case not in respect of borrowed money) provided in the ordinary course of business of the Borrower and its Restricted Subsidiaries;

 

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(N) Debt incurred under Hedge Agreements; and

(O) Debt in respect of industrial revenue bonds or other similar governmental or municipal bonds; provided that before and after giving effect to the incurrence of such Debt, the Loan Parties are otherwise in compliance on a Pro Forma Basis with the financial covenants set forth in Section 5.04.

(ii) Subject to the final paragraph of this Section 5.02(b), Debt owed by any Restricted Subsidiary of the Borrower to Meridian Speedway which Debt shall not exceed an aggregate amount equal to $100,000,000 and be subordinated in right of payment to the Obligations of such Person under the Loan Documents pursuant to provisions at least as favorable to the Lenders as those set forth in the Affiliate Subordination Agreement (or otherwise, on terms reasonably satisfactory to the Administrative Agent).

For purposes of determining compliance with this Section 5.02(b), (x) an item of Debt need not be incurred solely by reference to one category of Debt described in clause (i) (including sub-clauses (A), (C), (F), (G), (H), (M), (N) or (O) thereof) or (ii) above or the paragraph immediately below (including sub-clauses (1) through (5) thereof) but may be incurred under any combination of such categories (including in part under one such category and in part under any other such category) and (y) in the event that an item of Debt (or any portion thereof) at any time, whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of Debt described above in clause (i) (including sub-clauses (A), (C), (F), (G), (H), (M), (N) or (O) thereof) or (ii) above or the paragraph immediately below (including sub-clauses (1) through (5) thereof), the Borrower, in its sole discretion, may classify or subsequently reclassify (or later divide, classify or reclassify) such item of Debt (or any portion thereof) in any one or more of the types of Debt described in clause (i) (including sub-clauses (A), (C), (F), (G), (H), (M), (N) or (O) thereof) or (ii) above or the paragraph immediately below (including sub-clauses (1) through (5) thereof) in any manner that complies with this covenant; provided that all Debt outstanding under the Loan Documents shall at all times be deemed to be outstanding in reliance only on the exception in clause (i)(A) above.

Notwithstanding anything to the contrary set forth in this Section 5.02(b), the Borrower shall not permit any Subsidiary that is not a Loan Party to incur any indebtedness for money borrowed or indebtedness evidenced by a bond, note, debenture or other evidence of indebtedness (collectively, “Indebtedness”) pursuant to this Section 5.02(b), except (1) Indebtedness incurred in connection with transactions similar to that described in Note 9 of the Borrower’s 2014 Annual Report on Form 10-K under the heading “Short-Term Borrowing” with a final maturity of not more than 365 days, (2) intercompany Indebtedness owed to the Borrower or any of its Subsidiaries, (3) Indebtedness of any joint venture to which the Borrower or any of its Subsidiaries is a party, (4) any KCSM Notes and any Indebtedness of any Subsidiary of the Borrower that is not a Loan Party and that is secured by any Lien and as set forth on Schedule 5.02 hereto, in each case, outstanding on the Effective Date and (5) Indebtedness not otherwise permitted by this proviso in an aggregate principal amount, at any one time outstanding, not to exceed $150,000,000 less the aggregate principal amount of any KCSM Notes outstanding at the time of such incurrence (but not less than $0); provided that the limitations set forth in this paragraph shall not apply to Meridian Speedway, LLC.

 

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(c) [Reserved].

(d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person to merge into the Borrower, or permit any of its Restricted Subsidiaries to do so, except that:

(i) any Restricted Subsidiary of the Borrower may merge into or consolidate with the Borrower or any other Restricted Subsidiary of the Borrower, provided that, in the case of any such merger or consolidation to which the Borrower is a party, the Person formed by such merger or consolidation shall be the Borrower, provided further that, in the case of any such merger or consolidation to which a Guarantor is a party, the Person formed by such merger or consolidation shall be a Guarantor;

(ii) in connection with any acquisition not prohibited hereunder, any Restricted Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a Loan Party or the Borrower shall comply with the Section 5.01(h) with respect to such surviving Person; and

(iii) in connection with any sale or other disposition permitted under Section 5.02(e) (other than clause (ii) thereof), any Restricted Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it;

provided, however, that in each case, immediately before and after giving effect thereto, no Default shall have occurred and be continuing.

(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose of, or permit any of its Restricted Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets, except:

(i) sales or leases of inventory in all of its forms (including, without limitation, (A) all raw materials, work in process, finished goods and materials used or consumed in the manufacture, production, preparation or shipping thereof, (B) goods in which such Loan Party has an interest in mass or a joint or other interest or right of any kind (including, without limitation, goods in which the Borrower or such Restricted Subsidiary (as applicable) has an interest or right as consignee) and (C) goods that are returned to or repossessed or stopped in transit by the Borrower or such Restricted Subsidiary (as applicable)), and all accessions thereto and products thereof and documents therefor, and all software related thereto, including, without limitation, software that is embedded in and is part of the inventory), used or surplus equipment, non-operating assets and non-income producing assets, and leases of any other assets, in each case in the ordinary course of its business, and the granting of any option or other right to purchase, lease, license or otherwise acquire inventory in the ordinary course of its business;

(ii) in a transaction authorized by Section 5.02(d);

(iii) sales, leases, transfers or other dispositions of assets among any of the Borrower and its Restricted Subsidiaries;

 

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(iv) sales, leases, transfers or other dispositions of assets subject to compliance on a Pro Forma Basis with Sections 5.04(a) and (b);

(v) sales, transfers and other dispositions of accounts receivable pursuant to one or more Securitization Transactions;

(vi) dispositions of cash and Cash Equivalents in the ordinary course of business, and

(vii) an exchange of locomotives or other rolling stock of substantially the same condition and value among the Loan Parties and any other Subsidiaries of the Borrower.

(f) [Reserved].

