Exhibit 4.1
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The Kansas City Southern Railway Company
9 1/2% Senior Notes due 2008
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INDENTURE
Dated as of September 27, 2000
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THE BANK OF NEW YORK,
as Trustee
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TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions............................................... 1
SECTION 1.02. Other Definitions......................................... 21
SECTION 1.03. Incorporation by Reference of Trust Indenture Act......... 21
SECTION 1.04. Rules of Construction..................................... 22
ARTICLE 2
The Securities
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SECTION 2.01. Amount of Securities; Issuable in Series.................. 22
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SECTION 2.02. Form and Dating........................................... 23
SECTION 2.03. Execution and Authentication.............................. 24
SECTION 2.04. Registrar and Paying Agent................................ 24
SECTION 2.05. Paying Agent to Hold Money in Trust....................... 25
SECTION 2.06. Holder Lists.............................................. 25
SECTION 2.07. Transfer and Exchange..................................... 25
SECTION 2.08. Replacement Securities.................................... 26
SECTION 2.09. Outstanding Securities.................................... 27
SECTION 2.10. Temporary Securities...................................... 27
SECTION 2.11. Cancelation............................................... 27
SECTION 2.12. Defaulted Interest........................................ 27
SECTION 2.13. CUSIP Numbers............................................. 27
ARTICLE 3
REDEMPTION
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SECTION 3.01. Notices to Trustee........................................ 28
SECTION 3.02. Selection of Securities To Be Redeemed.................... 28
SECTION 3.03. Notice of Redemption...................................... 28
SECTION 3.04. Effect of Notice of Redemption............................ 29
SECTION 3.05. Deposit of Redemption Price............................... 29
SECTION 3.06. Securities Redeemed in Part............................... 29
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ARTICLE 4
Covenants
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SECTION 4.01. Payment of Securities...................................... 30
SECTION 4.02. SEC Reports................................................ 30
SECTION 4.03. Limitation of Indebtedness................................. 30
SECTION 4.04. Limitation on Restricted Payments.......................... 32
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries.................................. 35
SECTION 4.06. Limitation on Sales of Assets and Capital Stock............ 36
SECTION 4.07. Limitation on Transactions with Affiliates................. 38
SECTION 4.08. Change of Control.......................................... 39
SECTION 4.09. Compliance Certificate..................................... 41
SECTION 4.10. Further Instruments and Acts............................... 41
SECTION 4.11. Future Note Guarantors..................................... 41
SECTION 4.12. Limitation on Lines of Business............................ 41
SECTION 4.13. Limitation on Liens........................................ 42
SECTION 4.14. Limitation on Sale/Leaseback Transactions.................. 42
SECTION 4.15. Covenant Suspension........................................ 41
ARTICLE 5
Successor Company
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SECTION 5.01. When Company May Merge or Transfer Assets.................. 43
ARTICLE 6
Defaults and Remedies
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SECTION 6.01. Events of Default.......................................... 44
SECTION 6.02. Acceleration............................................... 46
SECTION 6.03. Other Remedies............................................. 46
SECTION 6.04. Waiver of Past Defaults.................................... 47
SECTION 6.05. Control by Majority........................................ 47
SECTION 6.06. Limitation on Suits........................................ 47
SECTION 6.07. Rights of Holders to Receive Payment....................... 48
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SECTION 6.08. Collection Suit by Trustee................................. 48
SECTION 6.09. Trustee May File Proofs of Claim........................... 48
SECTION 6.10. Priorities................................................. 48
SECTION 6.11. Undertaking for Costs...................................... 48
SECTION 6.12. Waiver of Stay or Extension Laws........................... 49
ARTICLE 7
TRUSTEE
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SECTION 7.01. Duties of Trustee.......................................... 49
SECTION 7.02. Rights of Trustee.......................................... 50
SECTION 7.03. Individual Rights of Trustee............................... 51
SECTION 7.04. Trustee's Disclaimer....................................... 51
SECTION 7.05. Notice of Defaults......................................... 51
SECTION 7.06. Reports by Trustee to Holders.............................. 51
SECTION 7.07. Compensation and Indemnity................................. 52
SECTION 7.08. Replacement of Trustee..................................... 52
SECTION 7.09. Successor Trustee by Merger................................ 53
SECTION 7.10. Eligibility; Disqualification.............................. 53
SECTION 7.11. Preferential Collection of Claims Against Company.......... 54
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
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SECTION 8.01. Discharge of Liability on Securities; Defeasance........... 54
SECTION 8.02. Conditions to Defeasance................................... 55
SECTION 8.03. Application of Trust Money................................. 56
SECTION 8.04. Repayment to Company....................................... 56
SECTION 8.05. Indemnity for Government Obligations....................... 56
SECTION 8.06. Reinstatement.............................................. 56
ARTICLE 9
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Amendments
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SECTION 9.01. Without Consent of Holders................................. 57
SECTION 9.02. With Consent of Holders.................................... 58
SECTION 9.03. Compliance with Trust Indenture Act........................ 58
SECTION 9.04. Revocation and Effect of Consents and Waivers.............. 58
SECTION 9.05. Notation on or Exchange of Securities...................... 59
SECTION 9.06. Trustee to Sign Amendments................................. 59
SECTION 9.07. Payment for Consent........................................ 59
ARTICLE 10
Note Guarantees
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SECTION 10.01. Note Guarantees............................................ 60
SECTION 10.02. Limitation on Liability.................................... 61
SECTION 10.03. Successors and Assigns..................................... 62
SECTION 10.04. No Waiver.................................................. 62
SECTION 10.05. Modification............................................... 62
SECTION 10.06. Execution of Supplemental Indenture for Future............. 62
Note Guarantors
SECTION 10.07 Non-Impairment............................................. 63
ARTICLE 11
Miscellaneous
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SECTION 11.01. Trust Indenture Act Controls............................... 63
SECTION 11.02. Notices.................................................... 63
SECTION 11.03. Communication by Holders with Other Holders................ 64
SECTION 11.04. Certificate and Opinion as to Conditions Precedent......... 64
SECTION 11.05. Statements Required in Certificate or Opinion.............. 64
SECTION 11.06. When Securities Disregarded................................ 64
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar............... 65
SECTION 11.08. Legal Holidays............................................. 65
SECTION 11.09. GOVERNING LAW.............................................. 65
SECTION 11.10. No Recourse Against Others................................. 65
SECTION 11.11. Successors................................................. 65
SECTION 11.12. Multiple Originals......................................... 65
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SECTION 11.13. Table of Contents; Headings................................ 65
Appendix A - Provisions Relating to Original Securities, Additional
Securities, Private Exchange Securities and Exchange Securities
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Supplemental Indenture
Exhibit D - Form of Transferee Letter of Representation
INDENTURE dated as of September 27, 2000, among The
Kansas City Southern Railway Company, a Missouri corporation (the
"Company"), Kansas City Southern Industries, Inc., (the
"Parent"), Kansas City Southern Lines, Inc. ("KCSL"), Gateway
Eastern Railway Company, Gateway Western Railway Company, Global
Terminaling Services, Inc., KCS Transportation Company, Mid-South
Microwave, Inc., Xxxx-Xxxxxx Corporation, Southern Development
Company, Southern Industrial Services, Inc., and Trans-Serve,
Inc. (collectively, including the Parent and KCSL, the "Note
Guarantors") and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (a) the Company's 9 1/2%
Senior Notes due 2008 issued on the date hereof (the "Original Securities"), (b)
any Additional Securities (as defined herein) that may be issued on any Issue
Date (all such Securities in clauses (a) and (b) being referred to collectively
as the "Initial Securities"), (c) if and when issued as provided in the
Registration Agreement (as defined in Appendix A hereto (the "Appendix")), the
Company's 9 1/2% Senior Notes due 2008 issued in the Registered Exchange Offer
in exchange for any Initial Securities (the "Exchange Securities") and (d) if
and when issued as provided in the Registration Agreement, the Private Exchange
Securities (together with the Initial Securities and any Exchange Securities
issued hereunder, the "Securities") issued in the Private Exchange. Except as
otherwise provided herein, the Securities will be limited to $300,000,000 in
aggregate principal amount outstanding, of which $200,000,000 in aggregate
principal amount will be initially issued on the date hereof. Subject to the
conditions and in compliance with the covenants set forth herein, the Company
may issue up to $100,000,000 in aggregate principal amount of Additional
Securities.
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
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"Additional Assets" means (a) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Parent or a Restricted
Subsidiary in a Permitted Business; (b) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Parent or another Restricted Subsidiary; or (c) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary; provided, however, that: any such Restricted Subsidiary described in
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clauses (b) or (c) above is primarily engaged in a Permitted Business.
"Additional Securities" means up to $100,000,000 aggregate principal
amount of 9 1/2% Senior Notes due 2008 issued under the terms of this Indenture
subsequent to the Closing Date.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with
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such specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. For purposes of Section
4.06 and Section 4.07 only, "Affiliate" shall also mean any beneficial owner of
shares representing 5% or more of the total voting power of the Voting Stock (on
a fully diluted basis) of the Parent or the Company or of rights or warrants to
purchase such Voting Stock (whether or not currently exercisable) and any Person
who would be an Affiliate of any such beneficial owner pursuant to the first
sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Parent or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation, or similar transaction (each referred to for the purposes
of this definition as a "disposition"), of:
(a) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Parent or a Restricted Subsidiary),
(b) all or substantially all the assets of any division or line of
business of the Parent or any Restricted Subsidiary or
(c) any other assets of the Parent or any Restricted Subsidiary
outside of the ordinary course of business of the Parent or such Restricted
Subsidiary other than, in the case of (a), (b) and (c) above,
(i) disposition by a Restricted Subsidiary to the Parent or by
the Parent or a Restricted Subsidiary to a Wholly Owned Subsidiary,
(ii) for purposes of Section 4.06 only, a disposition that
constitutes a Restricted Payment permitted by Section 4.04
(iii) a disposition of assets with a Fair Market Value of less
than $100,000,
(iv) any exchange of like property pursuant to Section 1031 of
the Code for use in a Permitted Business and
(v) the disposition by (i) KCSL of any or all of its shares of
Capital Stock of Wyandotte Garage Corporation, (ii) Wyandotte Garage
Corporation of any or all of its assets, (iii) the Company of any or
all of the shares of Capital Stock of Southern Development Company and
(iv) Southern Development Company of any or all of its assets, but
only to the extent that the Net Cash Proceeds or Net Available Cash
(treating such dispositions referred to in clauses (i) - (iv) as Asset
Dispositions for purposes of the definition of "Net Available Cash")
from such dispositions are used to make leasehold improvements with a
cost not exceeding $5.0 million in the aggregate for all such
dispositions at the Parent's new leased headquarters offices
(replacing the offices located at 000 Xxxx 00xx Xxxxxx in Kansas City)
no later than one year after the applicable disposition, and
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(vi) a Grupo TFM Disposition to the extent that the Net Cash
Proceeds of such Grupo TFM Disposition are used to make a Grupo TFM
Investment or to prepay, repay, purchase, repurchase, redeem, retire,
defease or otherwise acquire for value and Indebtedness of the Parent
or a Note Guarantor, in each case within one year after such Grupo TFM
Disposition.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (a) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
scheduled redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (b) the sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement (other than the $200 million term loan due
January 11, 2001 that will be repaid with the proceeds of the Securities) and
any Refinancing Indebtedness with respect thereto, as amended from time to time,
including principal, premium (if any), interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not a claim for post-filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof. It is
understood and agreed that Refinancing Indebtedness in respect of the Credit
Agreement may be Incurred from time to time after termination of the Credit
Agreement.
"Board of Directors" means the Board of Directors of the Parent or any
committee thereof duly authorized to act on behalf of the Board of Directors of
the Parent.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.
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"Change of Control" means the occurrence of any of the following
events:
(a) at any time, less than 75% of the members of the board of
directors of the Parent shall be (1) individuals who are members of such
board on September 21, 2000 or (2) individuals whose election, or
nomination for election by the Parent's stockholders, was approved by a
vote of at least 75% of the members of the board of directors of the Parent
then still in office who are members of such board on September 21, 2000
(or whose election or nomination has been approved as provided in this
clause (2));
(b) 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 Voting Stock of the Parent, shall
become, according to public announcement or filing, the "beneficial owner"
(as defined in Rule 13d-3 issued under the Exchange Act), directly or
indirectly, of securities of the Parent representing 30% or more
(calculated in accordance with such Rule 13d-3) of the combined voting
power of the Parent's then outstanding Voting Stock;
(c) any Person other than (1) the Parent shall acquire ownership,
directly or indirectly, beneficially or of record of more than 30% of the
Voting Stock of the Company or (2) the Parent or KCSL shall acquire
ownership, directly or indirectly, beneficially or of record of more than
30% of the Voting Stock of the Company; or
(d) the merger or consolidation of the Parent, the Company or KCSL
with or into another Person or the merger of another Person with or into
the Parent, the Company or KCSL, or the sale of all or substantially all
the assets of the Parent, the Company or KCSL to another Person, and, in
the case of any such merger or consolidation, the securities of the Parent,
the Company or KCSL that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Parent, the Company or KCSL are changed into or
exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition
to any other consideration, securities of the surviving Person or
transferee that represent immediately after such transaction, at least a
majority of the aggregate voting power of the Voting Stock of the surviving
Person or transferee.
"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (a) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination
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to (b) Consolidated Interest Expense for such four fiscal quarters; provided,
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however, that:
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(i) if the Parent or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period (other than Indebtedness
under a revolving credit facility) that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period;
(ii) if the Parent or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness (other than
Indebtedness under a revolving credit facility) since the beginning of such
period or if any Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged on the date of the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated
Interest Expense for such period shall be calculated on a pro forma basis
as if such discharge had occurred on the first day of such period and as if
the Parent or such Restricted Subsidiary has not earned the interest income
actually earned during such period in respect of cash or Temporary Cash
Investments used to repay, repurchase, defease or otherwise discharge such
Indebtedness;
(iii) if since the beginning of such period the Parent or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets that are the subject of such Asset
Disposition for such period or increased by an amount equal to the EBITDA
(if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Parent or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Parent
and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Parent and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale);
(iv) if since the beginning of such period the Parent or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person that becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period; and
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(v) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Parent or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (iii) or
(iv) above if made by the Parent or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition of assets occurred on the first day
of such period. For purposes of this definition, whenever pro forma effect
is to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith, the pro
forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Parent and shall comply with the
requirements of Rule 11-02 of Regulation S-X promulgated by the SEC. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months). For
purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma
basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period.
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of the Parent and its Consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), on a Consolidated basis, after
eliminating (a) all intercompany items between the Parent and any Restricted
Subsidiary and (b) all current maturities of long-term Indebtedness, all as
determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Parent and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the Parent and its Subsidiaries in such period
but not included in such interest expense, without duplication (a) interest
expense attributable to Capitalized Lease Obligations and the interest expense
attributable to leases constituting part of a Sale/Leaseback Transaction, (b)
amortization of debt discount and debt issuance costs, (c) capitalized interest,
(d) noncash interest expense, (e) commissions, discounts and other fees and
charges attributable to letters of credit and bankers' acceptance financing, (f)
interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by the Parent or any Restricted Subsidiary, (g) net
costs associated with Hedging Obligations (including amortization of fees), (h)
dividends in respect of all Disqualified Stock of the Parent and all Preferred
Stock of any of the Subsidiaries of the Parent (other than the Company), to the
extent held by Persons other than the Parent or a Wholly Owned Subsidiary, (i)
interest Incurred in connection with investments in discontinued operations, and
(j) the cash contributions to any employee stock ownership plan or similar trust
to the extent such contributions are used by such plan or trust to pay interest
or fees to any Person (other than the Parent) in connection with Indebtedness
Incurred by such plan or trust.
