Exhibit 4.2
EXECUTION COPY
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The Kansas City Southern Railway Company,
Issuer
and
U.S. Bank National Association,
Trustee
-------------------
Indenture
Dated as of May 30, 2008
-------------------
8.0% Senior Notes due 2015
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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
SECTION 2.01 Amount of
Securities; Issuable in Series........................22
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..........................................26
SECTION 2.10 Temporary
Securities............................................27
SECTION 2.11
Cancellation....................................................27
SECTION 2.12 Defaulted
Interest..............................................27
SECTION 2.13 CUSIP
Numbers...................................................27
ARTICLE 3
REDEMPTION
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
ARTICLE 4
COVENANTS
SECTION 4.01 Payment
of Securities...........................................29
<PAGE>
SECTION 4.02 SEC
Reports.....................................................30
SECTION 4.03
Limitation on
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......................40
SECTION 4.08 Change of
Control...............................................41
SECTION 4.09
Compliance
Certificate..........................................42
SECTION 4. 10 Further
Instruments and Acts...................................42
SECTION 4.11 Future
Note Guarantors..........................................42
SECTION 4.12
Limitation on Lines of
Business.................................43
SECTION 4.13
Limitation on
Liens.............................................43
SECTION 4.14
Limitation on Sale/Leaseback
Transactions.......................43
SECTION 4.15 Covenant
Suspension.............................................44
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 When
Company May Merge or Transfer Assets
.......................................................44
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of
Default
..............................................................................46
SECTION 6.02
Acceleration
..............................................................................47
SECTION 6.03 Other
Remedies
..............................................................................48
SECTION 6.04 Waiver of
Past Defaults
.........................................................................48
SECTION 6.05 Control
by Majority
.............................................................................48
SECTION 6.06
Limitation on Suits
.............................................................................48
SECTION 6.07 Rights of
Holders to Receive Payment
............................................................49
SECTION 6.08
Collection Suit by Trustee
......................................................................49
SECTION 6.09 Trustee
May File Proofs of Claim
................................................................49
SECTION 6.10
Priorities
..............................................................................49
SECTION 6.11
Undertaking for Costs
...........................................................................50
SECTION 6.12 Waiver of
Stay or Extension Laws
................................................................50
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of
Trustee
..............................................................................50
SECTION 7.02 Rights of
Trustee
..............................................................................51
SECTION 7.03
Individual Rights of Trustee
....................................................................52
SECTION 7.04 Trustee's
Disclaimer
............................................................................52
SECTION 7.05 Notice of
Defaults
..............................................................................53
<PAGE>
SECTION 7.06 Reports
by Trustee to Holders
....................................................................53
SECTION 7.07
Compensation and Indemnity
.......................................................................53
SECTION 7.08
Replacement of Trustee
...........................................................................54
SECTION 7.09 Successor
Trustee by Merger
......................................................................55
SECTION 7.10
Eligibility; Disqualification
....................................................................55
SECTION 7.11
Preferential Collection of Claims Against Company
................................................55
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Discharge
of Liability on Securities; Defeasance
.................................................55
SECTION 8.02
Conditions to Defeasance
.........................................................................57
SECTION 8.03
Application of Trust Money
.......................................................................58
SECTION 8.04 Repayment
to Company
.............................................................................58
SECTION 8.05 Indemnity
for Government Obligations
.............................................................58
SECTION 8.06
Reinstatement
..............................................................................58
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without
Consent of Holders
.......................................................................59
SECTION 9.02 With
Consent of Holders
..........................................................................59
SECTION 9.03
Compliance with Trust Indenture Act
..............................................................60
SECTION 9.04
Revocation and Effect of Consents and Waivers
....................................................60
SECTION 9.05 Notation
on or Exchange of Securities
............................................................61
SECTION 9.06 Trustee
to Sign Amendments
.......................................................................61
SECTION 9.07 Payment
for Consent
..............................................................................61
ARTICLE 10
NOTE GUARANTEES
SECTION 10.01 Note
Guarantees