(g) Restricted Payments. Unless the Borrower is in compliance on a Pro Forma Basis with Sections 5.04(a) and (b), declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its Restricted Subsidiaries to do any of the foregoing, or permit any of its Restricted Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in the Borrower (each, a “Restricted Payment”), except that:

(i) The Borrower may (A) declare and pay dividends and distributions payable only in common stock of the Borrower, (B) make payments restricted by this Section pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, and (C) purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests made by exchange for, or out of the proceeds of the substantially contemporaneous sale of, Equity Interests, and (D) so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom, pay cash dividends with respect to shares of its Preferred Interests in respect of which cash dividends are payable or which require redemptions or repurchases in cash,

(ii) any Restricted Subsidiary of the Borrower may (A) declare and pay dividends ratably with respect to its capital stock or other Equity Interests and (B) declare and pay dividends in cash or property to any other Loan Party of which it is a Subsidiary,

(iii) payments or distributions to dissenting stockholders pursuant to applicable law or in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a consolidation, merger or transfer of assets permitted by the terms of this Agreement,

(iv) cash payments in lieu of the issuance of fractional shares, and

(v) the Borrower may pay any dividend within 60 days after the declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Agreement.

 

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(h) [Reserved].

(i) Nature of Business. The Borrower will not alter the character of its business from that conducted as of the Effective Date and reasonable extensions thereof and businesses and activities ancillary or complimentary thereto.

(j) [Reserved].

(k) [Reserved].

(l) Payment Restrictions Affecting Restricted Subsidiaries. Enter into or suffer to exist, or permit any of its Restricted Subsidiaries to enter into or suffer to exist, any agreement or arrangement limiting the ability of any of its Restricted Subsidiaries to declare or pay dividends or other distributions in respect of its Equity Interests or repay or prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in, the Borrower or any Restricted Subsidiary of the Borrower, except (i) the Loan Documents; (ii) any agreement or instrument evidencing Surviving Debt; (iii) any agreement or instrument in effect at the time such Subsidiary becomes a Restricted Subsidiary of the Borrower, so long as such agreement or instrument was not entered into solely in contemplation of such Person becoming a Restricted Subsidiary of the Borrower; (iv) the agreements entered into in connection with the formation, ownership and governance of Meridian Speedway, as well as any restrictions applicable to any other joint venture that is a Subsidiary existing at the time of the acquisition thereof, provided that the restrictions applicable to such joint venture are not made more burdensome, from the perspective of the Borrower and its Restricted Subsidiaries, than those as in effect immediately before giving effect to the consummation of the respective investment; (v) an agreement effecting a refinancing, replacement or substitution of Debt issued, assumed or incurred pursuant to an agreement or instrument referred to in clause (ii) above; provided, that the provisions relating to such encumbrance or restriction contained in any such refinancing, replacement or substitution agreement are no less favorable to the Borrower or the Lenders in any material respect than the provisions relating to such encumbrance or restriction contained in the agreements or instruments referred to in such clause (ii); (vi) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of the Borrower or any of its Restricted Subsidiaries; (vii) customary provisions restricting assignment of any licensing agreement (in which the Borrower or any of its Restricted Subsidiaries is the licensee) or other contract entered into by the Borrower or any of its Restricted Subsidiaries in the ordinary course of business; (viii) restrictions on the transfer of any asset pending the closing of the sale of such asset; (ix) restrictions on the transfer of any asset subject to purchase money Liens or Liens arising in connection with Capitalized Lease Obligations; (x) negative pledges and restrictions on Liens in favor of any holder of Debt for Borrowed Money permitted under Section 5.02(b); or (xi) encumbrances or restrictions on cash or other deposits or net worth imposed by customers under agreements entered into in the ordinary course of business.

(m) Transactions with Affiliates. The Borrower will not, nor will its permit any of its Restricted Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (i) transactions on terms and conditions not less favorable to the Borrower or such Restricted Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (ii) transactions between or among (A) the Borrower and Restricted Subsidiaries that are Loan Parties not involving any other Affiliate and (B) Restricted Subsidiaries that are not Loan Parties not involving any other Affiliate, (iii) loans or advances to employees, officers or directors in the ordinary course of business of the Borrower or any of its

 

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Restricted Subsidiaries, (iv) to the extent not prohibited by this Agreement, the issuance or sale of Equity Interests (other than Disqualified Equity Interests) to Affiliates, or the receipt of capital contributions from holders of their Equity Interests, (v) payment in the ordinary course of business of compensation and fees to, and the provision of indemnities on behalf of, officers or directors of the Borrower or any Restricted Subsidiary and (vi) Debt permitted under Section 5.02(b), Restricted Payments permitted under Section 5.02(g) (to the extent applicable) and sales, leases, transfers or other disposition of assets permitted under Section 5.02(e); provided, however, that notwithstanding anything in the foregoing to the contrary, the Borrower may, and may permit any Restricted Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any other Loan Party or Subsidiary.

SECTION 5.03. Reporting Requirements. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding (other than Letters of Credit that have been Cash Collateralized) or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to the Agents and the Lender Parties:

(a) Default Notice, Etc. As soon as possible and in any event within five Business Days after any officer of the Borrower obtains knowledge of the occurrence of each Default, a statement of the chief financial officer or other senior financial or accounting officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto.

(b) Annual Financials. As soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of audited financial statements for such year for the Borrower and its Subsidiaries, including therein a Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such Fiscal Year and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Consolidated Subsidiaries for such Fiscal Year, in each case accompanied by (A) an opinion (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit (other than as may be required as a result of the impending maturity of any Debt under this Agreement)) of KPMG LLP or other independent public accountants of recognized national standing, and (B) a certificate of the chief financial officer or other senior financial or senior accounting officer of the Borrower stating that, to such officer’s knowledge after due inquiry, no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto, together with a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by the Borrower in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04.

(c) Quarterly Financials. As soon as available and in any event within 50 days after the end of each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Consolidated Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Consolidated Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by the chief

 

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financial officer or other senior financial or senior accounting officer of the Borrower as having been prepared in accordance with GAAP, together with (A) a certificate of said officer stating that, to such officer’s knowledge after due inquiry, no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto and (B) a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by the Borrower in determining compliance with the covenants contained in Section 5.04.

(d) Annual Forecasts. As soon as available and in any event no later than 90 days after the end of each Fiscal Year, forecasts prepared by management of the Borrower and its Restricted Subsidiaries, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a quarterly basis for the Fiscal Year following such Fiscal Year.