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"Consolidated Net Income" means, for any period, the net income of the
Parent and its Consolidated Subsidiaries for such period; provided, however,
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that there shall not be included in such Consolidated Net Income:
(a) subject to the limitations contained in clause (b) below any net
income of any Person (other than the Parent) if such Person is not a
Restricted Subsidiary, except that (i) subject to the limitations contained
in clause (e) below, the Parent's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during
such period to the Parent or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution made
to a Restricted Subsidiary, to the limitations contained in clause (d)
below) and (ii) the Parent's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net Income;
(b) all net income and net loss attributable to each Foreign Equity
Investment shall be excluded from Consolidated Net Income, and in lieu
thereof, the amount determined as follows shall be included in Consolidated
Net Income: (i) the Parent's equity in the pretax net income and pretax net
loss attributable to each Foreign Equity Investment shall be determined in
the aggregate (so that pretax net losses offset corresponding amounts of
pretax net income); (ii) if the amount determined pursuant to subclause (i)
is positive, it shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Persons during such
period to the Parent or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution made
to a Restricted Subsidiary, to the limitations contained in clause (d)
below); and (iii) if the amount determined pursuant to subclause (i) is
negative, such loss shall be included in determining such Consolidated Net
Income;
(c) any net income (or loss) of any Person acquired by the Parent or
a Subsidiary of the Parent in a pooling of interests transaction for any
period prior to the date of such acquisition;
(d) any net income (or loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, except that (i) subject to
the limitations contained in clause (e) below, the Parent's equity in the
net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such period to
the Parent or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution made
to another Restricted Subsidiary, to the limitation contained in this
clause) and (ii) the Parent's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(e) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its Consolidated Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) that is not sold or
otherwise disposed of in the
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ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition of any Capital Stock of any Person;
(f) any extraordinary gain or loss;
(g) the cumulative effect of a change in accounting principles; and
(h) for periods prior to July 12, 2000, any net income attributable
to Xxxxxxxx Financial Inc., a Delaware corporation, and its subsidiaries.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Parent or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
Section pursuant to clause (a)(iv)(3)(D) thereof.
"Consolidated Net Tangible Assets" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) which would appear on a consolidated balance
sheet of the Parent and its Consolidated Restricted Subsidiaries, determined on
a Consolidated basis in accordance with GAAP, and after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of: (a) minority
interests in consolidated Subsidiaries held by Persons other than the Parent or
a Restricted Subsidiary; (b) excess of cost over fair value of assets of
businesses acquired, as determined in good faith by the Board of Directors; (c)
any revaluation or other write-up in book value of assets subsequent to the
Closing Date as a result of a change in the method of valuation in accordance
with GAAP consistently applied; (d) unamortized debt discount and expenses and
other unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, licenses, organization or developmental expenses
and other intangible items; (e) treasury stock; (f) cash set apart and held in a
sinking or other analogous fund established for the purpose of redemption or
other retirement of Capital Stock to the extent such obligation is not reflected
in Consolidated Current Liabilities; and (g) Investments in and assets of
Unrestricted Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Parent and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Parent ending at least 45 days prior to the taking of any action for the purpose
of which the determination is being made, as (a) the par or stated value of all
outstanding Capital Stock of the Parent plus (b) paid-in capital or capital
surplus relating to such Capital Stock plus (c) any retained earnings or earned
surplus less (i) any accumulated deficit and (ii) any amounts attributable to
Disqualified Stock.
"Consolidation" means the consolidation of the amounts of each of the
Restricted Subsidiaries with those of the Parent in accordance with GAAP
consistently applied; provided, however, that "Consolidation" shall not include
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consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Parent or any Restricted
9
Subsidiary in an Unrestricted Subsidiary shall be accounted for as an
investment. The term "Consolidated" has a correlative meaning.
"Credit Agreement" means the Credit Agreement dated as of January 11,
2000, as amended, restated, supplemented, waived, replaced (whether or not upon
termination, and whether with the original lenders or otherwise), refinanced,
restructured or otherwise modified from time to time, among the Parent, the
Company, the lenders party thereto, The Chase Manhattan Bank, as Administrative
Agent, Collateral Agent, Issuing Bank and Swingline Lender, The Bank of Nova
Scotia, as Syndication Agent, and Fleet National Bank, as Documentation Agent
(except to the extent that any such amendment, restatement, supplement, waiver,
replacement, refinancing, restructuring or other modification thereto would be
prohibited by the terms of the Indenture, unless otherwise agreed to by the
Holders of at least a majority in aggregate principal amount of Securities at
the time outstanding).
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Sale/Leaseback Transaction" means any Sale/Leaseback
Transaction that at the time of determination (a) has been designated a
Designated Sale/Leaseback Transaction by the Board of Directors by promptly
filing with the Trustee a copy of the resolution of the Board of Directors
giving effect to such designation and (b) has not been removed as a Designated
Sale/Leaseback Transaction by the Board of Directors by promptly filing with the
Trustee a copy of the resolution of the Board of Directors giving effect to such
removal.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (b) is convertible or exchangeable for
Indebtedness or Disqualified Stock (excluding Capital Stock convertible or
exchangeable solely at the option of the Parent or a Restricted Subsidiary;
provided, however, that any such conversion or exchange shall be deemed an
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Incurrence of Indebtedness or Disqualified Stock, as applicable) or (c) is
redeemable at the option of the holder thereof, in whole or in part, in the case
of each of clauses (a), (b) and (c) on or prior to the first anniversary of the
Stated Maturity of the Securities; provided, however, that any Capital Stock
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that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the provisions of Sections
4.06 and 4.08.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income: (a) income tax expense of the Parent
and its Consolidated Restricted Subsidiaries, (b) Consolidated Interest Expense,
(c) depreciation expense of the Parent and its Consolidated Restricted
Subsidiaries and (d) amortization expense of the Parent and its Consolidated
Restricted Subsidiaries (excluding amortization expense attributable to a
prepaid cash item that was paid in a prior period) in each case for such
10
period; provided, however, that (i) for any period including any fiscal quarter
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or portion thereof prior to the Spin-Off, EBITDA shall for all purposes be
determined on a pro forma basis as if the Spin-Off had occurred at the beginning
of such period and (ii) there shall be excluded in determining EBITDA for any
period including the date of the Spin-off the net effect of the aggregate amount
of restructuring charges attributable to the Spin-Off, not exceeding $3 million.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and noncash charges of, a
Restricted Subsidiary of the Parent shall be added to Consolidated Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Restricted Subsidiary was included in calculating Consolidated
Net Income and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Parent by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.
"Equity Offering" means an underwritten primary public offering of
common stock of the Parent, the Company or KCSL pursuant to an effective
registration statement under the Securities Act or a bona fide private placement
of the common stock of the Parent, the Company or KCSL on arm's length terms to
unaffiliated third parties.
"Exchange Act" means the Securities Exchange Act of 1934.
"Excluded Contributions" means net cash proceeds received by the
Parent or the Company from the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Closing Date (other than an issuance or
sale to (x) a Subsidiary of the Parent or (y) an employee stock ownership plan
or other trust established by the Parent or any of its Subsidiaries), in each
case designated as Excluded Contributions pursuant to an Officers' Certificate
executed on the date such Capital Stock is issued or sold which are excluded
from the calculation set forth in Section 4.04(a)(iv)(3).
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction.
"Foreign Equity Investment" means any investment in Mexrail, Inc., The
Texas Mexican Railway Company, TFM, Grupo TFM or Panama Canal Railway Company or
their successors for which the equity method of accounting is used.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in (a) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) statements and
pronouncements of the Financial Accounting Standards Board, (c) such other
statements by such other entities as approved by a significant segment of the
accounting profession and (d) the rules and regulations of the SEC 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 SEC.
11
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Grupo TFM" means Grupo Transportacion Ferroviaria Mexicana, S.A. de
C.V.
"Grupo TFM Disposition" means any sale, transfer or other disposition
for cash (or series of related sales, transfers or dispositions) by Caymex
Transportation, Inc. or Nafta Rail S.A. de C.V. of any shares of Capital Stock
of Nafta Rail S.A. de C.V., Grupo TFM, TFM or any combination thereof, in each
case on arm's length terms to unaffiliated third parties.
"Grupo TFM Investment" means (i) any purchase or acquisition by Nafta
Rail S.A. de C.V. of any shares of Capital Stock of Grupo TFM or TFM from the
government of Mexico or an instrumentality thereof or (ii) any capital
contribution made to Grupo TFM, TFM or both to fund the purchase by it or them,
if applicable, of shares of Capital Stock of Grupo TFM, TFM or both from the
government of Mexico or an instrumentality thereof, in each case made with the
proceeds of a Grupo TFM Disposition.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (b) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
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"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing
any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement.
"Holder" means the Person in whose name a Security is registered on
the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
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Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Subsidiary. The term "Incurrence" when used as a
noun shall have a correlative meaning. The accretion of principal of a non-
interest bearing or other discount security shall not be deemed the Incurrence
of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination, without duplication:
12
(a) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(b) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(c) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with respect
thereto);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion
of such services;
(e) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(f) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person that is not a Note Guarantor,
any Preferred Stock (but excluding, in each case, any accrued dividends);
(g) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of Indebtedness of such Person shall be
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the lesser of (i) the Fair Market Value of such asset at such date of
determination and (ii) the amount of such Indebtedness of such other
Persons;
(h) Hedging Obligations of such Person; and
(i) all obligations of the type referred to in clauses (a) through
(h) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement to which such Person is party or of which
it is a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as
13
accounts receivable on the balance sheet of the lender) or other extension of
credit (including by way of Guarantee or similar arrangement) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary" and Section 4.04, (a) "Investment" shall include the
portion (proportionate to the Parent's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Parent at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
--------
however, that upon a redesignation of such Subsidiary as a Restricted
-------
Subsidiary, the Parent shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(i) the Parent's "Investment" in such Subsidiary at the time of such
redesignation less (ii) the portion (proportionate to the Parent's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time of such redesignation; and (b) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value
at the time of such transfer.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Xxxxx'x Investors Service, Inc. or BBB- (or the
equivalent) by Standard & Poor's Ratings Group, Inc.
"Issue Date", with respect to any Initial Securities, means the date
on which the Initial Securities are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"liquidated damages" means any liquidated damages payable under a
Registration Agreement.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other non-cash form) therefrom, in each
case net of (a) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial, foreign
and local taxes required to be paid or accrued as a liability under GAAP, as a
consequence of such Asset Disposition, (b) all payments made on any Indebtedness
which is secured by any assets subject to such Asset Disposition, in accordance
with the terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law be repaid out
of the proceeds from such Asset Disposition, (c) all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Disposition and (d) appropriate amounts
to be provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the property or other assets disposed of in
14
such Asset Disposition and retained by the Parent or any Restricted Subsidiary
after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Guarantee" means each Guarantee of the obligations with respect
to the Securities issued by a Person pursuant to the terms of this Indenture.
"Note Guarantor" means any Person that has issued a Note Guarantee.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Parent. "Officer" of a Note Guarantor has a
correlative meaning.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Parent, the Company, a Note Guarantor or the Trustee.
"Parent" means Kansas City Southern Industries, Inc., a Delaware
corporation, until a successor replaces it and, thereafter, means the successor.
"Permitted Business" means any business engaged in by the Parent or
any Restricted Subsidiary on the Closing Date and any Related Business.
"Permitted Investment" means an Investment by the Parent or any
Restricted Subsidiary in (a) the Parent, a Restricted Subsidiary or a Person
that will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
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Permitted Business; (b) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Parent or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Permitted Business;
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(c) Temporary Cash Investments; (d) receivables owing to the Parent or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
--------
however, that such trade terms may include such concessionary trade terms as the
-------
Parent or any such Restricted Subsidiary deems reasonable under the
circumstances; (e) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(f) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Parent or such Restricted Subsidiary and
not exceeding $2.0 million in the aggregate outstanding at any time; (g) Stock
Purchase Loans not exceeding $3.0 million in the aggregate outstanding at any
one time; (h) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Parent or any
Restricted Subsidiary or in satisfaction of judgments; (i) any Person to the
extent such Investment represents the
15
non-cash portion of the consideration received for an Asset Disposition that was
made pursuant to and in compliance with Section 4.06; (j) The Texas Mexican
Railway Company or any other domestic railway company that owns railways that
are contiguous with those owned by the Company in the form of Guarantees for the
benefit of, or capital contributions or loans to, or sale/leaseback transactions
with, The Texas Mexican Railway Company or such other domestic railway company;
provided, however, that the aggregate amount of such capital contributions,
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loans and guaranteed Indebtedness and sale/leaseback transactions shall not
exceed $25.0 million; (k) at any time after January 1, 2001, any company that is
engaged in the same line of business as the Company or a related line of
business in the form of Guarantees for the benefit of, or capital contributions
or loans to, or sale/leaseback transactions with, such company; provided,
--------
however, that the aggregate amount of such capital contributions, loans and
-------
guaranteed Indebtedness and sale/leaseback transactions shall not exceed $25.0
million; (l) Grupo TFM Investments; or (m) the Panama Canal Railway Company;
provided, however, that the aggregate amount of all such Investments in the
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Panama Canal Railway Company made after the Closing Date shall not exceed $10.0
million.
"Permitted Liens" means, with respect to any Person:
(a) Liens to secure Indebtedness permitted pursuant to clauses (b)(i)
and (b)(vii) of Section 4.03;
(b) Liens for taxes, assessments or governmental charges or levies on
such Person's property if the same shall not at the time be delinquent or
thereafter can be paid without penalty or are being contested in good faith
and by appropriate proceedings;
(c) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business that secure payment of obligations (i) which are being contested
in good faith by appropriate proceedings or (ii) for which such Person or
any of its Subsidiaries, as applicable, has posted a bond supported only by
cash;
(d) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, laws providing for old age
pensions or other social security or retirement benefits, or similar
legislation or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which
such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government
bonds to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;
(e) utility easements, building restrictions and such other
encumbrances or charges against real property and defects and
irregularities in the title thereto or facts an accurate survey of the
property would show and landlords' and lessors' liens under leases to which
such Person or any of its Subsidiaries is a party, none of which in any
material way affect the marketability of the same or interfere with the use
thereof in the ordinary course of the business of such Person or its
Subsidiaries;
16
(f) Liens existing on the Closing Date;
(g) any Lien on any property or asset prior to the acquisition
thereof by such Person or any of its Subsidiaries or existing on any
property or asset of any other Person that becomes a Subsidiary of such
Person after the Closing Date prior to the time such other Person becomes a
Subsidiary of such Person; provided, however, that (i) such Lien is not
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created, Incurred or assumed in contemplation of or in connection with such
acquisition or such other Person becoming a Subsidiary of such Person, as
the case may be, (ii) such Lien shall not apply to any other property or
assets of such Person or its Subsidiaries and (iii) such Lien shall secure
only those obligations which it secures on the date of such acquisition or
the date such other Person becomes a Subsidiary of such Person, as the case
may be;
(h) Liens on fixed or capital assets acquired, constructed or
improved by such Person or any of its Subsidiaries; provided, however, that
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(i) such Liens secure Indebtedness permitted pursuant to Section
4.03(b)(vi), (ii) such Liens and the Indebtedness secured thereby are
Incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such Liens shall not apply
to any other property or assets of such Person or any of its Subsidiaries;
(i) judgment Liens in respect of judgments that do not constitute an
Event of Default pursuant to Section 6.01(i);
(j) Liens securing Indebtedness or other obligations of a Subsidiary
of such Person owing to such Person or a Wholly Owned Subsidiary of such
Person;
(k) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters of
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credit do not constitute Indebtedness;
(l) Liens securing obligations under Interest Rate Agreements so long
as such obligations relate to Indebtedness that is, and is permitted under
the Indenture to be, secured by a Lien on the same property securing such
obligations; and
(m) Liens to secure any Refinancing (or successive Refinancings) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in
the foregoing clauses (f), (g) and (h); provided, however, that:
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(i) such new Lien shall be limited to all or part of the same
property that secured the original Lien (plus improvements to or on
such property) and
(ii) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of: (1) the outstanding
principal amount or, if greater, committed amount of the Indebtedness
secured by Liens described under clauses (f), (g) or (h) at the time
the
17
original Lien became a Permitted Lien under this Indenture and (2) an
amount necessary to pay any fees and expenses, including premiums,
related to such Refinancings.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Purchase Money Indebtedness" means Indebtedness (a) consisting of the
deferred purchase price of an asset, conditional sale obligations, obligations
under any title retention agreement and other purchase money obligations, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (b) Incurred to finance
the acquisition by the Parent or a Restricted Subsidiary of such asset,
including additions and improvements; provided, however, that such Indebtedness
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is incurred within 180 days after the acquisition by the Parent or such
Restricted Subsidiary of such asset.