..............................................................................61
SECTION 10.02
Limitation on Liability
.........................................................................63
SECTION 10.03
Successors and Assigns
..........................................................................64
SECTION 10.04 No
Waiver
..............................................................................64
SECTION 10.05
Modification
..............................................................................64
SECTION 10.06
Execution of Supplemental Indenture for Future Note Guarantors
..................................64
SECTION 10.07
Non-Impairment
..............................................................................65
ARTICLE I
I
MISCELLANEOUS
SECTION 11.01 Trust
Indenture Act Controls
....................................................................65
SECTION 11.02
Notices
..............................................................................65
<PAGE>
SECTION 11.03
Communication by Holders with Other Holders
.....................................................66
SECTION 11.04
Certificate and Opinion as to Conditions Precedent
..............................................66
SECTION 11.05
Statements Required in Certificate or Opinion
...................................................66
SECTION 11.06 When
Securities Disregarded
.....................................................................66
SECTION 11.07 Rules by
Trustee, Paying Agent and Registrar
....................................................67
SECTION 11.08 Legal
Holidays
..............................................................................67
SECTION 11.09
GOVERNING LAW
..............................................................................67
SECTION 11.10 No
Recourse Against Others
......................................................................67
SECTION 11.11
Successors
..............................................................................67
SECTION 11.12 Multiple
Originals
..............................................................................67
SECTION 11.13 Table of
Contents; Headings
.....................................................................67
Appendix A
- Provisions
Relating to Original Securities and Additional
Securities
Exhibit A - Form of Security
Exhibit B - Form of Supplemental
Indenture
Exhibit C - Form of Note Guarantee
<PAGE>
INDENTURE dated as of May 30, 2008, among The Kansas City Southern
Railway
Company, a Missouri
corporation
(the "Company"), Kansas City Southern (the
"Parent"), Gateway
Eastern Railway Company, PABTEX GP, LLC, PABTEX I, L.P., SIS
Bulk Holding, Inc., Southern Development Company, Southern Industrial Services,
Inc., and Trans-Serve, Inc. (collectively, including the Parent, the "Note
Guarantors") and U.S. Bank National Association, a national banking
association,
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 8.0% Senior
Notes due 2015 issued on the date hereof (the "Original
Securities") and (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 "Securities").
Except as otherwise
provided herein, the Securities will be
unlimited in aggregate
principal amount
outstanding, of which
$275,000,000 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 an unlimited aggregate principal amount of Additional
Securities.
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.
"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) additional Capital
Stock of a
Restricted
Subsidiary
that is not a Wholly Owned Restricted
Subsidiary; provided,
however, that any such Restricted Subsidiary described in
clauses (b) or (c) above is primarily engaged in a Permitted
Business.
"Additional
Securities" means an unlimited aggregate principal amount of
8.0% Senior Notes due 2015 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
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.
"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,
<PAGE>
other than, in the case of (a), (b) or (c) above,
(i) disposition
by a Restricted
Subsidiary to the
Parent or by
the Parent or a Restricted Subsidiary to a Wholly Owned Restricted
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 $5,000,000,
(iv) any exchange of
like property
pursuant to Section
1031 of
the Code for use in a Permitted Business,
(v) Permitted Property Swaps, and
(vi) sales or dispositions of obsolete locomotives, rolling
stock
and other equipment.
"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.
"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 other than a Saturday, Sunday or
other day on
which banking
institutions are not
required by law or regulation to be open in
the State of New York.
"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.
"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 May 27, 2008 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
2
<PAGE>
still in office who are members of such board on May 27, 2008 (or whose
election or nomination has been approved as provided in this clause
(a));
(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 the Parent 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 or the Company with or
into
another Person or the merger of another Person with or into the
Parent
or
the Company, or the
sale of all or substantially all the assets of the
Parent or the Company
to another Person, and, in the case of any such
merger or
consolidation, the
securities of the Parent or the Company that
are
outstanding
immediately prior to
such transaction and
that represent
100%
of the aggregate voting power of the Voting Stock of the Parent or
the
Company 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
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 prior to the date of such determination
for which financial
information
is publicly available to (b) Consolidated
Interest Expense for such four fiscal quarters; provided, however,
that:
(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
3
<PAGE>
period and as if the Parent or such Restricted Subsidiary had 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
(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
or other Investment,
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
during such
period). 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 that 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.