(e) ERISA. Promptly after any officer of the Borrower obtains knowledge thereof, written notice of the occurrence of any ERISA Event that results in, or could reasonably be expected to result in, a Material Adverse Effect.

(f) Environmental Conditions. Promptly after any officer of the Borrower obtains knowledge thereof, notice of any Environmental Action asserted in writing against any Loan Party or any of its Restricted Subsidiaries or of any noncompliance by any Loan Party or any of its Restricted Subsidiaries with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect.

(g) Material Litigation and Proceedings. Promptly after any officer of the Borrower obtains knowledge thereof, written notice of any litigation or governmental proceeding (including without limitation pursuant to any applicable Environmental Laws) pending against the Borrower or any of the Restricted Subsidiaries that could reasonably be expected to be determined adversely and, if so determined, to result in a Material Adverse Effect.

(h) Other Information. Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or prospects of any Loan Party or any of its Restricted Subsidiaries as the Administrative Agent, or any Lender Party through the Administrative Agent, may from time to time reasonably request.

Notwithstanding the foregoing, the obligations in paragraphs (b) and (c) of this Section 5.03 may be satisfied with respect to financial information of the Borrower and its Subsidiaries by furnishing the Form 10-K or 10-Q (or the equivalent), as applicable, of the Borrower filed with the SEC, provided that such materials are accompanied by the documentation specified in clauses (A) and (B) of paragraphs (b) and (c), respectively.

Documents required to be delivered pursuant to Section 5.03(b) or (c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 9.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its written request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. The Administrative

 

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Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Lead Arrangers may, but shall not be obligated to, make available to the Lenders and the Issuing Banks materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar, or a substantially similar electronic transmission system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Lead Arrangers, the Issuing Banks and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute information, they shall be treated as set forth in Section 9.10); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC.”

SECTION 5.04. Financial Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding (other than Letters of Credit that have been Cash Collateralized) or any Lender Party shall have any Commitment hereunder, the Borrower and its Consolidated Subsidiaries will:

(a) Leverage Ratio. Maintain at the end of each fiscal quarter of the Borrower a Leverage Ratio of not more than 3.75:1.00, and

(b) Interest Coverage Ratio. Maintain at the end of each fiscal quarter of the Borrower an Interest Coverage Ratio of not less than 3.00:1.00.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be continuing:

(a) (i) the Borrower shall fail to pay any principal of any Advance when the same shall become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance, or any Loan Party shall fail to make any other payment under any Loan Document, in each case under this clause (ii) within five Business Days after the same shall become due and payable; or

 

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(b) any representation or warranty made by any Loan Party (or any of its officers) under or in connection with any Loan Document shall prove to have been inaccurate in any material respect when made; or

(c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 2.14, 5.01(d) (solely with respect to the existence of the Borrower), 5.02, 5.03(a) or 5.04; or

(d) any Loan Party shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to the Borrower by the Administrative Agent; or

(e) any Loan Party or any of its Restricted Subsidiaries shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Material Debt of such Loan Party or such Restricted Subsidiary (as the case may be) that is outstanding (but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or

(f) any Loan Party or any of its Restricted Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Restricted Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 60 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party or any of its Restricted Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or

(g) any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $75,000,000 shall be rendered against any Loan Party or any of its Restricted Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

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(h) [Reserved]; or

(i) any material provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(h) shall for any reason cease to be valid and binding on or enforceable against any Loan Party party to it, or any such Loan Party shall so state in writing; or

(j) [Reserved]; or

(k) a Change of Control shall occur; or

(l) any ERISA Event shall have occurred which could reasonably be expected to have a Material Adverse Effect; or

(m) any Governmental Authority shall, by means of a final and non-appealable resolution, take any action that would prevent KCSM from carrying on, or would have a material adverse effect on, the rights conferred on KCSM under, or the material terms of, the Concession Title (excluding, for the avoidance of doubt, any such final and non-appealable resolution related to the provision of trackage rights with respect to the Concession Title); or

(n) [Reserved]; or

(o) there shall be a revocation, termination, abrogation, appropriation (rescate) or repudiation by any Person of the Concession Title, or abandonment (renuncia) of the Concession Title by KCSM;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(d)) and of an Issuing Bank to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, (A) by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, (B) by notice to each party required under the terms of any agreement in support of which a Letter of Credit is issued, request that all Obligations under such agreement be declared to be due and payable; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the U.S. Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(d)) and of an Issuing Bank to issue Letters of Credit shall automatically be terminated and (y) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any Event of Default shall have occurred and be continuing, the Administrative Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such demand the Borrower will, pay to the Administrative Agent on behalf of the Lender Parties in same day funds at the Administrative Agent’s Office, for deposit in the L/C Collateral Account, an amount equal to the aggregate Available

 

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Amount of all Letters of Credit then outstanding; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the U.S. Bankruptcy Code, the Borrower will pay to the Administrative Agent on behalf of the Lender Parties in same day funds at the Administrative Agent’s Office, for deposit in the L/C Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. If at any time the Administrative Agent or the Administrative Agent determines that any funds held in the L/C Collateral Account are subject to any prior or pari passu right or claim of any Person other than the Agents and the Lender Parties or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Borrower will, forthwith upon demand by the Administrative Agent or the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the L/C Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Collateral Account that the Administrative Agent or the Administrative Agent, as the case may be, determines in good faith to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Collateral Account, such funds shall be applied to reimburse the Issuing Banks or Revolving Credit Lenders, as applicable, to the extent permitted by applicable law.

ARTICLE VII

THE ADMINISTRATIVE AGENT

SECTION 7.01. Appointment and Authority. Each of the Lenders and the Issuing Banks hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except as expressly provided in Section 7.06, neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SECTION 7.02. Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 7.03. Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

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(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Bankruptcy Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Bankruptcy Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 9.01 and 6.01) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Borrower, a Lender or an Issuing Bank.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

SECTION 7.04. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of an Advance, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or an Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or an Issuing Bank prior to the making of such Advance or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

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SECTION 7.05. Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory provisions of this Article shall apply to any such sub agent and to the Affiliates of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 7.06. Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Banks and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent meeting the qualifications set forth above, provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Bank directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 2.12 and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged

 

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therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 9.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Indemnified Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.