"Rating Agency" means Standard & Poor's Ratings Group, Inc. and
Xxxxx'x Investors Service, Inc. or, if Standard & Poor's Ratings Group, Inc. or
Xxxxx'x Investors Service, Inc. or both shall not make a rating on the
Securities publicly available, a nationally recognized statistical rating agency
or agencies, as the case may be, selected by the Parent (as certified by the
Board of Directors) which shall be substituted for Standard & Poor's Ratings
Group, Inc. or Xxxxx'x Investors Service, Inc. or both, as the case may be.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) any Indebtedness of the Parent or any
Restricted Subsidiary existing on the Closing Date or Incurred in compliance
with this Indenture including Indebtedness of the Parent that Refinances
Refinancing Indebtedness; provided, however, that (a) the Refinancing
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Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, (b) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced, (c) such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the aggregate principal amount (or if issued with original issue
18
discount, the aggregate accreted value) then outstanding of the Indebtedness
being Refinanced and (d) if the Indebtedness being refinanced is subordinated in
right of payment to the Securities, such Refinancing Indebtedness is
subordinated in right of payment to the Securities at least to the same extent
as the Indebtedness being Refinanced; provided further, however, that
-------- ------- -------
Refinancing Indebtedness shall not include (i) Indebtedness of a Restricted
Subsidiary that Refinances Indebtedness of the Company or (ii) Indebtedness of
the Parent or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Parent and the Restricted Subsidiaries on
the Closing Date.
"Restricted Subsidiary" means the Company and any other Subsidiary of
the Parent other than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Parent or a Restricted Subsidiary whereby
the Parent or a Restricted Subsidiary transfers such property to a Person and
the Parent or such Restricted Subsidiary leases it from such Person, other than
leases between the Parent and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien. "Secured Indebtedness" of a Note Guarantor has a correlative meaning.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" of the Company or any Note Guarantor means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization of the Company or any Note Guarantor, regardless of whether or
not a claim for post-filing interest is allowed in such proceedings) and fees
and other amounts owing in respect of, Bank Indebtedness and all other
Indebtedness of the Company or any Note Guarantor, as applicable, whether
outstanding on the Closing Date or thereafter Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such obligations are subordinated in right of payment to the
Securities or such Note Guarantor's Note Guarantee; provided, however, that
-------- -------
Senior Indebtedness shall not include (a) any obligation of the Company to the
Parent or any other Subsidiary of the Parent or any obligation of such Note
Guarantor to the Parent or any other Subsidiary of the Parent, (b) any liability
for Federal, state, local or other taxes owed or owing by the Company or such
Note Guarantor, (c) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (d) any Indebtedness or obligation of
the Company or such Note Guarantor (and any accrued and unpaid interest in
respect thereof) that by its terms is subordinate or junior in any respect to
any other Indebtedness or obligation of the Company or such Note Guarantor,
including any
19
Subordinated Obligations, (e) any obligations with respect to any Capital Stock
or (f) any Indebtedness Incurred in violation of this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary other than
the Company that would be a "Significant Subsidiary" of the Parent within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
"Spin-Off" means the distribution by the Parent of all the issued and
outstanding common stock of Xxxxxxxx Financial Inc., a Delaware corporation, to
the shareholders of the Parent on July 12, 2000 as described in the Form 10
filed by Xxxxxxxx Financial Inc. with the SEC which became effective on June 15,
2000.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the Company unless such
contingency has occurred).
"Stock Purchase Loans" means loans or advances made by the Parent or
any Restricted Subsidiary in the ordinary course of business to employees for
the purpose of purchasing restricted shares of common stock of the Parent.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement. "Subordinated Obligation" of a Note Guarantor has a
correlative meaning.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (a) such Person, (b) such Person
and one or more Subsidiaries of such Person or (c) one or more Subsidiaries of
such Person.
"Temporary Cash Investments" means any of the following: (a) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (b) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company that is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $250,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act), (c)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered into with a bank
meeting the qualifications described in clause (b) above, (d) investments in
commercial paper, maturing not more than 270 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the
20
Parent) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of "P-1" (or
higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher)
according to Standard and Poor's Ratings Service, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P"), and (e) investments in securities with maturities of
six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by S&P
or "A" by Xxxxx'x Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. '' 77aaa-
------
77bbbb) as in effect on the Closing Date, except as provided in Section 9.03.
"TFM" means Transportation Ferroviaria Mexicana, S.A. de C.V.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Parent that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (b) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Parent (including any newly acquired or newly formed Subsidiary of the
Parent but excluding the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Parent or any other Subsidiary
of the Parent that is not a Subsidiary of the Subsidiary to be so designated;
provided, however, that either (i) the Subsidiary to be so designated has total
-------- -------
Consolidated assets of $1,000 or less or (ii) if such Subsidiary has
Consolidated assets greater than $1,000, then such designation would be
permitted under Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
-------- -------
immediately after giving effect to such designation (a) the Parent could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (b) no Default shall
have occurred and be continuing. Any such designation of a Subsidiary as a
Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee
21
a copy of the resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Parent
all the Capital Stock of which (other than directors' qualifying shares) is
owned by the Parent or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
------------------
Defined in
Term Section
---- ---------------
"Additional Security".................................... Preamble
"Affiliate Transaction".................................. 4.07(a)
"Appendix"............................................... Preamble
"Bankruptcy Law"......................................... 6.01
"beneficially own"....................................... 1.01
"Change of Control Offer"................................ 4.08(b)
"covenant defeasance option"............................. 8.01(b)
"Custodian".............................................. 6.01
"Definitive Securities".................................. Appendix A
"Event of Default"....................................... 6.01
"Exchange Securities".................................... Preamble
"Global Securities"...................................... Appendix A
"Guaranteed Obligations"................................. 10.01
"incorporated provision"................................. 11.01
"Initial Securities"..................................... Preamble
legal defeasance option"................................. 8.01(b)
"Legal Holiday".......................................... 11.08
"Notice of Default"...................................... 6.01
"Offer".................................................. 4.06(b)
"Offer Amount"........................................... 4.06(c)(ii)
"Offer Period"........................................... 4.06(c)(ii)
"Original Securities".................................... Preamble
"Paying Agent"........................................... 2.04
"Private Exchange"....................................... Appendix A
"Private Exchange Securities"............................ Appendix A
"protected purchaser".................................... 2.08
"Purchase Date".......................................... 4.06(c)(i)
22
Defined in
Term Section
---- ---------------
"Registration Agreement".................................. Appendix A
"Registered Exchange Offer"............................... Appendix A
"Registrar"............................................... 2.03
"Restricted Payment"...................................... 4.04(a)
"Securities Custodian".................................... Appendix A
"Successor Company........................................ 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Note Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Note
Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
----------------------
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
23
(g) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Amount of Securities; Issuable in Series. The
----------------------------------------
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is $300,000,000. The Securities may be issued in
one or more series. All Securities of any one series shall be substantially
identical except as to denomination.
With respect to any Additional Securities issued after the Closing
Date (except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 2.07, 2.08, 2.09, 2.10 or 3.06 or the Appendix), there shall be (a)
established in or pursuant to a resolution of the Board of Directors and (b) (i)
set forth or determined in the manner provided in an Officers' Certificate or
(ii) established in one or more indentures supplemental hereto, prior to the
issuance of such Additional Securities:
(1) whether such Additional Securities shall be issued as part of a
new or existing series of Securities and the title of such Additional
Securities (which shall distinguish the Additional Securities of the series
from Securities of any other series);
(2) the aggregate principal amount of such Additional Securities which
may be authenticated and delivered under this Indenture, which shall be in
an aggregate principal amount not to exceed $100,000,000 (except for
Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the same series
pursuant to Section 2.07, 2.08, 2.09, 2.10 or 3.06 or the Appendix and
except for Securities which, pursuant to Section 2.03, are deemed never to
have been authenticated and delivered hereunder);
(3) the issue price and issuance date of such Additional Securities,
including the date from which interest on such Additional Securities shall
accrue; provided, however, that no Additional Securities may be issued at a
-------- -------
price that would cause such Additional Securities to have "original issue
discount" within the meaning of Section 1273 of the Code;
(4) if applicable, that such Additional Securities shall be issuable
in whole or in part in the form of one or more Global Securities and, in
such case, the respective depositaries for such Global Securities, the form
of any legend or legends which shall be borne by such Global Securities in
addition to or in lieu of those set forth in Exhibit A hereto and any
circumstances in addition to or in lieu of those set forth in Section 2.3
of the Appendix in which any such Global Security may be exchanged in whole
or in part for Additional Securities registered, or any transfer of such
Global Security in whole or in part may be
24
registered, in the name or names of Persons other than the depositary for
such Global Security or a nominee thereof; and
(5) if applicable, that such Additional Securities shall not be issued
in the form of Initial Securities as set forth in Exhibit A, but shall be
issued in the form of Exchange Securities as set forth in Exhibit B.
If any of the terms of any Additional Securities are established by
action taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Securities.
SECTION 2.02. Form and Dating. Provisions relating to the Original
----------------
Securities, the Additional Securities, the Private Exchange Securities and the
Exchange Securities are set forth in the Appendix, which is hereby incorporated
in and expressly made a part of this Indenture. The (a) Original Securities and
the Trustee's certificate of authentication, (b) Private Exchange Securities and
the Trustee's certificate of authentication and (c) any Additional Securities
(if issued as Transfer Restricted Securities) and the Trustee's certificate of
authentication shall each be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities and any Additional Securities issued other than as
Transfer Restricted Securities and the Trustee's certificate of authentication
shall each be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Parent, the Company or any Note Guarantor is subject, if
any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Company). Each Security shall be dated the date of its
authentication. The Securities shall be issuable only in registered form
without interest coupons and only in denominations of $1,000 and integral
multiples thereof.
SECTION 2.03. Execution and Authentication. Two Officers shall sign
-----------------------------
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to the Company. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture
25
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent. (a) The Company shall
---------------------------
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Company initially appoints the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian with respect to the Global Securities.
(b) The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Parent or any of its domestically organized Wholly Owned Subsidiaries, including
the Company, may act as Paying Agent or Registrar.
(c) The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
-------- -------
that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. Thereupon the removal shall
become effective and the successor or Trustee, as the case may be, shall have
all the rights, powers and duties of the Registrar or Paying Agent under this
Indenture. The Registrar or Paying Agent may resign at any time upon written
notice to the Company and the Trustee.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due
------------------------------------
date of the principal of and interest and liquidated damages (if any) on any
Security, the Company shall deposit with the Paying Agent (or if the Company or
a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust
for the benefit of the Persons entitled thereto) a sum sufficient to pay such
principal, interest and liquidated damages (if any) when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
and interest and liquidated damages (if any) on the Securities, and shall notify
the Trustee of any default by the Company in making any such payment. If the
Parent, the Company or a Subsidiary of the Parent acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying
26
with this Section, the Paying Agent shall have no further liability for the
money delivered to the Trustee.
SECTION 2.06. Holder Lists. The Trustee shall preserve in as current
-------------
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall furnish, or cause the Registrar to furnish, to the Trustee, in
writing at least five 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 Holders.
SECTION 2.07. Transfer and Exchange. The Securities shall be issued
----------------------
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer and in compliance with the Appendix. When
a Security is presented to the Registrar with a request to register a transfer,
the Registrar shall register the transfer as requested if its requirements
therefor are met. When Securities are presented to the Registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. The Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any Securities for
a period of 15 days before the mailing of a notice of redemption of Securities.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Note Guarantors, the Trustee, the Paying Agent, and
the Registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and (subject to paragraph 2 of the Securities) interest,
if any, on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, any Note Guarantor, the
Trustee, the Paying Agent, or the Registrar shall be affected by notice to the
contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interest in such Global Security
may be effected only through a book-entry system maintained by (a) the Holder of
such Global Security (or its agent) or (b) any Holder of a beneficial interest
in such Global Security, and that ownership of a beneficial interest in such
Global Security shall be required to be reflected in a book entry.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.08. Replacement Securities. If a mutilated Security is
-----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall
27
authenticate a replacement Security if the requirements of Section 8-405 of the
Uniform Commercial Code are met, such that the Holder (a) satisfies the Company
or the Trustee within a reasonable time after such Holder has notice of such
loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (b) makes such request to the
Company or the Trustee prior to the Security being acquired by a protected
purchaser as defined in Section 8-303 of the Uniform Commercial Code (a
"protected purchaser") and (c) satisfies any other reasonable requirements of
the Trustee. Such Holder shall furnish an indemnity bond sufficient in the
judgment of the Trustee to protect the Company, the Trustee, the Paying Agent
and the Registrar from any loss that any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their expenses
in replacing a Security. In the event any such mutilated, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the
Company in its discretion may pay such Security instead of issuing a new
Security in replacement thereof.
Every replacement Security is an obligation of the Company.
The provisions of this Section 2.08 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.09. Outstanding Securities. Securities outstanding at any
-----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. Subject to Section 11.06, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced or paid pursuant to Section 2.08, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced or paid Security is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal, interest and liquidated damages, if any, payable on that date
with respect to the Securities (or portions thereof) to be redeemed or maturing,
as the case may be, then on and after that date such Securities (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Securities. In the event that Definitive
---------------------
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall, upon the
written order of the Company, authenticate Definitive Securities and deliver
them in exchange for temporary Securities upon surrender of such temporary
Securities at the office or agency of the Company, without charge to the Holder.
SECTION 2.11. Cancelation. The Company at any time may deliver
------------
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall
28
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and shall dispose of canceled Securities in accordance with its
customary procedures or deliver canceled Securities to the Company pursuant to
written direction by an Officer. The Company may not issue new Securities to
replace Securities it has redeemed, paid or delivered to the Trustee for
cancelation. The Trustee shall not authenticate Securities in place of canceled
Securities other than pursuant to the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Company defaults in a
-------------------
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the Persons who
are Holders on a subsequent special record date. The Company shall fix or cause
to be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Holder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities
--------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may 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 a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP"
numbers.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
-------------------
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
---------------------------------------
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that the Trustee in its sole
discretion shall deem to be fair and appropriate. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000.
29
Securities and portions of them the Trustee selects shall be in amounts of
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. (a) At least 30 days but not
---------------------
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest to the
redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and principal amounts of the particular
Securities to be redeemed;
(vi) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, if any, printed on the Securities being
redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Securities.
(b) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
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 stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest and liquidated damages, if
any, to the redemption date; provided, however, that if the redemption date is
-------- -------
after a regular record date and on or prior to the interest payment date, the
accrued interest and liquidated damages, if any, shall be payable to the Holder
of the redeemed Securities registered on the relevant record date. Failure to
give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
30
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New
----------------------------
York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Parent, the Company or a Wholly Owned Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest and liquidated damages, if any, on all
Securities or portions thereof to be redeemed on that date other than Securities
or portions of Securities called for redemption that have been delivered by the
Company to the Trustee for cancelation. On and after the redemption date,
interest shall cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent funds
sufficient to pay the principal of, plus accrued and unpaid interest and
liquidated damages, if any, on, the Securities to be redeemed, unless the Paying
Agent is prohibited from making such payment pursuant to the terms of this
Indenture.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
----------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall promptly pay
----------------------
the principal of and interest and liquidated damages, if any, on the Securities
on the dates and in the manner provided in the Securities and in this Indenture.