(d) Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as an Issuing Bank, so long as, effective upon such resignation, at least one Issuing Bank remains in such capacity and/or a successor Issuing Bank is appointed in accordance with this clause (d) and the aggregate Letter of Credit Facility is not less than that in effect immediately prior to the effectiveness of such resignation. If Bank of America resigns as an Issuing Bank, it shall retain all the rights, powers, privileges and duties of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Bank and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Advances or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(d). Upon the appointment by the Borrower of a successor an Issuing Bank hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank (b) the retiring Issuing Bank shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

SECTION 7.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 7.08. No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Lead Arrangers or Co-Syndication Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Bank hereunder.

SECTION 7.09. Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Bankruptcy Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Advance or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Advances, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Banks and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Banks and the Administrative Agent under Sections 2.08 and 9.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Banks, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.08 and 9.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations under the Loan Documents or the rights of any Lender or any Issuing Bank to authorize the Administrative Agent to vote in respect of the claim of any Lender or any Issuing Bank in any such proceeding.

ARTICLE VIII

GUARANTY

SECTION 8.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all (i) Obligations of each other Loan Party now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations) and (ii) obligations of each other Loan Party to pay the principal amount of all reimbursement obligations and unpaid drawings with respect to any letters of credit issued for the account of any such Loan Party by any Lender Party or any Affiliate thereof, in each case, whether direct or indirect, absolute or contingent, and whether for principal, interest (including, without limitation, Post Petition Interest), premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise (such Obligations and obligations being the “Guaranteed Obligations”), and agrees to pay (in accordance with Section 9.04(a), and subject to the limitations set forth therein) any and all expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or any other Lender Party in enforcing any rights under this Guaranty or; provided that, notwithstanding anything to the contrary herein or in any other Loan Document, in no circumstances shall Excluded Swap Obligations constitute Guaranteed Obligations. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Loan Party to any Lender Party under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan Party.

 

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(b) Each Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and each other Lender Party, hereby confirms that it is the intention of all such Persons that this Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Administrative Agent, the other Lender Parties and the Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Lender Party under this Guaranty or any other guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Lender Parties under or in respect of the Loan Documents.

SECTION 8.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Lender Party with respect thereto. The Obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;

(c) any taking, release or amendment or waiver of, or consent to departure from, any other guaranty, for all or any of the Guaranteed Obligations;

(d) any change, restructuring or termination of the corporate structure or existence of any Loan Party or any of its Subsidiaries;

(e) any failure of any Lender Party to disclose to any Loan Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to such Lender Party (each Guarantor waiving any duty on the part of the Lender Parties to disclose such information);

 

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(f) the failure of any other Person to execute or deliver this Guaranty, any Guaranty Supplement or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

(g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Lender Party that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made.

SECTION 8.03. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that any Lender Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Loan Party or any other Person.

(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by any Lender Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of such Guarantor hereunder.

(d) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Lender Party to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known by such Lender Party.

(e) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 8.02 and this Section 8.03 are knowingly made in contemplation of such benefits.

SECTION 8.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower, any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty or any other Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Lender Party against the Borrower, any other Loan Party or any other insider guarantor, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrower, any other Loan Party or any other insider guarantor,

 

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directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash (other than contingent Obligations in respect of indemnities for which a claim has not been made), and all Letters of Credit shall have expired or been terminated or Cash Collateralized and the Commitments shall have expired or been terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence, such amount shall be received and held in trust for the benefit of the Lender Parties, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to any Lender Party of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty (other than contingent Obligations in respect of indemnities for which a claim has not been made) shall have been paid in full in cash, (iii) the Termination Date shall have occurred and (iv) all Letters of Credit shall have expired or been terminated or Cash Collateralized, the Lender Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.

SECTION 8.05. Guaranty Supplements. Upon the execution and delivery by any Person of a guaranty supplement in substantially the form of Exhibit F hereto (each, a “Guaranty Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and shall become and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document to a “Guarantor” shall also mean and be a reference to such Additional Guarantor, and (b) each reference herein to “ this Guaranty”, “hereunder”, “hereof” or words of like import referring to this Guaranty, and each reference in any other Loan Document to the “Guaranty”, “thereunder”, “thereof” or words of like import referring to this Guaranty, shall mean and be a reference to this Guaranty as supplemented by such Guaranty Supplement.

SECTION 8.06. [Reserved].

SECTION 8.07. Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty (other than contingent Obligations in respect of indemnities for which a claim has not been made), (ii) the Termination Date and (iii) the latest date of expiration or termination of all Letters of Credit that have not been Cash Collateralized, (b) be binding upon the Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Lender Parties and their successors, transferees and assigns. Without limiting the generality of clause (c) of the immediately preceding sentence, any Lender Party may assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitments, the Advances owing to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender Party herein or otherwise, in each case as and to the extent provided in Section 9.07. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

 

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. (a) No amendment or waiver of any provision of this Agreement or the Notes or any other Loan Document, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless in writing and signed by all of the Lender Parties (other than any Lender Party that is, at such time, a Defaulting Lender), do any of the following at any time: (i) release the Guarantors from Guaranty representing all or substantially all of the value of the Guaranty, in any transaction or series of related transactions or (ii) reduce the percentage specified in the definition of the term “Required Lenders” or amend, modify or waive any provision of this Section 9.01 that has the effect of altering the number of Lenders required to approve any amendment, modification or waiver and (b) no amendment, waiver or consent shall, unless in writing and signed by the Required Lenders and each Lender (other than any Lender that is, at such time, a Defaulting Lender) that has a Commitment under, or is owed any amounts under or in respect of, the Revolving Credit Facility if such Lender is directly and adversely affected by such amendment, waiver or consent: (i) increase or extend the Commitments of such Lender; (ii) reduce the principal of, stated rate of interest on or fee related to the Notes held by such Lender or any fees or other amounts stated to be payable hereunder to such Lender; (iii) postpone any date scheduled for any payment of principal of, or interest on, the Notes pursuant to Section 2.04 or 2.07 or any date fixed for any payment of fees hereunder or any Guaranteed Obligations payable under any Guaranty (except extensions expressly permitted in Section 2.20) or (iv) amend, modify or waive the pro rata sharing provisions of Sections 2.11 and 2.13; provided further that no amendment, waiver or consent shall, unless in writing and signed by the Issuing Banks, in addition to the Lenders required above to take such action, affect the rights or obligations of the Issuing Banks, under this Agreement; provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or the other Loan Documents; provided further that any provision of this Agreement or any other Loan Document may be amended by an agreement in writing entered into by the Borrower and the Administrative Agent to cure any ambiguity, omission, defect or inconsistency so long as, in each case, the Lenders shall have received at least five Business Days’ prior written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.