Principal, interest and liquidated damages, if any, shall be considered paid on
the date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture money sufficient to pay all principal and interest then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. (a) The Parent will (i) file with the
------------
SEC and provide the Trustee for delivery to the Holders and prospective Holders
(upon request) within 15 days after it files them with the SEC a copy of its
annual report and the information, documents and other reports that are
specified in Sections 13 and 15(d) of the Exchange Act and (ii) furnish to the
Trustee for delivery to the Holders, promptly upon their becoming available, a
copy of its annual report to shareholders and any other information provided by
it to its public shareholders generally. In addition, following an underwritten
primary public offering of common stock of the Company or KCSL pursuant to an
effective registration statement under the Securities Act, the Parent shall
furnish to the Trustee for delivery to the Holders, promptly upon their becoming
available, copies of the annual report to shareholders and any other information
provided by the Company or KCSL, as applicable, to its public shareholders
generally. The Parent also will comply with the other provisions of Section
314(a) of the TIA. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any
31
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder.
(b) For so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Parent shall furnish to the Holders and prospective purchasers of the Securities
designated by Holders, upon the request of Holders or such prospective
purchasers, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to and in
compliance with Section 13 or 15(d) of the Exchange Act.
SECTION 4.03. Limitation on Indebtedness. (a) The Parent will not,
---------------------------
and will not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Indebtedness; provided, however, that the Parent or any Restricted
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Subsidiary that is a Note Guarantor may Incur Indebtedness if on the date of
such Incurrence and after giving effect thereto the Consolidated Coverage Ratio
would be greater than 2.0:1.
(b) Notwithstanding Section 4.03(a), the Parent and the Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Bank Indebtedness Incurred pursuant to the Credit Agreement in
an aggregate principal amount not to exceed (1) in the case of any such
Bank Indebtedness that consists of term borrowings, $400.0 million less the
aggregate amount of all (A) prepayments of principal applied to permanently
reduce any such Indebtedness, (B) scheduled repayments of principal of, and
reductions of commitments for, any such Indebtedness and (C) Attributable
Debt in respect of Designated Sale/Leaseback Transactions and (2) in the
case of any such Bank Indebtedness that consists of borrowings under a
revolving credit facility, $150.0 million;
(ii) Indebtedness of the Parent owed to and held by any Wholly Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
the Parent or any Wholly Owned Subsidiary; provided, however, that (1) any
-------- -------
subsequent issuance or transfer of any Capital Stock or any other event
that results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Parent or a Wholly Owned Subsidiary) shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the issuer
thereof, (2) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash
of all obligations with respect to the Notes and (3) if a Note Guarantor is
the obligor on such Indebtedness and such Indebtedness is owed to and held
by a Wholly Owned Subsidiary that is not a Note Guarantor, such
Indebtedness is expressly subordinated to the prior payment in full in cash
of all obligations of such Note Guarantor with respect to its Note
Guarantee;
(iii) Indebtedness (1) represented by the Securities (not including
any Additional Securities) and the Note Guarantees, (2) outstanding on the
Closing Date (other than the Indebtedness described in clauses (i) and (ii)
above), (3) consisting of Refinancing Indebtedness Incurred in respect of
any Indebtedness described in this clause (iii) (including Indebtedness
that is Refinancing
32
Indebtedness) or Section 4.03(a) and (4) consisting of Guarantees of any
Indebtedness permitted under clauses (i) and (ii) of this paragraph (b);
(iv) (1) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary was
acquired by the Parent (other than Indebtedness Incurred in contemplation
of, in connection with, as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Subsidiary of or was otherwise acquired by
the Parent); provided, however, that on the date that such Restricted
-------- -------
Subsidiary is acquired by the Parent, the Parent would have been able to
Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after
giving effect to the Incurrence of such Indebtedness pursuant to this
clause (iv) and (2) Refinancing Indebtedness Incurred by a Restricted
Subsidiary in respect of Indebtedness Incurred by such Restricted
Subsidiary pursuant to this clause (iv);
(v) Indebtedness (1) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Parent and the Restricted Subsidiaries in the ordinary course of their
business, and (2) under Interest Rate Agreements entered into for bona fide
hedging purposes of the Parent in the ordinary course of business;
provided, however, that such Interest Rate Agreements do not increase the
-------- -------
Indebtedness of the Parent outstanding at any time other than as a result
of fluctuations in interest rates or by reason of fees, indemnities and
compensation payable thereunder;
(vi) Purchase Money Indebtedness and Capitalized Lease Obligations
(in an aggregate principal amount not in excess of 5% of Consolidated Net
Tangible Assets at any time outstanding);
(vii) Attributable Debt in respect of Designated Sale/Leaseback
Transactions in an aggregate principal amount not to exceed $400.0 million;
or
(viii) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to Section 4.03(a) or any other clause of this Section 4.03(b)) in
an aggregate principal amount on the date of Incurrence that, when added to
all other Indebtedness Incurred pursuant to this clause (viii) and then
outstanding, will not exceed $25.0 million.
(c) Notwithstanding the foregoing, the Company or any Note
Guarantor may not Incur any Indebtedness pursuant to Section 4.03(b) if the
proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Obligations unless such
Indebtedness will be subordinated to the Notes or such Note Guarantor's Note
Guarantee, as applicable, to at least the same extent as such Subordinated
Obligations.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Parent or any Restricted Subsidiary may
Incur pursuant to this Section shall not be deemed to be exceeded solely as a
result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03:
33
(i) Indebtedness Incurred pursuant to the Credit Agreement prior to
or on the Closing Date shall be treated as Incurred pursuant to Section
4.03(b)(i),
(ii) Indebtedness permitted by this Section 4.03 need not be
permitted solely by reference to one provision permitting such Indebtedness
but may be permitted in part by one such provision and in part by one or
more other provisions of this Section permitting such Indebtedness, and
(iii) in the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in this Section, the Parent, in
its sole discretion, shall classify such Indebtedness and only be required
to include the amount of such Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. (a) The Parent
----------------------------------
will not, and will not permit any Restricted Subsidiary, directly or indirectly,
to:
(i) declare or pay any dividend, make any distribution on or in
respect of its Capital Stock or make any similar payment (including any
payment in connection with any merger or consolidation involving the
Parent, or any Subsidiary of the Parent) to the direct or indirect holders
of its Capital Stock, except (x) dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and (y) dividends or
distributions payable to the Parent or a Restricted Subsidiary (and, if
such Restricted Subsidiary has shareholders other than the Parent or other
Restricted Subsidiaries, to its other shareholders on a pro rata basis),
(ii) purchase, repurchase, redeem, retire or otherwise acquire for
value any Capital Stock of the Parent or any Restricted Subsidiary held by
Persons other than the Parent or a Restricted Subsidiary,
(iii) purchase, repurchase, redeem, retire, defease or otherwise
acquire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other than the
purchase, repurchase, redemption, retirement, defeasance or other
acquisition for value of Subordinated Obligations acquired in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition),
(iv) make any Investment (other than a Permitted Investment) in any
Person, (any such dividend, distribution, payment, purchase, redemption,
repurchase, defeasance, retirement, or other acquisition or Investment
being herein referred to as a "Restricted Payment") if at the time the
Parent or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default will have occurred and be continuing (or would
result therefrom);
(2) the Parent could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
34
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Board of Directors, whose
determination will be conclusive and evidenced by a resolution of the
Board of Directors) declared or made subsequent to the Closing Date
would exceed the sum, without duplication, of:
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning of
the fiscal quarter immediately following the fiscal quarter
during which the Closing Date occurs to the end of the most
recent fiscal quarter ending at least 45 days prior to the date
of such Restricted Payment (or, in case such Consolidated Net
Income will be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the
Parent or the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock or in respect of Excluded
Contributions) subsequent to the Closing Date (other than an
issuance or sale to (x) a Subsidiary of the Parent or (y) an
employee stock ownership plan or other trust established by the
Parent or any of its Subsidiaries);
(C) the amount by which Indebtedness of the Parent or the
Restricted Subsidiaries is reduced on the Parent's balance sheet
upon the conversion or exchange (other than by a Subsidiary of
the Parent) subsequent to the Closing Date of any Indebtedness of
the Parent or the Restricted Subsidiaries issued after the
Closing Date which is convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Parent (less the
amount of any cash or the Fair Market Value of other property
distributed by the Parent or any Restricted Subsidiary upon such
conversion or exchange);
(D) the amount equal to the net reduction in Investments
in Unrestricted Subsidiaries resulting from (x) payments of
dividends, repayments of the principal of loans or advances or
other transfers of assets to the Parent or any Restricted
Subsidiary from Unrestricted Subsidiaries or (y) the
redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition
of "Investment") not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made by the
Parent or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the
amount of Restricted Payments; and
(E) $20.0 million.
(b) The provisions of Section 4.04(a) shall not prohibit:
35
(i) any purchase, repurchase, redemption, retirement or other
acquisition for value of Capital Stock of the Parent made by exchange
for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Parent (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Parent or an
employee stock ownership plan or other trust established by the Parent
or any of its Subsidiaries); provided, however, that:
-------- -------
(1) such purchase, repurchase, redemption, retirement or
other acquisition for value will be excluded in the calculation
of the amount of Restricted Payments, and
(2) the Net Cash Proceeds from such sale applied in the
manner set forth in this clause (i) will be excluded from the
calculation of amounts under Section 4.04(a)(iv)(3)(B);
(ii) any prepayment, repayment, purchase, repurchase,
redemption, retirement, defeasance or other acquisition for value of
Subordinated Obligations of the Parent made by exchange for, or out of
the proceeds of the substantially concurrent sale of, Indebtedness of
the Parent that is permitted to be Incurred pursuant to Section
4.03(b); provided, however, that such prepayment, repayment, purchase,
-------- -------
repurchase, redemption, retirement, defeasance or other acquisition
for value will be excluded in the calculation of the amount of
Restricted Payments;
(iii) any prepayment, repayment, purchase, repurchase,
redemption, retirement, defeasance or other acquisition for value of
Subordinated Obligations from Net Available Cash to the extent
permitted by Section 4.06; provided, however, that such prepayment,
-------- -------
repayment, purchase, repurchase, redemption, retirement, defeasance or
other acquisition for value will be excluded in the calculation of the
amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividends would have
complied with Section 4.04(a); provided, however, that such dividends
-------- -------
will be included in the calculation of the amount of Restricted
Payments;
(v) dividends paid by the Parent with respect to the 242,170
outstanding shares of its preferred stock, par value $25.00 per share,
noncumulative dividends of $1.00 per share in amounts each year which
do not exceed $242,170 (the amount paid with respect to such preferred
stock in the year ended December 31, 1999); provided, however, that
-------- -------
such dividends will be included in the calculation of the amount of
Restricted Payments;
(vi) Investments that are made with Excluded Contributions;
provided, however, that such Investments will be excluded in the
-------- -------
calculation of the amount of Restricted Payments; or
36
(vii) any purchase, repurchase, redemption, retirement or other
acquisition for value of shares of, or options to purchase shares of,
common stock of the Parent or any of its Subsidiaries from employees,
former employees, directors or former directors of the Parent or any
of its Subsidiaries (or permitted transferees of such employees,
former employees, directors or former directors), pursuant to the
terms of agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which
such individuals purchase or sell or are granted the option to
purchase or sell, shares of such common stock; provided, however, that
-------- -------
the aggregate amount of such purchases, repurchases, redemptions,
retirements and other acquisitions for value will not exceed $3.0
million in any calendar year; provided further, however, that such
-------- ------- -------
purchases, repurchases, redemptions, retirements and other
acquisitions for value shall be excluded in the calculation of the
amount of Restricted Payments.
SECTION 4.05. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Parent will not, and will not permit any
------------------------
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Parent or
any Restricted Subsidiary;
(b) make any loans or advances to the Parent or any Restricted
Subsidiary; or
(c) transfer any of its property or assets to the Parent or any
Restricted Subsidiary, except:
(i) any encumbrance or restriction pursuant to applicable law
or an agreement in effect at or entered into on the Closing Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Parent (other than
Indebtedness Incurred as consideration in, in contemplation of, or to
provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was otherwise acquired by the Parent) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (i) or (ii) of this Section 4.05 or
this clause (iii) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 4.05 or this clause
(iii); provided, however, that the encumbrances and restrictions
-------- -------
contained in any such refinancing
37
agreement or amendment are no less favorable to the Holders than the
encumbrances and restrictions contained in such predecessor
agreements;
(iv) in the case of clause (c), any encumbrance or restriction
(A) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset that
is subject to a lease, license or similar contract, or
(B) contained in security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property
subject to such security agreements; and
(v) with respect to a Restricted Subsidiary, any restriction
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or
disposition.
SECTION 4.06. Limitation on Sales of Assets and Capital Stock. (a)
------------------------------------------------
The Parent will not, and will not permit any Restricted Subsidiary to, make any
Asset Disposition unless:
(i) the Parent or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to the Fair Market Value of the
shares and assets subject to such Asset Disposition,
(ii) at least 75% of the consideration thereof received by the Parent
or such Restricted Subsidiary is in the form of cash, and
(iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Parent (or such Restricted Subsidiary,
as the case may be)
(1) first, to the extent the Parent elects (or is required by
-----
the terms of any Indebtedness), to prepay, repay, purchase,
repurchase, redeem, retire, defease or otherwise acquire for value
Bank Indebtedness of the Parent or a Note Guarantor within 60 days
after the later of the date of such Asset Disposition or the receipt
of such Net Available Cash;
(2) second, to the extent of the balance of Net Available Cash
------
after application in accordance with clause (1), to the extent the
Parent or such Restricted Subsidiary elects, to reinvest in Additional
Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Parent
or another Restricted Subsidiary) within 180 days from the later of
such Asset Disposition or the receipt of such Net Available Cash;
38
(3) third, to the extent of the balance of such Net Available
-----
Cash after application in accordance with clauses (1) and (2), to make
an Offer to purchase Securities pursuant to and subject to the
conditions set forth in Section 4.06(b); provided, however, that if
-------- -------
the Parent or the Company elects (or is required by the terms of any
other Senior Indebtedness), such Offer may be made ratably to purchase
the Securities and other Senior Indebtedness of the Parent, the
Company or any Note Guarantor, and
(4) fourth, to the extent of the balance of such Net Available
------
Cash after application in accordance with clauses (1), (2) and (3),
for any general corporate purpose permitted by the terms of this
Indenture;
provided, however that in connection with any prepayment, repayment,
-------- -------
purchase, repurchase, redemption, retirement, defeasance or other acquisition
for value of Indebtedness pursuant to clause (1) or (3) above, the Parent or
such Restricted Subsidiary will retire such Indebtedness and will cause the
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid, purchased, repurchased, redeemed,
retired, defeased or otherwise acquired for value.
Notwithstanding the foregoing provisions of this Section 4.06, the
Parent and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions that is not applied
in accordance with this Section 4.06(a) exceeds $20.0 million.