(b) Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to give effect to the terms of Sections 2.18, 2.19 or 2.20 and (b) to include appropriately the Lenders holding any Incremental Revolving Credit Commitments, Credit Agreement Refinancing Debt or Extended Revolving Credit Advances in any determination of the Required Lenders.

SECTION 9.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopy, facsimile, or e-mail communication) and mailed, telegraphed, telecopied, telexed, faxed or delivered, if to the Borrower, at its address at P.O. Box 219335, Kansas City, Missouri 64121-9335, Attention: Treasurer (Facsimile No. (816) 983-1198), with a copy to the Chief Financial Officer (Facsimile No. (816) 983-1297), and, those notices and other communications which are permitted under Section 5.03 to be provided for on the Borrower’s website on the Internet, shall be posted at the website address: http://www.kcsouthern.com/en-us; if to any Lender

 

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Party, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender Party; if to the Administrative Agent, at its address at 901 Main Street Dallas, Texas, 75202-3714, Attention: Betty Coleman (Telephone No. (972) 338-3763, Facsimile No. (214) 290-9419 and Email Address: betty.coleman@baml.com), with copy to Agency Management, 222 Broadway, 14th Floor, Mail Code: NY3-222-14-03, New York, New York 10038, Attention: Steven Gazzillo (Telephone No. (646) 556-0328, Facsimile No. (212) 901-7842 and Email Address: steven.gazzillo@baml.com); or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall, when mailed, telegraphed, telecopied, telexed, faxed or E-mailed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or facsimile or confirmed by telex answerback, respectively, except that notices and communications to the Administrative Agent pursuant to Article II, III or VII shall not be effective until received by such Agent, and that notices and communications not given during normal business hours for the recipient shall be deemed to have been given at the opening of business on the next Business Day for the recipient. Delivery by facsimile or other form of electronic communication of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibits hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof.

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender Party or the Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay within 10 Business Days after receipt of a written request together with backup documentation supporting such reimbursement request (i) all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, modification and amendment of, or any consent or waiver under, the Loan Documents (including, without limitation, (A) all reasonable due diligence, syndication, transportation, computer, duplication, audit, insurance, consultant and search fees and expenses and (B) the reasonable fees and expenses of one counsel (and (x) if reasonably necessary, a single local counsel in each relevant jurisdiction and a special or regulatory counsel in each specialty and (y) in the case of an actual or perceived conflict of interest, one additional counsel and if reasonably necessary, one additional local counsel in each relevant jurisdiction and one additional special or regulatory counsel in each specialty; provided that this clause (y) shall not apply to costs and expenses in connection with the preparation, execution and delivery of the Loan Documents) for the Agents as a whole with respect thereto, with respect to advising the Administrative Agent as to its rights and responsibilities, or the protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto) and (ii) all costs and expenses of the Administrative Agent and each Lender Party in connection with the enforcement of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally (including, without limitation, the reasonable fees and expenses of one counsel (and (x) if reasonably necessary, a single local counsel in each relevant jurisdiction and a special or regulatory counsel in each specialty and (y) in the case of an actual or perceived conflict of interest, one additional counsel and if reasonably necessary, one additional local counsel in each relevant jurisdiction and one additional special or regulatory counsel in each specialty) for the Administrative Agent and each Lender Party taken as a whole with respect thereto).

 

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(b) The Borrower agrees to indemnify, defend and save and hold harmless the Administrative Agent, the Lead Arrangers, each Lender Party and each of their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay within 10 Business Days after receipt of a written request together with backup documentation supporting such reimbursement request, any and all claims, damages, losses, liabilities and expenses (including, but not limited to, reasonable attorneys’ fees of one counsel for the Indemnified Parties and, if reasonably necessary, a single local counsel to the Indemnified Parties in each relevant jurisdiction and a special or regulatory counsel in each specialty (and, in the case of an actual or perceived conflict of interest, one additional counsel and, if reasonably necessary, one additional local counsel and one additional special or regulatory counsel for each Indemnified Party affected by such conflict)) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents or any of the transactions contemplated thereby or (ii) the actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense (x) is found by a court of competent jurisdiction in a final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party (or any Related Indemnified Party of such Indemnified Party) or a material breach by such Indemnified Party (or any Related Indemnified Party of such Indemnified Party) of its obligations under the Loan Documents or (y) has resulted from any dispute solely among Indemnified Parties or their Related Indemnified Parties other than claims against any Indemnified Party in its capacity or in fulfilling its role as an Administrative Agent or Lead Arranger or any similar role under any Facility and other than claims arising out of any act or omission on the part of the Administrative Agent, a Lead Arranger, a Lender or any of their Affiliates. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 9.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated. The Borrower also agrees not to assert any claim against the Administrative Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents or any of the transactions contemplated by the Loan Documents.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, or if the Borrower fails to make any payment or prepayment of an Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by such Lender Party setting forth in reasonable detail the basis for such demand (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

 

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(d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or any Lender Party, in its sole discretion.

(e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section 9.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Administrative Agent to declare the Notes due and payable pursuant to the provisions of Section 6.01, the Administrative Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower against any and all of the Obligations of the Borrower then due under the Loan Documents. The Administrative Agent and each Lender Party agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Agent, such Lender Party and their respective Affiliates may have.

SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent shall have been notified by each Lender Party (or otherwise received evidence satisfactory to the Administrative Agent) that such Lender Party has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and each Lender Party and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

SECTION 9.07. Assignments and Participations. (a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations under and in respect of any or all Facilities, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 (or such lesser amount as shall be approved by the Administrative Agent and, so long as no Event of Default under Section 6.01(a) or (f) shall have occurred and be continuing at the time of effectiveness of such assignment, the Borrower) under each Facility for which a Commitment is being assigned, (iii) each such assignment shall be to an Eligible Assignee and (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note or Notes subject to such assignment and a processing and recordation fee of $3,500 (unless waived by the Administration Agent in its sole discretion); provided that, only one such fee shall be payable in respect of simultaneous assignments by any Lender to its Affiliates.

 

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(b) Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender or an Issuing Bank, as the case may be, hereunder and (ii) the Lender or an Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 9.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender’s or an Issuing Bank’s rights and obligations under this Agreement, such Lender or such Issuing Bank shall cease to be a party hereto).

(c) By executing and delivering an Assignment and Acceptance, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the other parties thereto and hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the latest financial statements delivered pursuant to Section 3.01 or 5.03 (as applicable) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender or an Issuing Bank, as the case may be.

(d) The Administrative Agent, acting for this purpose (but only for this purpose) as a non-fiduciary agent of the Borrower, shall maintain at its address referred to in Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of and stated interest on the Advances owing under each Facility to, each Lender Party from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agents and the Lender Parties shall treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or the Administrative Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender Party and an assignee, together with any Note or Notes subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in

 

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substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent. In the case of any assignment by a Lender, promptly after its receipt of a notice in accordance with Section 2.16(a), the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Acceptance and, if any assigning Lender has retained a Commitment hereunder under such Facility and delivered a separate notice to the Borrower in accordance with Section 2.16(a), a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A hereto, as the case may be.

(f) Each Issuing Bank may, with the prior written consent of both the Borrower and the Administrative Agent, assign to an Eligible Assignee all of its rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time; provided, however, that each such assignment shall be to an Eligible Assignee and the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (unless waived by the Administrative Agent in its sole discretion); provided that, only one such fee shall be payable in respect of simultaneous assignments by any Lender to its Affiliates.

(g) Each Lender Party may sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the value of the Guaranty except in connection with transactions otherwise permitted hereunder.

(h) Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.07, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender Party by or on behalf of the Borrower; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

(i) Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it), including without limitation, in favor of any Federal Reserve Bank in accordance with Regulation A.

 

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(j) Notwithstanding anything to the contrary contained herein, any Lender that is a fund that invests in bank loans may create a security interest in all or any portion of the Advances owing to it and the Note or Notes held by it to the trustee for holders of obligations owed, or securities issued, by such fund as security for such obligations or securities, provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 9.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(k) Notwithstanding anything to the contrary contained herein, any Lender Party (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Advance that such Granting Lender would otherwise be obligated to make pursuant to this Agreement, provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Advance, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender. Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender Party would be liable, (ii) no SPC shall be entitled to the benefits of Sections 2.10 and 2.12 (or any other increased costs protection provision) and (iii) the Granting Lender shall for all purposes, including, without limitation, the approval of any amendment or waiver of any provision of any Loan Document, remain the Lender Party of record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior Debt of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained in this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower and the Administrative Agent and with the payment of a processing fee of $500, assign all or any portion of its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Advances to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. This subsection (k) may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advances are being funded by the SPC at the time of such amendment.

(l) Each Lender Party, acting for this purpose as a non-fiduciary agent of the Borrower, that grants a participation other rights to an SPC shall maintain a register on which it enters the name and address of each participant or SPC and the principal and interest amount of each participant’s interest or SPC’s interest in the Facility held by it (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a Participant’s interest in any commitments, advances, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Advance, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive, absent manifest error and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery by telecopier or other form of electronic communication of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

SECTION 9.09. No Liability of the Issuing Banks. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither any of the Issuing Banks nor any of its officers or directors shall be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by an Issuing Bank against presentation of documents that do not strictly comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against an Issuing Bank, and an Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that were caused by (i) an Issuing Bank’s willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) an Issuing Bank’s willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not in limitation of the foregoing, an Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

SECTION 9.10. Confidentiality. Neither the Administrative Agent nor any Lender Party shall disclose any Confidential Information to any Person without the consent of the Borrower, other than (a) to such Agent’s or such Lender Party’s Affiliates and their officers, directors, employees, agents, advisors and auditors, in each case, on a need-to-know basis, and to actual or prospective Eligible Assignees and participants, and in each case, then only to the extent that each such person shall have been instructed to keep the same confidential in accordance with this Section 9.10, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, Federal or foreign authority or examiner (including the National Association of Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender Party, (d) to any rating agency when required by it, provided that, prior to any disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information received by it from such Lender Party, provided, further, that notwithstanding anything to the contrary in this Section 9.10, any such disclosure pursuant to this subsection (d) shall require the consent of the Borrower, (e) in connection with the exercise of any right or remedy under this Agreement or any other Loan Document or (f) to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor agrees to be bound by the provisions of this Section 9.10).

SECTION 9.11. Release of Guarantees. In the event that any Loan Party sells, transfers or otherwise disposes of all of the Equity Interests of any such Loan Party in a transaction not prohibited

 

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by this Agreement, the Administrative Agent shall promptly (and the Lender Parties hereby authorize and instruct the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by the Borrower to terminate such Subsidiary’s Obligations under the Guaranty and each other Loan Document. In addition, the Administrative Agent will take such actions as are reasonably requested by the Borrower to terminate the Guaranty still in effect created by the Loan Documents when all the Obligations (other than contingent Obligations in respect of indemnities for which a claim has not been made) have been paid in full and all Letters of Credit and Commitments have been terminated or Cash Collateralized. The Borrower agrees to pay all reasonable out-of-pocket expenses of the Administrative Agent in connection with releases of Liens and Obligations under the Guaranty provided for in this Section.