For the purposes of this Section 4.06, the following are deemed to be
cash: (A) the assumption of Indebtedness of the Parent or any Restricted
Subsidiary (other than any Preferred Stock, including Disqualified Stock,
constituting Indebtedness) and the release of the Parent or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition, and (B) securities received by the Parent or any Restricted
Subsidiary from the transferee that are promptly converted by the Parent or such
Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of Securities (and other Senior Indebtedness) pursuant to Section
4.06(a)(iii)(3), the Parent or the Company will be required (i) to purchase
Securities tendered pursuant to an offer by the Company for the Securities (the
"Offer") at a purchase price of 100% of their principal amount plus accrued and
unpaid interest and liquidated damages thereon, if any, to the date of purchase
(subject to the right of Holders of record on the relevant date to receive
interest due on the relevant interest payment date) in accordance with the
procedures (including prorating in the event of oversubscription), set forth in
Section 4.06(c) and (ii) to purchase other Senior Indebtedness of the Parent,
the Company or any Note Guarantor on the terms and to the extent contemplated
thereby; provided that in no event shall the Parent or the Company offer to
--------
purchase such other Senior Indebtedness at a purchase price in excess of 100% of
its principal amount, plus accrued and unpaid interest thereon. If the
aggregate purchase price of Securities (and other Senior Indebtedness) tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase of the Securities (and other Senior Indebtedness), the Parent or the
Company will apply the remaining Net Available Cash in accordance with Section
4.06(a)(iii)(4). The Parent and the Company will not be required to make an
Offer for Securities (and other Senior Indebtedness) pursuant to this Section
4.06 if the Net
39
Available Cash available therefor (after application of the proceeds as provided
in clauses (1) and (2) of this Section 4.06(a)) is less than $20.0 million in
the aggregate for all Asset Dispositions after the Closing Date.
(c) (i) Promptly, and in any event within 10 days after the Parent or
the Company becomes obligated to make an Offer, the Parent or the Company shall
be obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Parent or the Company either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain such information concerning the business of the Parent
and the Company which the Parent and the Company in good faith believe will
enable such Holders to make an informed decision (which at a minimum shall
include (1) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Parent, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Parent filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (2) a description of material
developments in the Parent's business subsequent to the date of the latest of
such reports, and (3) if material, appropriate pro forma financial information)
and all instructions and materials necessary to tender Securities pursuant to
the Offer, together with the address referred to in clause (iii).
(ii) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Parent shall deliver to the
Trustee an Officers' Certificate as to (1) the amount of the Offer (the "Offer
Amount"), (2) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (3) the compliance
of such allocation with the provisions of Section 4.06(a). On such date, the
Parent or the Company shall also irrevocably deposit with the Trustee or with a
paying agent (or, if the Parent or the Company is acting as its own paying
agent, segregate and hold in trust) an amount equal to the Offer Amount to be
invested in Temporary Cash Investments according to the directions of the
Company and to be held for payment in accordance with the provisions of this
Section. Upon the expiration of the period for which the Offer remains open (the
"Offer Period"), the Parent or the Company shall deliver to the Trustee for
cancelation the Securities or portions thereof that have been properly tendered
to and are to be accepted by the Parent or the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the date of purchase, mail or
deliver payment to each tendering Holder in the amount of the purchase price. In
the event that the Offer Amount delivered by the Parent or the Company to the
Trustee is greater than the purchase price of the Securities tendered, the
Trustee shall deliver the excess to the Parent or the Company, as applicable,
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(iii) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Parent or the Company, as applicable, at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be entitled
to withdraw their election if the Trustee or the Parent or the Company, as
applicable, receives not later than one Business Day prior to the Purchase Date,
a telegram, telex, facsimile transmission or
40
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered by the Holder for purchase and a statement that
such Holder is withdrawing his election to have such Security purchased. If at
the expiration of the Offer Period the aggregate principal amount of Securities
included in the Offer surrendered by holders thereof exceeds the Offer Amount,
the Parent or the Company shall select the Securities to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Parent or
the Company so that only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased). Holders whose Securities are purchased
only in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(iv) At the time the Parent or the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Parent shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Parent or the Company pursuant to and in accordance with the terms of this
Section. A Security shall be deemed to have been accepted for purchase at the
time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(v) The Parent and the Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of
Securities pursuant to this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Parent and the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached their obligations under this
Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates. (a) The
-------------------------------------------
Parent will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Parent (an "Affiliate
Transaction") unless such transaction is on terms:
(i) that are no less favorable to the Parent or such Restricted
Subsidiary, as the case may be, than those that could be obtained at the
time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate,
(ii) that, in the event such Affiliate Transaction involves an
aggregate amount in excess of $5.0 million,
(1) are set forth in writing, and
(2) have been approved by a majority of the members of the
Board of Directors having no personal stake in such Affiliate
Transaction and,
(iii) that, in the event such Affiliate Transaction involves an amount
in excess of $20.0 million, have been determined by a nationally recognized
appraisal or investment banking firm to be fair, from a financial
standpoint, to the Parent and its Restricted Subsidiaries.
41
(b) The provisions of Section 4.07(a) will not prohibit:
(i) any Restricted Payment permitted to be paid pursuant to Section
4.04,
(ii) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board
of Directors,
(iii) the grant of stock options or similar rights to employees and
directors of the Parent pursuant to plans approved by the Board of
Directors,
(iv) loans or advances to employees in the ordinary course of
business in accordance with past practices of the Parent, but in any event
not to exceed $2.0 million in the aggregate outstanding at any one time,
(v) Stock Purchase Loans, but in any event not to exceed $3.0
million in the aggregate outstanding at any one time,
(vi) the payment of reasonable fees to directors of the Parent and
its Subsidiaries who are not employees of the Parent or its Subsidiaries,
or
(vii) any transaction between the Parent and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.
SECTION 4.08. Change of Control. (a) Upon a Change of Control, each
------------------
Holder will have the right to require the Company to purchase all or any part of
such Holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest and liquidated
damages, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest and liquidated damages,
if any, due on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.08(b); provided, however, that notwithstanding the
-------- -------
occurrence of a Change of Control, the Company shall not be obligated to
purchase the Securities pursuant to this Section 4.08 in the event that it has
exercised its right to redeem all the Securities under paragraph 5 of the
Securities.
(b) Within 30 days following any Change of Control (except as
provided in the proviso to the first sentence of Section 4.08(a)), the Company
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:
(i) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase all or a portion of such
Holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages, if any, to the date of purchase (subject to the right of Holders
of record on the relevant record date to receive interest and liquidated
damages, if any, on the relevant interest payment date);
(ii) the circumstances and relevant facts and financial information
regarding such Change of Control;
42
(iii) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the purchase date a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security which
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered to the Trustee for cancelation, and the
Company shall pay the purchase price plus accrued and unpaid interest and
liquidated damages, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in Section
4.08(b) applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section 4.08. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(g) Prior to any Change of Control Offer, the Company shall deliver
to the Trustee an Officers' Certificate stating that all conditions precedent
contained herein to the right of the Company to make such offer have been
complied with.
(h) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. The Company shall deliver to
-----------------------
the Trustee, one of the signers of which shall be the principal executive,
principal accounting or principal financial officer of the Company, within 120
days after the end
43
of each fiscal year of the Company an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the Company
is taking or proposes to take with respect thereto. The Company also shall
comply with Section 314(a)(4) of the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
-----------------------------
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Future Note Guarantors. The Parent will cause (i) at
-----------------------
any time that any Bank Indebtedness is outstanding, each Subsidiary of the
Parent (other than the Company, Caymex Transportation, Inc., SCC Holdings, Inc.,
The Kansas City Northern Railway Company and Xxxxx, Inc.) that enters into a
Guarantee of any Bank Indebtedness and (ii) at any time that no Bank
Indebtedness is outstanding, each Subsidiary of the Parent (other than the
Company, The Kansas City Northern Railway Company and Xxxxx, Inc.) that enters
into a Guarantee of any obligations of the Parent or any of its domestic
Subsidiaries, to execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit C pursuant to which such Subsidiary will
Guarantee payment of the Securities. Each Note Guarantee will be limited to an
amount not to exceed the maximum amount that can be Guaranteed by that Note
Guarantor without rendering the Note Guarantee, as it relates to such Note
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 4.12. Limitation on Lines of Business. The Parent will not,
--------------------------------
and will not permit any Restricted Subsidiary to, engage in any business other
than a Permitted Business. At any time that it is not Guaranteeing payment of
the Securities (which shall be effected by executing and delivering to the
Trustee a supplemental indenture in the form set forth in the Indenture), (i)
Caymex Transportation, Inc., will not engage in any business or activity other
than the ownership of the Capital Stock of foreign subsidiaries and activities
incidental thereto, (ii) SCC Holdings, Inc., will not engage in any business or
activity other than the ownership of the Capital Stock of Southern Capital LLC
and activities incidental thereto, (iii) TransFin Insurance Ltd. will not engage
in any business or activity other than the insurance business and activities
incidental thereto, and (iv) The Kansas City Northern Railway Company and Xxxxx,
Inc., will not conduct any material business or activity.
SECTION 4.13. Limitation on Liens. The Parent will not, and will not
--------------------
permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to
exist any Lien of any nature whatsoever on any of its property or assets
(including Capital Stock of a Restricted Subsidiary), whether owned at the
Closing Date or thereafter acquired, other than Permitted Liens, without
effectively providing that the Securities shall be secured equally and ratably
with (or prior to) the obligations so secured for so long as such obligations
are so secured; provided, however, that the Parent may Incur other Liens to
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secure Indebtedness as long as the amount of outstanding Indebtedness secured by
Liens Incurred pursuant to this proviso does not exceed 5% of Consolidated Net
Tangible Assets, as determined based on the consolidated balance sheet of the
Parent as of the end of the most recent fiscal quarter ending at least 45 days
prior thereto.
44
SECTION 4.14. Limitation on Sale/Leaseback Transactions. The Parent
------------------------------------------
will not, and will not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:
(a) the Parent or such Restricted Subsidiary would be entitled to:
(i) Incur Indebtedness in an amount equal to the Attributable Debt
with respect to such Sale/Leaseback Transaction pursuant to Section 4.03
and
(ii) create a Lien on such property securing such Attributable Debt
without equally and ratably securing the Securities pursuant to Section
4.13,
(b) the net proceeds received by the Parent or such Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at least
equal to the Fair Market Value of such property and
(c) the transfer of such property is permitted by, and the Parent
applies the proceeds of such transaction in compliance with, Section 4.06.
SECTION 4.15. Covenant Suspension. During any period of time that
--------------------
(a) the Securities have an Investment Grade Rating from both Rating Agencies and
(b) no Default or Event of Default has occurred and is continuing under this
Indenture, the Parent and the Restricted Subsidiaries will not be subject to the
following provisions of the Indenture: Sections 4.03, 4.04, 4.05, 4.06, 4.07
and 4.12 (collectively, the "Suspended Covenants"). In the event that the
Parent and the Restricted Subsidiaries are not subject to the Suspended
Covenants for any period of time as a result of the preceding sentence and,
subsequently, one or both of the Rating Agencies withdraws its ratings or
downgrades the ratings assigned to the Securities below the required Investment
Grade Ratings or a Default or Event of Default (other than as a result of any
breach of the Suspended Covenants) occurs and is continuing, then the Parent and
the Restricted Subsidiaries will thereafter again be subject to the Suspended
Covenants and compliance with the Suspended Covenants with respect to Restricted
Payments made after the time of such withdrawal, downgrade, Default or Event of
Default will be calculated in accordance with the terms of Section 4.04 as
though, for purposes of determining whether new Restricted Payments can be made
after such time, such covenant had been in effect during the entire period of
time from the Issue Date. The Parent shall provide prompt written notice to the
Trustee of any changes in the ratings of the Securities by the Ratings Agencies.
The Trustee shall not be required to notify the Holders of any such changes.
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. (a) When Company May Merge or Transfer Assets. The
------------------------------------------
Company will not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all /its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the
00
Xxxxxx Xxxxxx xx Xxxxxxx, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
a supplemental indenture hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company, the
Parent or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company, the Parent or such
Restricted Subsidiary at the time of such transaction), no Default shall
have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the Parent
would be able to Incur an additional $1.00 of Indebtedness pursuant to
Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount which is
not less than the Consolidated Net Worth of the Parent immediately prior to
such transaction;
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; and
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
transaction had not occurred.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a conveyance, transfer or lease of all or
substantially all its assets shall not be released from the obligation to pay
the principal of and interest on the Securities.
(b) The Note Guarantors will not consolidate with or merge with or
into, or convey, transfer or lease all or substantially all of its assets to any
Person unless: (i) the resulting, surviving or transferee Person (the "Successor
Guarantor") will be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia, and
such Person (if not such Note Guarantor) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of such Note Guarantor under
its Note Guarantee; (ii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the Successor
Guarantor or any Restricted Subsidiary as a result of such transaction as having
been Incurred by the Successor Guarantor or such Restricted Subsidiary at the
time of such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the Parent or the
Successor Guarantor, as applicable, would be able to Incur an additional $1.00
of Indebtedness under Section 4.03(a); (iv) immediately after giving effect to
such transaction, the Parent and the Restricted Subsidiaries will have
46
Consolidated Net Worth in an amount which is not less than the Consolidated Net
Worth of the Parent and the Restricted Subsidiaries immediately prior to such
transaction; (v) the Parent shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture; and (vi) the Parent shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of such transaction and will be
subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such transaction had not occurred.
(c) Notwithstanding the foregoing, (i) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any Note Guarantor; (ii) the Parent or the Company may
merge with an Affiliate incorporated solely for the purpose of reincorporating
the Parent or the Company, as the case may be, in another jurisdiction to
realize tax or other benefits; and (iii) the Parent and KCSL may merge.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
------------------
(a) the Company defaults in any payment of interest on any Security
when the same becomes due and payable or in any payment of liquidated
damages, and such default continues for a period of 30 days;
(b) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
required redemption or repurchase, upon declaration or otherwise;
(c) the Parent or any of its Subsidiaries fails to comply with Section
5.01;
(d) the Parent or any of its Subsidiaries fails to comply with Section
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13 or 4.14 (other
than a failure to purchase Securities when required under Section 4.06 or
4.08) and such failure continues for 30 days after the notice specified
below;
(e) the Parent or any of its Subsidiaries fails to comply with any of
its agreements in the Securities or this Indenture (other than those
referred to in (a), (b), (c) or (d) above) and such failure continues for
60 days after the notice specified below;
(f) Indebtedness of the Parent or any of its Subsidiaries is not paid
within any applicable grace period after final maturity or the acceleration
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $10.0 million or its foreign
currency equivalent at the time and such failure continues for 10 days
after the notice specified below;
47
(g) the Parent, the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Parent, the Company or any
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Parent, the Company or any
Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of the Parent, the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(i) any judgment or decree for the payment of money in excess of $10.0
million or its foreign currency equivalent against the Parent or any of its
Subsidiaries and either (i) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (ii) there is a period of 60
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed; or
(j) any Note Guarantee ceases to be in full force and effect (except
as contemplated by the terms thereof) or any Note Guarantor or Person
acting by or on behalf of such Note Guarantor denies or disaffirms such
Note Guarantor's obligations under this Indenture or any Note Guarantee and
such Default continues for 10 days after the notice specified below.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
------------------
similar Federal or state law for the relief of debtors. The term "Custodian"
means any
48
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A default under clauses (d), (e) or (f) will not constitute an Event
of Default until the Trustee notifies the Company or the Holders of at least 25%
in principal amount of the outstanding Securities notify the Company and the
Trustee of the Default and the Company or the Note Guarantor, as applicable,
does not cure such Default within the time specified in clauses (d), (e) or (f)
hereof after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which is, or with the giving of notice or the lapse of time or both
would become, an Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
-------------
Event of Default specified in Section 6.01(g) or (h) with respect to the Parent,
the Company or KCSL) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the outstanding Securities by notice to the
Company may declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable. Upon such a declaration, such principal and
interest will be due and payable immediately. If an Event of Default specified
in Section 6.01(g) or (h) with respect to the Parent, the Company or KCSL
occurs, the principal of and interest on all the Securities shall ipso facto
---- -----
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
---------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of 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. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
------------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to the terms of this
Indenture or (c) a Default in respect of a
49
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.05. Control by Majority. The Holders of a majority in
--------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
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the Trustee that is not inconsistent with such direction. 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
not taking such action.