SECTION 9.12. Non-Consenting Lenders. If, at any time, any Lender becomes a Non-Consenting Lender, then the Borrower may, at its sole cost and expense, on prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 9.07 all of its rights and obligations under this Agreement to one or more Eligible Assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person; provided further that such Non-Consenting Lender shall be entitled to receive the full outstanding principal amount of Advances so assigned, together with accrued interest and fees payable in respect of such Advances as of the date of such assignment.

SECTION 9.13. Patriot Act Notice. Each Lender to whom the Patriot Act applies and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or such Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide such information and take such actions as are reasonably requested by the Administrative Agent or any Lender in order to assist the Agents and the Lenders in maintaining compliance with the Patriot Act.

SECTION 9.14. Jurisdiction, Service of Process, Etc.. (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(c) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.02. Nothing in this agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

 

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SECTION 9.15. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 9.16. WAIVER OF JURY TRIAL. EACH OF THE LOAN PARTIES, THE AGENTS AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

SECTION 9.17. The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Affiliates (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service, or through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Agent Party.

SECTION 9.18. Reliance by Administrative Agent, Issuing Banks and Lenders. The Administrative Agent, the Issuing Banks and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices, Committed Loan Notices and Letter of Credit Applications) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.

SECTION 9.19. Electronic Execution of Assignments and Certain Other Documents. The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including, without limitation, Assignment and Assumptions, amendments or other modifications, Committed Loan Notices, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic

 

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Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.

SECTION 9.20. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Lead Arrangers, and the Lender Parties are arm’s-length commercial transactions between the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Administrative Agent, the Lead Arrangers and the Lender Parties, on the other hand, (B) each of the Borrower and the other Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower and each other Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Lead Arrangers and each Lender Party is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower, any other Loan Party or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent, the Lead Arrangers nor any Lender Party has any obligation to the Borrower, any other Loan Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Lead Arrangers and the Lender Parties and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and neither the Administrative Agent, the Lead Arrangers nor any Lender has any obligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrower and each other Loan Party hereby waives and releases any claims that it may have against the Administrative Agent, the Lead Arrangers or any Lender Party with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.21. WAIVER OF IMMUNITIES. To the extent that any Loan Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, such Loan Party hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents. The foregoing waiver is intended to be effective to the fullest extent now or hereafter permitted by applicable law.

SECTION 9.22. Cashless Settlement. Notwithstanding anything to the contrary contained in this Agreement, any Lender may exchange, continue or rollover all or a portion of its Advances in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent and such Lender.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

KANSAS CITY SOUTHERN, as Borrower
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Executive Vice-President and Chief Financial Officer
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President & Treasurer
GATEWAY EASTERN RAILWAY COMPANY, as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President & Treasurer
SOUTHERN DEVELOPMENT COMPANY, as Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice-President and Chief Financial Officer
THE KANSAS CITY NORTHERN RAILWAY COMPANY, as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President & Treasurer

 

Signature Page to Kansas City Southern Credit Agreement

TRANS-SERVE, INC., as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
PABTEX, INC., as Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President and Chief Financial Officer
KCS HOLDINGS I, INC., as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
KCS VENTURES I, INC., as Guarantor
By:  

/s/ Michael W. Cline

  Name:   Michael W. Cline
  Title:   Vice President and Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC., as Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President and Chief Financial Officer
VEALS, INC., as Guarantor
By:  

/s/ Michael W. Upchurch

  Name:   Michael W. Upchurch
  Title:   Vice President and Chief Financial Officer

 

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BANK OF AMERICA, N.A., as Administrative Agent
By:  

/s/ Don B. Pinzon

  Name:   Don B. Pinzon
  Title:   Vice President

 

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BANK OF AMERICA, N.A., as Lender and Issuing Bank
By:  

/s/ Irene Bertozzi Bartenstein

  Name:   Irene Bertozzi Bartenstein
  Title:   Director

 

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JPMORGAN CHASE BANK, N.A., as Lender and Issuing Bank
By:  

/s/ Robert P. Kellas

  Name:   Robert P. Kellas
  Title:   Executive Director

 

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CITIBANK, N.A., as Lender and Issuing Bank
By:  

/s/ Richard Rivera

  Name:   Richard Rivera
  Title:   Vice President

 

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WELLS FARGO BANK, N.A., as Lender
By:  

/s/ Kathleen H. Gound

  Name:   Kathleen H. Gound
  Title:   Vice President

 

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Lender
By:  

/s/ Lawrence Elkins

  Name:   Lawrence Elkins
  Title:   Vice President

 

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U.S. BANK N.A., as Lender
By:  

/s/ John M. Eyerman

  Name:   John M. Eyerman
  Title:   Vice President

 

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THE BANK OF NOVA SCOTIA, as Lender
By:  

/s/ Kim Snyder

  Name:   Kim Snyder
  Title:   Director

 

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SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

SUNTRUST BANK, as Lender
By:  

/s/ Lisa Garling

  Name:   Lisa Garling
  Title:   Director

 

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SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

BMO HARRIS BANK, N.A., as Lender
By:  

/s/ William Thomson

  Name:   William Thomson
  Title:   Director

 

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SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

COMERICA BANK, as Lender
By:  

/s/ Timothy O’Rourke

  Name:   Timothy O’Rourke
  Title:   Vice President

 

Signature Page to Kansas City Southern Credit Agreement

SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

MORGAN STANLEY SENIOR FUNDING, INC., as Lender
By:  

/s/ Michael King

  Name:   Michael King
  Title:   Vice President

 

Signature Page to Kansas City Southern Credit Agreement

SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

MORGAN STANLEY BANK, N.A., as Lender
By:  

/s/ Michael King

  Name:   Michael King
  Title:   Authorized Signatory

 

Signature Page to Kansas City Southern Credit Agreement

SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

BOKF, N.A. D/B/A BANK OF KANSAS CITY, as Lender
By:  

/s/ John P. Mills

  Name:   John P. Mills
  Title:   Senior Vice President

 

Signature Page to Kansas City Southern Credit Agreement

SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

UMB BANK, N.A., as Lender
By:  

/s/ David Proffitt

  Name:   David Proffitt
  Title:   Senior Vice President

 