SECTION 6.06. Limitation on Suits. (a) Except to enforce the right
--------------------
to receive payment of principal, premium (if any) or interest when due, no
Holder may pursue any remedy with respect to this Indenture or the Securities
unless:
(i) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(ii) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to it in its reasonable discretion against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(v) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
-------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and liquidated damages and interest on the Securities
held by such Holder, on or after the respective due dates expressed or provided
for in the Securities, 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
---------------------------
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount then due and
owing (together with
50
interest on overdue principal and (to the extent lawful) on any unpaid interest
at the rate provided for in the Securities) and the amounts provided for in
Section 7.07.
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 and the Holders allowed in
any judicial proceedings relative to the Company, any Subsidiary or Note
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make 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 it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
-----------
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, and any liquidated damages without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, interest and any liquidated
damages, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.
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 in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion 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 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
---------------------------------
nor any Note Guarantor (to the extent it may lawfully do so) shall at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Note Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the
51
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
------------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and 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 such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur 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 to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
52
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) 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 Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) In the absence of bad faith,
------------------
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 the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' 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 the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
-------- -------
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect of any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) 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, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Securities at the
time outstanding, 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 Company,
personally or by agent or attorney.
(g) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder and each agent, custodian and other Person employed
to act hereunder.
53
(h) The Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture.
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 Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent or Registrar may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
---------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Note Guarantee or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company or any Note Guarantor
in this Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication. The Trustee shall not be charged with knowledge of any Default
or Event of Default under Sections 6.01(c), (d), (e), (f), (i) or (j) or of the
identity of any Significant Subsidiary unless either (a) a Trust Officer shall
have actual knowledge thereof or (b) the Trustee shall have received notice
thereof in accordance with Section 11.02 hereof from the Company, any Note
Guarantor or any Holder.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
-------------------
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within the earlier of 90 days after it occurs or 30
days after it is known to a Trust Officer. Except in the case of a Default in
payment of principal of or interest on any Security (including payments pursuant
to the mandatory redemption provisions of such Security), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
------------------------------
practicable after each September 15 beginning with the September 15 following
the Issue Date, and in any event prior to November 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of such September 15 that
complies with Section 313(a) of the TIA if and to the extent required thereby.
The Trustee shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
---------------------------
the Trustee from time to time such compensation as the Company and the Trustee
shall from time to time agree in writing for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants
54
and experts. The Company and each Note Guarantor, jointly and severally shall
indemnify the Trustee against any and all loss, liability, damage, claim or
expense (including reasonable attorneys' fees and expenses) incurred by or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however, that any failure so to notify the Company shall not
-------- -------
relieve the Company or any Note Guarantor of its indemnity obligations
hereunder. The Company shall defend the claim and the indemnified party shall
provide reasonable cooperation at the Company's expense in the defense. Such
indemnified parties may have separate counsel and the Company and the Note
Guarantors, as applicable shall pay the fees and expenses of such counsel;
provided, however, that the Company shall not be required to pay such fees and
-------- -------
expenses if it assumes such indemnified parties' defense and, in such
indemnified parties' reasonable judgment, there is no conflict of interest
between the Company and the Note Guarantors, as applicable, and such parties in
connection with such defense. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party through such party's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest and liquidated damages, if any, on particular
Securities.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(g) or (h) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at
-----------------------
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
55
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Securities may, at the expense of the Company,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the
Trustee's duty to resign is stayed as provided in Section 310(b) of the TIA, any
Holder who has been a bona fide holder of a Security for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
----------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
------------------------------
all times satisfy the requirements of Section 310(a) of the TIA. The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall
comply with Section 310(b) of the TIA, subject to its right to apply for a stay
of its duty to resign under the penultimate paragraph of Section 310(b) of the
TIA; provided, however, that there shall be excluded from the operation of
-------- -------
Section 310(b)(1) of the TIA any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
Section 310(b)(1) of the TIA are met.
56
SECTION 7.11. Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
-------------------------------------------------
When (i) all outstanding Securities (other than Securities replaced or paid
pursuant to Section 2.08) have been canceled or delivered to the Trustee for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof, and the Company irrevocably deposits with the
Trustee funds in an amount sufficient or U.S. Government Obligations, the
principal of and interest on which will be sufficient, or a combination thereof
sufficient, in the written opinion of a nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if U.S. Government Obligations have been so deposited), to pay
the principal of and interest and liquidated damages, if any, on the outstanding
Securities when due at maturity or upon redemption of, including interest
thereon to maturity or such redemption date (other than Securities replaced or
paid pursuant to Section 2.08) and liquidated damages, if any, and if in either
case the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Parent and the Company
at any time may terminate (i) all of their obligations under the Securities and
this Indenture ("legal defeasance option") or (ii) their obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, and 4.14
and the operation of Section 5.01(a)(iii), 5.01(a)(iv), 6.01(d), 6.01(f),
6.01(g) (with respect to Significant Subsidiaries of the Parent only), 6.01(h)
(with respect to Significant Subsidiaries of the Parent only) and 6.01(i)
("covenant defeasance option"). The Parent and the Company may exercise their
legal defeasance option notwithstanding their prior exercise of their covenant
defeasance option. In the event that the Parent and the Company terminates all
of their obligations under the Securities and this Indenture by exercising its
legal defeasance option, the obligations under the Note Guarantees shall each
be terminated simultaneously with the termination of such obligations.
If the Parent and the Company exercise their legal defeasance option,
payment of the Securities may not be accelerated because of an Event of Default.
If the Parent and the Company exercise their covenant defeasance option, payment
of the Securities may not be accelerated because of an Event of Default
specified in Section 6.01(d), 6.01(f), 6.01(g) (with respect to Significant
Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only) or
6.01(i) or because of the failure of the Company to comply with clauses (iii)
and (iv) of Section 5.01(a).
57
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
SECTION 8.02. (a) Conditions to Defeasance. The Parent and the
-------------------------
Company may exercise their legal defeasance option or its covenant defeasance
option only if:
(i) the Parent and the Company irrevocably deposit in trust with the
Trustee money in an amount sufficient or U.S. Government Obligations, the
principal of and interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal of, and premium (if any), interest
and liquidated damages (if any), on the Securities when due at maturity or
redemption, as the case may be, including interest thereon to maturity or
such redemption date;
(ii) the Parent and the Company deliver to the Trustee a certificate
from a nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal, premium, if any,
interest and liquidated damages, if any, when due on all the Securities to
maturity or redemption, as the case may be;
(iii) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(g) or (h) with respect to the
Company occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other
agreement binding on the Company;
(v) the Parent and the Company deliver to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Parent and the
Company shall have delivered to the Trustee an Opinion of Counsel stating
that (1) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (2) since the date of this Indenture
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
58
(vii) in the case of the covenant defeasance option, the Parent and
the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(viii) the Parent and the Company deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as contemplated
by this Article 8 have been complied with.
(b) Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
---------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest and liquidated damages, if
any, on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
---------------------
shall promptly turn over to the Company upon request any money or U.S.
Government Obligations held by it as provided in this Article which, in the
written opinion of nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal, interest or liquidated damages that remains
unclaimed for two years, and, thereafter, Holders entitled to the money must
look to the Company for payment as general creditors, and the Trustee and the
Paying Agent shall have no further liability with respect to such monies.
SECTION 8.05. Indemnity for Government Obligations. The Company
-------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
--------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 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 Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
-------- -------
Company has made any payment of principal of or interest or liquidated damages
on, any Securities
59
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
----------
SECTION 9.01. (a) Without Consent of Holders. The Company, the Note
---------------------------
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5;
(iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
-------- -------
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(iv) add additional Guarantees with respect to the Securities;
(v) secure the Securities;
(vi) add to the covenants of the Parent and the Restricted
Subsidiaries for the benefit of the Holders or to surrender any right or
power conferred upon the Parent or the Company;
(vii) to make any change that does not adversely affect the rights of
any Holder;
(viii) provide for the issuance of the Exchange Securities, Private
Exchange Securities or Additional Securities, which shall have terms
substantially identical in all material respects to the Original Securities
(except that the transfer restrictions contained in the Original Securities
shall be modified or eliminated, as appropriate) and which shall be
treated, together with any outstanding Original Securities, as a single
issue of securities; or
(ix) to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.
SECTION 9.02. With Consent of Holders. (a) The Company, the Note
------------------------
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to
60
any Holder but with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding (including consents obtained
in connection with a tender offer or exchange for the Securities). However,
without the consent of each Holder affected, an amendment may not:
(i) reduce the amount of Securities whose Holders must consent to an
amendment;
(ii) reduce the rate of or extend the time for payment of interest or
any liquidated damages on any Security;
(iii) reduce the principal of or extend the Stated Maturity of any
Security;
(iv) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed;
(v) make any Security payable in money other than that stated in the
Security;
(vi) make any change in Section 6.04 or 6.07 or the second sentence
of this Section 9.02; or
(vii) modify the Note Guarantees in any manner adverse to the
Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
------------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. (a) A
----------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date on which the Trustee receives an Officers'
Certificate from the Company certifying that the requisite number of consents
have been received. After an amendment or waiver becomes effective, it shall
bind every Holder. An amendment or waiver becomes effective upon the (i)
receipt by the Company or the Trustee of the requisite number of consents, (ii)
satisfaction of conditions to effectiveness as set forth in this Indenture and
any indenture supplemental hereto containing such amendment or waiver and (iii)
execution of such amendment or waiver (or supplemental indenture) by the Company
and the Trustee.
(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
--------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
---------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Company and the Note
Guarantors enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03).
SECTION 9.07. Payment for Consent. Neither the Company nor any
--------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Note Guarantees
---------------
SECTION 10.01. (a) Note Guarantees. Each Note Guarantor hereby
----------------
jointly and severally irrevocably and unconditionally guarantees, as a primary
obligor and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (i) the full and punctual payment when due, whether at
Stated Maturity, by acceleration, by redemption or otherwise, of all obligations
of the Company under this Indenture (including obligations to the Trustee) and
the Securities, whether for payment of principal of, interest on or liquidated
damages, if any, in respect of the Securities and
all other monetary obligations of the Company under this Indenture and the
Securities and (ii) the full and punctual performance within applicable grace
periods of all other obligations of the Company whether for fees, expenses,
indemnification or otherwise under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the "Guaranteed Obligations").
Each Note Guarantor further agrees that the Guaranteed Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
each such Note Guarantor, and that each such Note Guarantor shall remain bound
under this Article 10 notwithstanding any extension or renewal of any Guaranteed
Obligation.
(b) Each Note Guarantor waives presentation to, demand of payment from
and protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Note Guarantor waives notice of any
default under the Securities or the Guaranteed Obligations. The obligations of
each Note Guarantor hereunder shall not be affected by (i) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (ii) any extension or renewal of
any thereof; (iii) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (iv) the release of any security held by any Holder or the Trustee
for the Guaranteed Obligations or any of them; (v) the failure of any Holder or
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (vi) any change in the ownership of such Note
Guarantor, except as provided in Section 10.02(b).
(c) Each Note Guarantor hereby waives any right to which it may be
entitled to have its obligations hereunder divided among the Note Guarantors,
such that such Note Guarantor's obligations would be less than the full amount
claimed. Each Note Guarantor hereby waives any right to which it may be
entitled to have the assets of the Company first be used and depleted as payment
of the Company's or such Note Guarantor's obligations hereunder prior to any
amounts being claimed from or paid by such Note Guarantor hereunder. Each Note
Guarantor hereby waives any right to which it may be entitled to require that
the Company be sued prior to an action being initiated against such Note
Guarantor.
(d) Each Note Guarantor further agrees that its Note Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
(e) Except as expressly set forth in Sections 8.01(b), 10.02 and
10.06, the obligations of each Note Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Note Guarantor herein shall not be discharged
or impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, wilful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Note Guarantor or would otherwise operate as a discharge of any Note
Guarantor as a matter of law or equity.
(f) Each Note Guarantor agrees that its Note Guarantee shall remain in
full force and effect until payment in full of all the Guaranteed Obligations.
Each Note Guarantor further agrees that its Note Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest or liquidated damages, if any, on
any Guaranteed Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
(g) In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any Note
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest or liquidated damages, if any, on any Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Note Guarantor hereby promises to and shall, upon receipt of
written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to
the Holders or the Trustee an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by law) and (iii) all other monetary obligations of the Company to the Holders
and the Trustee.
(h) Each Note Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations. Each Note Guarantor further agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of any Note Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article 6, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Note Guarantor for the purposes of this
Section 10.01.
(i) Each Note Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section 10.01.
(j) Upon request of the Trustee, each Note Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 10.02. Limitation on Liability. (a) Any term or provision
------------------------
of this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the Guaranteed Obligations guaranteed hereunder by any Note Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Note Guarantor, voidable under applicable
law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) A Note Guarantee as to any Note Guarantor shall terminate and be
of no further force or effect and such Note Guarantor shall be deemed to be
released from all obligations under this Article 10 upon (i) any release and
termination of the Guarantee by such Note Guarantor of the Bank Indebtedness
(other than by reason of repayment and satisfaction of all of the Bank
Indebtedness), (ii) the merger or consolidation of such Note Guarantor with or
into any Person other than the Parent or a Subsidiary or Affiliate of the Parent
where such Note Guarantor is not the surviving entity of such consolidation or
merger or (iii) the sale by the Parent or the Company or any Subsidiary of the
Company (or any pledgee of the Company) of the Capital Stock of such Note
Guarantor, where, after such sale, such Note Guarantor is no longer a Subsidiary
of the Parent; provided, however, that each such merger, consolidation or sale
-------- -------
(or, in the case of a sale by such a pledgee, the disposition of the proceeds of
such sale) shall comply with Section 4.06 and Section 5.01(b). At the request
of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release (in the form provided by the Company).
SECTION 10.03. Successors and Assigns. This Article 10 shall be
-----------------------
binding upon each Note Guarantor and its successors and assigns and shall inure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part
----------
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
-------------
any provision of this Article 10, nor the consent to any departure by any Note
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Note Guarantor in any case shall entitle such Note
Guarantor to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 10.06. Execution of Supplemental Indenture for Future Note
---------------------------------------------------
Guarantors. Each Subsidiary which is required to become a Note Guarantor
-----------
pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit C hereto pursuant to which such
Subsidiary shall become a Note Guarantor under this Article 10 and shall
guarantee the Guaranteed Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel and an Officers' Certificate to the effect that
such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar laws
relating to creditors' rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Note Guarantee of such Note
Guarantor is a legal, valid and binding obligation of such Note Guarantor,
enforceable against such Note Guarantor in accordance with its terms and or to
such other matters as the Trustee may reasonably request.
SECTION 10.07. Non-Impairment. The failure to endorse a Note Guarantee
---------------
on any Security shall not affect or impair the validity thereof.
ARTICLE 11
Miscellaneous
-------------
SECTION 11.01. Trust Indenture Act Controls. If and to the extent
-----------------------------
that any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318 of the TIA,
inclusive, such imposed duties or incorporated provision shall control.
SECTION 11.02. Notices. Any notice or communication shall be in
--------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
The Kansas City Railway Company
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention of: Xxxxxxx X. Xxxxxxx, President
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention of Corporate Trust--Trustee Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed, first
class mail, to the Holder at the Holder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
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. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders. Holders
--------------------------------------------
may communicate pursuant to Section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Securities. The Company,
the Trustee, the Registrar and anyone else shall have the protection of Section
312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form reasonably satisfactory to the
Trustee 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 in form reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
----------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.09) shall
include:
(a) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, 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 such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded. In determining whether
----------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Parent, the Company, any
Note Guarantor or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Parent, the Company or
any Note Guarantor shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which (i) a
Trust Officer of the Trustee actually knows are so owned or (ii) as to which the
Trustee shall have received notice of ownership in
accordance with Section 11.02 hereof shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
---------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
---------------
Sunday or other day on which banking institutions are not required by law or
regulation to be open in the State of New York. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
--------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.10. No Recourse Against Others. A director, officer,
---------------------------
employee or stockholder, as such, of the Parent, the Company or any of the Note
Guarantors, shall not have any liability for any obligations of the Parent, the
Company or any of the Note Guarantors under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company and each
-----------
Note Guarantor in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple 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. One signed copy is enough to prove
this Indenture.
SECTION 11.13. Table of Contents; Headings. The table of contents,
----------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have
been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
The Kansas City Southern Railway Company
by /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and Chief Financial
Officer
Kansas City Southern Industries, Inc.
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and Chief Financial
Officer
Kansas City Southern Lines, Inc.
By /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and Chief Financial
Officer
Gateway Eastern Railway Company
By /s/ Xxxxxx Xxxx
--------------------------------------
Name: Xxxxxx Xxxx
Title: Vice President and Treasurer
Gateway Western Railway Company
By /s/ Xxxxxx Xxxx
--------------------------------------
Name: Xxxxxx Xxxx
Title: Vice President and Treasurer
Global Terminaling Services, Inc.
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
KCS Transportation Company
By /s/ Xxxxxx Xxxx
--------------------------------------
Name: Xxxxxx Xxxx
Title: Vice President and Treasurer
Mid-South Microwave, Inc.
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
Xxxx-Xxxxxx Corporation
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
Southern Development Company
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
71
Southern Industrial Services, Inc.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
Trans-Serve, Inc.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as Trustee
By /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: XXXXXX X. XXXXXXXXXX
Title: Assistant Vice President
72
APPENDIX A
PROVISIONS RELATING TO ORIGINAL SECURITIES, ADDITIONAL
------------------------------------------------------
SECURITIES, PRIVATE EXCHANGE SECURITIES
---------------------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
-----------
1.1 Definitions
-----------
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Global Security,
Euroclear and Clearstream, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.
"Definitive Security" means a certificated Initial Security, Private
Exchange Security or Exchange Security (bearing the Restricted Securities Legend
if the transfer of such Security is restricted by applicable law) that does not
include the Global Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors securities clearing agency.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Chase Securities Inc., Banc One Capital
Markets, Inc., Fleet Securities, Inc. Scotia Capital (USA) Inc., ABN AMRO
Incorporated, BMO Xxxxxxx Xxxxx Corp., BNY Capital Markets, Inc. and Tokyo-
Mitsubishi International plc.
"Private Exchange" means an offer by the Company, pursuant to the
Registration Agreement, to issue and deliver to certain purchasers, in exchange
for the Initial Securities held by such purchasers as part of their initial
distribution, a like aggregate principal amount of Private Exchange Securities.
"Private Exchange Securities" means the Securities of the Company
issued in exchange for Initial Securities pursuant to this Indenture in
connection with the Private Exchange pursuant to the Registration Agreement.
73
"Purchase Agreement" means (a) the Purchase Agreement dated September
21, 2000 among the Company, the Note Guarantors and the Initial Purchasers and
(b) any other similar Purchase Agreement relating to Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for their Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means (a) the Exchange and Registration
Rights Agreement dated September 27, 2000 among the Company, the Note Guarantors
and the Initial Purchasers and (b) any other similar Exchange and Registration
Rights Agreement relating to Additional Securities.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means the period
of 40 consecutive days beginning on and including the later of (a) the day on
which such Securities are first offered to persons other than distributors (as
defined in Regulation S under the Securities Act) in reliance on Regulation S,
notice of which day shall be promptly given by the Company to the Trustee, and
(b) the Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed by
the Company in connection with the offer and sale of Initial Securities pursuant
to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
74
1.2 Other Definitions
-----------------
Term: Defined in Section:
---- ------------------
"Agent Members"........................................ 2.1(c)
"IAI Global Security".................................. 2.1(b)
"Global Security"...................................... 2.1(b)
"Regulation S Global Security"......................... 2.1(b)
"Rule 144A Global Security"............................ 2.1(b)
2. The Securities
--------------
2.1 Form and Dating
---------------
(a) The Initial Securities issued on the date hereof will be (i)
offered and sold by the Company pursuant to the Purchase Agreement and (ii)
resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Initial Securities may thereafter be transferred to, among others,
QIBs, purchasers in reliance on Regulation S and, except as set forth below,
IAIs in accordance with Rule 501. Additional Securities offered after the date
hereof may be offered and sold by the Company from time to time pursuant to one
or more Purchase Agreements in accordance with applicable law.
(b) Global Securities. Rule 144A Securities shall be issued
------------------
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend and
Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as provided in
this Indenture. One or more global securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the "IAI Global Security") shall
also be issued on the Closing Date, deposited with the Securities Custodian, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture to accommodate transfers of beneficial interests in the Securities to
IAIs subsequent to the initial distribution. Beneficial ownership interests in
the Regulation S Global Security shall not be exchangeable for interests in the
Rule 144A Global Security, the IAI Global Security or any other Security without
a Restricted Securities Legend until the expiration of the Restricted Period.
The Rule 144A Global Security, the IAI Global Security and the Regulation S
Global Security are each referred to herein as a "Global Security" and are
collectively referred to herein as "Global Securities", provided, that the term
--------
"Global Security" when used in Sections 2.1(b)(third paragraph), 2.1(c),
2.3(g)(i), 2.3(h)(i) and 2.4 shall also include any Security in global form
issued in connection with a Registered Exchange Offer or Private Exchange. The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee and on the schedules thereto as hereinafter provided.
75
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a
----------------------
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(c) and Section 2.2 and pursuant to an order of the Company
signed by two Officers, authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (ii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as Securities Custodian.
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 by the Trustee as Securities Custodian or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company 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 of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(d) Definitive Securities. Except as provided in Section 2.3 or 2.4,
----------------------
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and make available for
---------------
delivery upon a written order of the Company signed by two Officers (a) Original
Securities for original issue on the date hereof in an aggregate principal
amount of $200,000,000 (b) subject to the terms of this Indenture, Additional
Securities in an aggregate principal amount of up to $100,000,000 and (c) the
(i) Exchange Securities for issue only in a Registered Exchange Offer and (ii)
Private Exchange Securities for issue only in the Private Exchange, in the case
of each of (i) and (ii) pursuant to the Registration Agreement and for a like
principal amount of Initial Securities exchanged pursuant thereto. Such order
shall specify the amount of the Securities to be authenticated, the date on
which the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Exchange Securities or Private Exchange
Securities. The aggregate principal amount of Securities outstanding at any
time may not exceed $300,000,000 except as provided in Sections 2.08 and 2.09 of
this Indenture. Notwithstanding anything to the contrary in this Appendix or
otherwise in this Indenture, any issuance of Additional Securities after the
Closing Date shall be in a principal amount of at least $10,000,000, whether
such Additional Securities are of the same or a different series than the
Original Securities.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
---------------------- -----------------------------------
Securities. When Definitive Securities are presented to the Registrar with a
-----------
request:
(i) to register the transfer of such Definitive Securities; or
(ii) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
76
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
-------- -------
that the Definitive Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(2) in the case of Transfer Restricted Securities, are accompanied by
the following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse side of the Initial Security); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on the
reverse side of the Initial Security); or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act or in reliance upon another exemption from the
registration requirements of the Securities Act, (x) a certification
to that effect (in the form set forth on the reverse side of the
Initial Security) and (y) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in
Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
-------------------------------------------------------
Beneficial Interest in a Global Security. A Definitive Security may not be
-----------------------------------------
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side of the
Initial Security) that such Definitive Security is being transferred (1) to
a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the
Trustee a signed letter substantially in the form of Exhibit D or (3)
outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel
such Definitive Security and cause, or direct the Securities Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate
principal
77
amount of Securities represented by the Global Security to be increased by
the aggregate principal amount of the Definitive Security to be exchanged
and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4,
the Company shall issue and the Trustee shall authenticate, upon written
order of the Company in the form of an Officers' Certificate, a new Global
Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer
-------------------------------------------
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Security or
another Global Security and such account shall be credited in accordance with
such order with a beneficial interest in the applicable Global Security and the
account of the Person making the transfer shall be debited by an amount equal to
the beneficial interest in the Global Security being transferred. Transfers by
an owner of a beneficial interest in the Rule 144A Global Security or the IAI
Global Security to a transferee who takes delivery of such interest through the
Regulation S Global Security, whether before or after the expiration of the
Restricted Period, shall be made only upon receipt by the Trustee of a
certification in the form provided on the reverse of the Initial Securities from
the transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred shall be held immediately thereafter through Euroclear
or Clearstream. In the case of a transfer of a beneficial interest in either
the Regulation S Global Security or the Rule 144A Global Security for an
interest in the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such
interest is being transferred in an amount equal to the principal amount of
the interest to be so transferred, and the Registrar shall reflect on its
books and records the date and a corresponding decrease in the principal
amount of Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of the
Registered Exchange Offer or the effectiveness of the Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such
78
procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with Rule 144A, Regulation S or such other applicable exemption from
registration under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Restrictions on Transfer of Regulation S Global Security. (i)
---------------------------------------------------------
Prior to the expiration of the Restricted Period, interests in the Regulation S
Global Security may only be held through Euroclear or Clearstream. During the
Restricted Period, beneficial ownership interests in the Regulation S Global
Security may only be sold, pledged or transferred through Euroclear or
Clearstream in accordance with the Applicable Procedures and only (1) to the
Company, (2) so long as such security is eligible for resale pursuant to Rule
144A, to a person whom the selling holder reasonably believes is a QIB that
purchases for its own account or for the account of a QIB to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, (3) in an offshore transaction in accordance with Regulation S, (4)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, (5) to an IAI purchasing for
its own account, or for the account of such an IAI, in a minimum principal
amount of Securities of $250,000 or (6) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States. Prior to the
expiration of the Restricted Period, transfers by an owner of a beneficial
interest in the Regulation S Global Security to a transferee who takes delivery
of such interest through the Rule 144A Global Security or the IAI Global
Security shall be made only in accordance with Applicable Procedures and upon
receipt by the Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Initial Security
to the effect that such transfer is being made to (1) a QIB within the meaning
of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an
IAI purchasing for its own account, or for the account of such an IAI, in a
minimum principal amount of the Securities of $250,000. Such written
certification shall no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Security for an interest in the IAI Global Security, the transferee must
furnish a signed letter substantially in the form of Exhibit D to the Trustee.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Security shall be
transferable in accordance with applicable law and the other terms of this
Indenture.
(e) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form (each defined term in the legend being defined as such for purposes of
the legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED,
79
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such
80
Transfer Restricted Security for a Definitive Security that does not bear
the legends set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on Rule
144 (such certification to be in the form set forth on the reverse of the
Initial Security).
(iii) After a transfer of any Original or Additional Securities or
Private Exchange Securities during the period of the effectiveness of a
Shelf Registration Statement with respect to such Original or Additional
Securities or Private Exchange Securities, as the case may be, all
requirements pertaining to the Restricted Securities Legend on such
Original or Additional Securities or such Private Exchange Securities shall
cease to apply and the requirements that any such Original or Additional
Securities or such Private Exchange Securities be issued in global form
shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Original or Additional Securities pursuant to which Holders
of such Original or Additional Securities are offered Exchange Securities
in exchange for their Original or Additional Securities, all requirements
pertaining to Original or Additional Securities that Original or Additional
Securities be issued in global form shall continue to apply, and Exchange
Securities in global form without the Restricted Securities Legend shall be
available to Holders that exchange such Original or Additional Securities
in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Original or Additional Securities pursuant to which Holders of such
Original or Additional Securities are offered Private Exchange Securities
in exchange for their Original or Additional Securities, all requirements
pertaining to such Original or Additional Securities that Original or
Additional Securities be issued in global form shall continue to apply, and
Private Exchange Securities in global form with the Restricted Securities
Legend shall be available to Holders that exchange such Original or
Additional Securities in such Private Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Security acquired pursuant to Regulation S, all
requirements that such Initial Security bear the Restricted Securities
Legend shall cease to apply and the requirements requiring any such Initial
Security be issued in global form shall continue to apply.
(vii) Any Additional Securities sold in a registered offering shall
not be required to bear the Restricted Securities Legend.
(f) Cancelation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancelation or retained and canceled by the Trustee. At any time prior to such
cancelation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records
81
of the Trustee (if it is then the Securities Custodian for such Global Security)
with respect to such Global Security, by the Trustee or the Securities
Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
-----------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities and
Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchanges pursuant to Sections
2.07, 3.06, 4.06, 4.08 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected
by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may conclusively rely and shall be fully protected
in relying upon information furnished by the Depositary with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depositary participants,
82
members or beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Definitive Securities
---------------------
(a) A Global Security deposited with the Depositary or with the
Trustee as Securities Custodian pursuant to Section 2.1 or issued in connection
with a Registered Exchange Offer or Private Exchange shall be transferred to the
beneficial owners thereof in the form of Definitive Securities in an aggregate
principal amount equal to the principal amount of such Global Security, in
exchange for such Global Security, only if such transfer complies with Section
2.3 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a Depositary for such Global Security or if at any time the
Depositary ceases to be a "clearing agency" registered under the Exchange Act,
and a successor depositary is not appointed by the Company within 90 days of
such notice or after the Company becomes aware of such cessation, or (ii) an
Event of Default has occurred and is continuing or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depositary to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial Security in the form of a Definitive Security
delivered in exchange for an interest in the Global Security shall, except as
otherwise provided by Section 2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), 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.
(d) In the event of the occurrence of any of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of Definitive Securities in fully
registered form without interest coupons.
83
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S
84
UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Each Definitive Security shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
85
No. $__________
9 1/2% Senior Note due 2008
CUSIP No. ______
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation,
promises to pay to Cede & Co., or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global Security
attached hereto]/1/ on October 1, 2008.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
________________________
/1/ Use the Schedule of Increases and Decreases language if Note is in Global
Form.
86
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
The Kansas City Southern Railway Company,
by
____________________________________
Name:
Title:
by
____________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:_________________________
Authorized Signatory
--------------------------
*/ If the Security is to be issued in global form, add the Global Securities
-
Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
87
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 1/2% Senior Note due 2008
1. Interest
--------
(a) THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above. The Company shall pay interest semiannually on April 1 and October 1 of
each year. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from September 27, 2000 until the principal hereof is
due. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Liquidated Damages. The Holder of this Security is entitled to
------------------
the benefits of an Exchange and Registration Rights Agreement, dated as of
September 27, 2000, among the Company, Kansas City Southern Industries, Inc.
(the "Parent"), Kansas City Southern Lines, Inc., Gateway Eastern Railway
------
Company, Gateway Western Railway Company, Global Terminaling Services, Inc., KCS
Transportation Company, Mid-South Microwave, Inc., Xxxx-Xxxxxx Corporation,
Southern Development Company, Southern Industrial Services, Inc., and Trans-
Serve, Inc. (collectively, including the Parent, the "Note Guarantors") and the
Initial Purchasers named therein (the "Registration Agreement"). Capitalized
terms used in this paragraph (b) but not defined herein have the meanings
assigned to them in the Registration Agreement. If (i) the Shelf Registration
Statement or Exchange Offer Registration Statement, as applicable under the
Registration Agreement, is not filed with the Commission on or prior to 120 days
after the Issue Date, (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 180 days after the Issue Date (or, in the case of a Shelf Registration
Statement required to be filed in response to a change in law or the applicable
interpretations of the Commission's staff, if later, within 45 days after
publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 210 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of the Commission's staff, if later, within 45 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 60 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company shall pay
liquidated damages to each Holder of Transfer Restricted Securities, during the
period of such Registration Default, in an amount equal to $0.192 per week per
$1,000 principal amount of the Securities constituting Transfer Restricted
Securities held by such Holder until the applicable Registration Statement is
filed or declared effective, the Registered Exchange Offer is consummated or the
Shelf Registration Statement again becomes effective, as the case may be. All
accrued liquidated damages shall be paid to Holders in the same manner as
interest payments on the Securities on semi-annual payment dates which
correspond to
88
interest payment dates for the Securities. Following the cure of all
Registration Defaults, the accrual of liquidated damages shall cease. The
Trustee shall have no responsibility with respect to the determination of the
amount of any such liquidated damages. For purposes of the foregoing, "Transfer
Restricted Securities" means (i) each Initial Security until the date on which
such Initial Security has been exchanged for a freely transferable Exchange
Security in the Registered Exchange Offer, (ii) each Initial Security or Private
Exchange Security until the date on which such Initial Security or Private
Exchange Security has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement or (iii) each
Initial Security or Private Exchange Security until the date on which such
Initial Security or Private Exchange Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act.