Signature Page to Kansas City Southern Credit Agreement

SIGNATURE PAGE TO KANSAS CITY SOUTHERN CREDIT AGREEMENT

 

COMMERCE BANK, as Lender
By:  

/s/ Pamela T. Hill

  Name:   Pamela T. Hill
  Title:   Vice President

 

Signature Page to Kansas City Southern Credit Agreement



Exhibit 99.1

 

LOGO

KCS ANNOUNCES EXCHANGE OFFERS AND CONSENT SOLICITATIONS FINAL RESULTS

FOR $2.125 BILLION OF SENIOR NOTES, ENTRY INTO NEW CREDIT FACILITY

AND COMMERCIAL PAPER PROGRAM

Approximately 96% of Total Outstanding Senior Notes Tendered

Kansas City, Missouri, December 9, 2015 — Kansas City Southern (“KCS”) (NYSE: KSU) announced today the expiration and final results of the previously announced exchange offers (the “Exchange Offers”) for any and all outstanding notes of the series set forth on the table below issued by its wholly-owned subsidiaries (i) The Kansas City Southern Railway Company (“KCSR”) and (ii) Kansas City Southern de México, S.A. de C.V. (“KCSM”) (collectively, the “Existing Notes”) and the related consent solicitations (the “Consent Solicitations”). The Consent Solicitations sought consents (the “Consents”) on behalf of KCSR or KCSM, as applicable, from each Eligible Holder (as defined below) of the Existing Notes relating to certain proposed amendments (the “Proposed Amendments”) to the indentures governing the Existing Notes (collectively, the “Existing Indentures”).

The results of the Exchange Offers and Consent Solicitations as of 11:59 p.m., New York City time, on December 8, 2015 (the “Expiration Date”), are as follows:

 

Issuer of Notes to
be Exchanged

   

    Series of Notes to be    

Exchanged

   

  Principal Amount  
Outstanding ($mm)

   

        CUSIP No.        

   

Principal Amount of
Existing Notes Exchanged
($mm)

   

Approximate Percentage
of Existing Notes
Exchanged

KCSR

   

3.85% Senior Notes due

2023

 

    $200    485188 AM8    $195.0    97.5%

KCSR

   

4.30% Senior Notes due

2043

 

    $450    485188 AN6    $437.6    97.2%

KCSR

   

4.95% Senior Notes due

2045

 

    $500    485188 AP1    $476.7    95.3%

KCSM

   

Floating Rate Senior

Notes due 2016

 

    $250    485161 AU7    $244.8    97.9%

KCSM

   

2.35% Senior Notes due

2020

 

    $275    485161 AQ6    $239.6    87.1%

KCSM

   

3.00% Senior Notes due

2023

    $450    485161 AS2    $439.1    97.6%

TOTAL

       $2,125       $2,032.9    95.7%

On December 9, 2015, KCS accepted for purchase, and paid the applicable consideration for, all Existing Notes that were validly tendered (and not validly withdrawn) in the Exchange Offers on or prior to the Expiration Date, plus accrued and unpaid interest. The consummation of the Exchange Offers and Consent Solicitations was subject to and conditional upon, among other things, KCS entering into a new $800.0 million revolving credit facility (the “KCS Revolving Credit Facility”), which occurred on December 9, 2015. The KCS Revolving Credit Facility, in turn, is expected to be used primarily to support issuance of commercial paper by KCS under a new $800.0 million commercial paper program entered into on December 9, 2015.

The Exchange Offers and Consent Solicitations were made, and the KCS Notes were offered and issued, only (a) in the United States to holders of Existing Notes who are “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) and (b) outside the United States to holders of Existing Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act (collectively, “Eligible Holders”).

KCS retained D.F. King & Co., Inc. to serve as the information agent and exchange agent for the Exchange Offers and Consent Solicitations.

The KCS Notes have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer. KCS and the guarantors have entered into a registration rights agreement with respect to the KCS Notes and the note guarantees. This press release is for informational purposes only and is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents with respect to, any securities.

Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is KCSR, serving the central and south central U.S. Its international holdings include KCSM, serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS’s North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.

This news release contains “forward-looking statements” within the meaning of the securities laws concerning potential future events involving KCS and its subsidiaries, which could materially differ from the events that actually occur. Words such as “projects,” “estimates,” “forecasts,” “believes,” “intends,” “expects,” “anticipates,” and similar expressions are intended to identify many of these forward-looking statements. Such forward-looking statements are based upon information currently available to management and management’s perception thereof as of the date hereof. Differences that actually occur could be caused by a number of external factors over which management has little or no control, including: competition and consolidation within the transportation industry; the business environment in industries that produce and use items shipped by rail; loss of the rail concession of KCS’ subsidiary, KCSM; the termination of, or failure to renew, agreements with customers, other railroads and third parties; interest rates; access to capital; disruptions to KCS’ technology infrastructure, including its computer systems; natural events such as severe weather, hurricanes and floods; market and regulatory responses to climate change; credit risk of customers and counterparties and their failure to meet their financial obligations; legislative and regulatory developments and disputes; rail accidents or other incidents or accidents on KCS’ rail network or at KCS’ facilities or customer facilities involving the release of hazardous materials, including toxic inhalation hazards; fluctuation in prices or availability of key materials, in particular diesel fuel; dependency on certain key suppliers of core rail equipment; changes in securities and capital markets; availability of qualified personnel; labor difficulties, including strikes and work stoppages; insufficiency of insurance to cover lost revenue, profits or other damages; acts of terrorism or risk of terrorist activities; war or risk of war; domestic and international economic conditions; political and economic conditions in Mexico and the level of trade between the United States and Mexico; increased demand and traffic congestion; the outcome of claims and litigation involving KCS or its subsidiaries; and other factors affecting the operation of the business. More detailed information about factors that could affect future events may be found in filings by KCS with the Securities and Exchange Commission, including KCS’ Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-4717) and subsequent reports. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. KCS is not obligated to update any forward-looking statements to reflect future events or developments.

Kansas City Southern

William H. Galligan, 816-983-1551

bgalligan@kcsouthern.com

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