2. Method of Payment
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders at the close of business on
the March 15 or September 15 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any,
liquidated damages, if any, and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium, if any, liquidated damages, if any, and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company or any successor depositary.
The Company will make all payments in respect of a certificated Security
(including principal, premium, if any, interest and liquidated damages, if any),
at the office of the Paying Agent, except that, at the option of the Company,
payment of interest or liquidated damages may be made by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
-------- -------
the Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Parent, the Company or
any of the Parent's domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent or Registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
September 27, 2000 (the "Indenture"), among the Company, the Note Guarantors
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in
------
89
effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all terms and provisions of the Indenture, and Holders
(as defined in the Indenture) are referred to the Indenture and the TIA for a
statement of such terms and provisions.
The Securities are senior unsecured obligations of the Company limited
to $300,000,000 in aggregate principal amount at any one time outstanding
(subject to Sections 2.08 and 2.09 of the Indenture). This Security is one of
the [Original/Additional] Securities referred to in the Indenture. The
Securities include the Original Securities, the Additional Securities and any
Exchange Securities and Private Exchange Securities issued in exchange for
Initial Securities pursuant to the Indenture. The Original Securities, the
Additional Securities and any Exchange Securities and Private Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on the ability of the Parent, the Company
and the Parent's Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make asset sales. The Indenture also imposes limitations on the ability of the
Parent, the Company and each Note Guarantor to consolidate or merge with or into
any other Person or convey, transfer or lease all or substantially all its
property.
To guarantee the due and punctual payment of the principal, interest
and liquidated damages, if any, on the Securities and all other amounts payable
by the Company under the Indenture and the Securities when and as the same shall
be due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Note Guarantors have
jointly and severally unconditionally guaranteed the Guaranteed Obligations on a
senior basis pursuant to the terms of the Indenture.
5. Optional Redemption
-------------------
Except as set forth in this paragraph, the Company may not redeem the
Securities. Prior to October 1, 2003, the Company may, on one or more
occasions, redeem up to a maximum of 35% of the original aggregate principal
amount of the Securities (calculated giving effect to any issuance of Additional
Securities) with the Net Cash Proceeds of one or more Public Equity Offerings
(i) by the Company or (ii) by Parent to the extent the Net Cash Proceeds thereof
are contributed to the Company or used to purchase Capital Stock (other than
Disqualified Stock) of the Company from the Company, at a redemption price equal
to 109 1/2% of the principal amount thereof, plus accrued and unpaid interest
and liquidated damages, if any, thereon to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest and
liquidated damages, if any, due on the relevant interest payment date);
provided, however, that after giving effect to any such redemption, at least 65%
-------- -------
of the original aggregate principal amount of the Securities remains
outstanding. Any such redemption shall be made within 60 days of such Equity
Offering and must be made in accordance with the procedures set forth in the
Indenture.
6. Sinking Fund
------------
The Securities are not subject to any sinking fund.
90
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest and liquidated damages, if any, on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of Control and
----------------------------------------------------------------------------
Asset Dispositions
------------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and liquidated damages, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due and liquidated damages, if any, on
the relevant interest payment date that is on or prior to the date of purchase)
as provided in, and subject to the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Company will be
required to offer to purchase Securities upon the occurrence of certain events.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or to transfer or exchange any Securities for a period of 15 days prior to the
mailing of a notice of redemption of Securities.
10. Persons Deemed Owners
---------------------
Except as provided in paragraph 2 hereof, the registered Holder of
this Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
---------------
If money for the payment principal, interest or liquidated damages, if
any, remains unclaimed for two years, the Trustee and the Paying Agent shall pay
the money back to the Company at its written request unless an abandoned
property law designates another Person. After any such payment, Holders entitled
to the money must look to the Company
for payment as general creditors and the Trustee and the Paying Agent shall have
no further liability with respect to such monies.
12. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time may terminate some of or
all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of, and interest and liquidated damages, if any, on, the Securities
to redemption or maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any Holder
but with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities and (ii) any default may be
waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company , the
Note Guarantors and the Trustee may amend the Indenture or the Securities (i) to
cure any ambiguity, omission, defect or inconsistency; (ii) to comply with
Article 5 of the Indenture; (iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities; (iv) to add Note Guarantees
with respect to the Securities; (v) to secure the Securities; (vi) to add
additional covenants or to surrender rights and powers conferred on the Company;
(vii) to comply with the requirements of the SEC in order to effect or maintain
the qualification of the Indenture under the TIA; (viii) to make any change
that does not adversely affect the rights of any Holder; or (ix) to provide for
the issuance of the Exchange Securities, Private Exchange Securities or
Additional Securities.
14. Defaults and Remedies
---------------------
If an Event of Default occurs (other than an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company)
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs, the principal of and interest on all the Securities shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders. Under certain circumstances, the Holders of
a majority in principal amount of the outstanding Securities may rescind any
such acceleration with respect to the Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee indemnity or security satisfactory to it in its
reasonable discretion against any loss, liability or expense and certain other
conditions are complied with. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing,
(ii) Holders of at least 25% in principal
amount of the outstanding Securities have requested the Trustee in writing to
pursue the remedy, (iii) such Holders have offered the Trustee security or
indemnity satisfactory to it in its reasonable discretion against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Parent,
the Company or any Note Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
17. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITH
OUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
20. CUSIP Numbers
-------------
The Company has caused CUSIP numbers to be printed on the Securities
and has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Security.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
[_] has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] to the Registrar for registration in the name of the Holder,
without transfer; or
(3) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(4) [_] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(5) [_] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933 and such Security
shall be held immediately after the transfer through Euroclear or
Clearstream until the expiration of the Restricted Period (as
defined in the Indenture); or
(6) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
(7) [_] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof; provided, however, that if box
-------- -------
(5), (6) or (7) is checked, the Trustee may require, prior to registering
any such transfer of the Securities, such legal opinions, certifications
and other information as the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act of 1933.
________________________
Your Signature
Signature Guarantee:
Date: ___________________ __________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
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 "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, 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 Company 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.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of Control) of the
indenture, check the box:
Asset Disposition [_] Change of Control [_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the indenture, state the amount
($1,000 or an integral multiple thereof):
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. $__________
9 1/2% Senior Note due 2008
CUSIP No. ______
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation,
promises to pay to Cede & Co., or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global Security
attached hereto]/2/ on October 1, 2008.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
____________________
/2/ Use the Schedule of Increases and Decreases language if Note is in Global
Form.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
The Kansas City Southern Railway Company,
by
_________________________________________
Name:
Title:
by
_________________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
______________________________
Authorized Signatory
---------------
*/ If the Security is to be issued in global form, add the Global Securities
-
Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9 1/2% Senior Note due 2008
1. Interest.
--------
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
shall pay interest semiannually on April 1 and October 1 of each year. Interest
on the Securities shall accrue from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid or duly provided
for, from September 27, 2000 until the principal hereof is due. Interest shall
be computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders at the close of business on
the March 15 or September 15 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company or any successor depositary.
The Company will make all payments in respect of a certificated Security
(including principal, premium, if any, and interest), at the office of the
Paying Agent, except that, at the option of the Company, payment of interest may
be made by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
-------- -------
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
4. Indenture
---------
The Company issued the Securities under An Indenture dated as of
September 27, 2000 (the "Indenture"), among the Company, the Note Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture
-----
(the "TIA"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
terms and provisions of the Indenture, and Holders (as defined in the Indenture)
are referred to the Indenture and the TIA for a statement of such terms and
provisions.
The Securities are senior unsecured obligations of the Company limited
to $300,000,000 in aggregate principal amount at any one time outstanding
(subject to Sections 2.08 and 2.09 of the Indenture). This Security is one of
the Exchange Securities referred to in the Indenture. The Securities include the
Original Securities, the Additional Securities and any Exchange Securities and
Private Exchange Securities issued in exchange for Initial Securities pursuant
to the Indenture. The Original Securities, the Additional Securities and the
Exchange Securities and the Private Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Parent, the Company and the Parent's
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell
shares of capital stock of such Restricted Subsidiaries, enter into or permit
certain transactions with Affiliates, create or incur Liens and make Asset
Sales. The Indenture also imposes limitations on the ability of the Parent, the
Company and each Note Guarantor to consolidate or merge with or into any other
Person or convey, transfer or lease all or substantially all of its property.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Note Guarantors have, jointly and
severally, unconditionally guaranteed the Guaranteed Obligations on a senior
basis pursuant to the terms of the Indenture.
5. Optional Redemption
-------------------
Except as set forth in this paragraph, the Company may not redeem the
Securities. Prior to October 1, 2003, the Company may, on one or more occasions,
redeem up to a maximum of 35% of the original aggregate principal amount of the
Securities (calculated giving effect to any issuance of Additional Securities)
with the Net Cash Proceeds of one or more Equity Offerings (i) by the Company or
(ii) by Parent to the extent the Net Cash Proceeds thereof are contributed to
the Company or used to purchase Capital Stock (other than Disqualified Stock) of
the Company from the Company, at a redemption price equal to 109 1/2% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages thereon, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that after giving effect to any such
-------- -------
redemption, at least 65% of the original aggregate principal amount of the
Securities remains outstanding. Any such redemption shall be made within 60 days
of such Equity Offering and must be made in accordance with the procedures set
forth in the Indenture.
6. Sinking Fund
------------
The Securities are not subject to any sinking fund.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest and liquidated damages, if any, on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of Control and
----------------------------------------------------------------------------
Asset Dispositions
------------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest and liquidated damages, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Company will be
required to offer to purchase Securities upon the occurrence of certain events.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or to transfer or exchange any Securities for a period of 15 days prior to the
mailing of a notice of redemption of Securities or 15 days before an interest
payment date.
10. Persons Deemed Owners
---------------------
Except as provided in paragraph 2 hereof, the registered Holder of
this Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
to the Company for payment as general creditors and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.
12. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any Holder
but with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities and (ii) any default may be
waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company , the
Note Guarantors and the Trustee may amend the Indenture or the Securities (i) to
cure any ambiguity, omission, defect or inconsistency; (ii) to comply with
Article 5 of the Indenture; (iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities; (iv) to add Note Guarantees
with respect to the Securities; (v) to secure the Securities; (vi) to add
additional covenants or to surrender rights and powers conferred on the Company;
(vii) to comply with the requirements of the SEC in order to effect or maintain
the qualification of the Indenture under the TIA; (viii) to make any change
that does not adversely affect the rights of any Holder; or (ix) to provide for
the issuance of the Exchange Securities, Private Exchange Securities or
Additional Securities.
14. Defaults and Remedies
---------------------
If an Event of Default occurs (other than an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company)
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs, the principal of and interest on all the Securities shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders. Under certain circumstances, the Holders of
a majority in principal amount of the outstanding Securities may rescind any
such acceleration with respect to the Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee shall be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee indemnity or security satisfactory to it in its
reasonable discretion against any loss, liability or expense and
certain other conditions are complied with. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to the Indenture or the Securities unless (i)
such Holder has previously given the Trustee notice that an Event of Default is
continuing, (ii) Holders of at least 25% in principal amount of the outstanding
Securities have requested the Trustee in writing to pursue the remedy, (iii)
such Holders have offered the Trustee security or indemnity satisfactory to it
in its reasonable discretion against any loss, liability or expense, (iv) the
Trustee has not complied with such request within 60 days after the receipt of
the request and the offer of security or indemnity and (v) the Holders of a
majority in principal amount of the outstanding Securities have not given the
Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, the Holders of a majority in principal amount
of the outstanding Securities are given the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Parent, the Company or its Affiliates and may otherwise deal with
the Parent, the Company or its Affiliates with the same rights it would have if
it were not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Parent,
the Company or any Note Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
17. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITH OUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
-------------
The Company has caused CUSIP numbers to be printed on the Securities
and has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Disposition [_] Change of Control [_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
($1,000 or an integral multiple thereof):
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a participant in a recognized
signature guaranty medallion program or other signature guarantor
acceptable to the Trustee.
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].The
following increases or decreases in this Global Security have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of , among [GUARANTOR] (the "New
Guarantor"), a subsidiary of THE KANSAS CITY SOUTHERN RAILWAY
COMPANY (or its successor), a Missouri corporation (the
"Company"), KANSAS CITY SOUTHERN INDUSTRIES, INC., GATEWAY
EASTERN RAILWAY COMPANY, GATEWAY WESTERN RAILWAY COMPANY, GLOBAL
TERMINALING SERVICES, INC., KCS TRANSPORTATION COMPANY, MID-SOUTH
MICROWAVE, INC., XXXX-XXXXXX CORPORATION, SOUTHERN DEVELOPMENT
COMPANY, SOUTHERN INDUSTRIAL SERVICES, INC., AND TRANS-SERVE,
INC., [OTHER EXISTING GUARANTORS] and THE BANK OF NEW YORK, a New
York banking corporation, as trustee under the indenture referred
to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company and [OLD GUARANTORS] (the "Existing Guarantors")
has heretofore executed and delivered to the Trustee an Indenture (the
"Indenture") dated as of September 27, 2000 , providing for the issuance of an
aggregate principal amount of up to $300,000,000 of 9 1/2% Senior Notes due 2008
(the "Securities");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Company's obligations under
the Securities pursuant to a Note Guarantee on the terms and conditions set
forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and the Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
-----------------------
and severally with all the Existing Guarantors, to unconditionally guarantee the
Company's obligations under the Securities on the terms and subject to the
conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture and the Securities.
2. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
----------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
--------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
--------------------------------
representation as to the validity or sufficiency of this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of this
-------------
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. Effect of Headings. The Section headings herein are for
-------------------
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
By_________________________________
Name:
Title:
THE KANSAS SOUTHERN RAILWAY COMPANY,
By_________________________________
Name:
Title:
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
By_________________________________
Name:
Title:
GATEWAY EASTERN RAILWAY COMPANY,
By____________________________
Name:
Title:
GATEWAY WESTERN RAILWAY COMPANY,
By____________________________
Name:
Title:
GLOBAL TERMINALING SERVICES, INC.,
By____________________________
Name:
Title:
KCS TRANSPORTATION COMPANY
By____________________________
Name:
Title:
MID-SOUTH MICROWAVE, INC.,
By____________________________
Name:
Title:
XXXX-XXXXXX CORPORATION,
By____________________________
Name:
Title:
SOUTHERN DEVELOPMENT COMPANY,
By____________________________
Name:
Title:
SOUTHERN INDUSTRIAL SERVICES, INC.,
By____________________________
Name:
Title:
TRANS-SERVE, INC.,
By____________________________
Name:
Title:
[OTHER EXISTING GUARANTORS],
By____________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
By____________________________
Name:
Title:
EXHIBIT D
Form of
Transferee Letter of Representation
The Kansas City Southern Railway Company
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 9 1/2% Senior Notes due 2008 (the "Securities") of The Kansas City
Southern Railway Company (the "Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:________________________
Address:_____________________
Taxpayer ID Number:__________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act that is purchasing for its own account or
for the account of such an institutional "accredited investor," in each case in
a minimum principal amount of Securities of $250,000, or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause (d), (e) or
(f) above to require the delivery of an opinion of counsel, certifications or
other information satisfactory to the Company and the Trustee.
TRANSFEREE:___________________,
by:___________________________