4
<PAGE>
"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 Consolidated Restricted 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, (c) capitalized interest,
(d)
commissions, discounts
and other fees and
charges attributable
to letters of
credit and
bankers' acceptance financing, (e) interest accruing on any
Indebtedness of any
other Person to the extent such Indebtedness is Guaranteed
by the Parent or any Restricted Subsidiary, (f) net costs or benefit
associated
with Interest Rate Agreements, and (g) dividends in respect of
all Disqualified
Stock of the
Parent or the Company and all Preferred Stock of any of the
Restricted
Subsidiaries of the
Parent (other than the Company), to the extent
held by Persons other than the Parent or a Wholly Owned
Restricted
Subsidiary;
provided, however,
that Consolidated Interest Expense shall exclude (A) the
interest expense of any Restricted Subsidiary in the same proportion
as the net
income of that Restricted Subsidiary is excluded from
Consolidated Net
Income,
and (B) any amounts related to amortization of costs associated
with issuance of
Indebtedness.
"Consolidated Net
Income" means,
for any period, the net income of the
Parent and its
Consolidated
Subsidiaries for such period; provided, however,
that there shall not be included in such Consolidated Net
Income:
(a)
any net income of any
Person (other than the Parent) if such
Person is not a Restricted Subsidiary, except that, subject to the
limitations contained
in clause (c) below
and to the extent not
already
included, (A) 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 (b) below), and (B) the amounts so
included shall be decreased by the amount of the Parent or such
Restricted
Subsidiary's equity in a net loss of any such Person for such
period to the
extent that Parent or Restricted Subsidiary has funded such
loss;
(b) any net income of
any Restricted
Subsidiary
that is not a Note
Guarantor other than the Company, 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 subject to the limitations contained in clause (c)
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 that could be 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);
(c) any gain or loss
realized upon the sale or other disposition of
any
asset of the Parent or its Consolidated Subsidiaries (including
pursuant to any
Sale/Leaseback
Transaction) that is not sold or otherwise
disposed of in the
ordinary course of business and any gain or loss
realized upon the sale
or other disposition
of any Capital
Stock of any
Person;
(d) any extraordinary gain or loss; and
(e) the cumulative effect of a change in accounting principles.
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
5
<PAGE>
such dividends,
repayments
or transfers increase the amount of Restricted
Payments permitted under such Section pursuant to clause (a)(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) that 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;
(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) 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.
"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
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Parent or any Restricted Subsidiary in an Unrestricted
Subsidiary will be
accounted for as an
investment.
The term "Consolidated" has a correlative
meaning.
"Credit Agreement"
means the Credit
Agreement dated as of April 28, 2006,
among the Parent, the
Company, the
subsidiary guarantors
named therein,
the
lenders party thereto,
and The Bank of Nova Scotia, as Administrative Agent and
Collateral Agent, as amended by amendment No. 1 thereto dated as of
May 31, 2007
and as further 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 (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 this
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 that is, or
after notice or
passage of time or
both would be, an Event of Default.
"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 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 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.
6
<PAGE>
"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,
(d) amortization
expense of the Parent and its Consolidated Restricted
Subsidiaries, and (e)
any fees and expenses,
or any amortization or
write-off
thereof, incurred
in connection with any acquisition, investment, asset
disposition, issuance or repayment, defeasance or discharge of
debt, issuance of
equity securities,
refinancing
transaction
(including
the termination of
existing Interest Rate Agreements in connection therewith) or
amendment or other
modification of any debt instrument, and any charges incurred as a
result of any
such transaction.
Notwithstanding the foregoing, if any part of the net income
of any Restricted Subsidiary was required to be excluded from the
calculation of
Consolidated Net
Income, the items
referred to in the
foregoing clauses (a)
through (e) in respect of such Restricted Subsidiary shall be
included in EBITDA
in the same proportion
as the net
income of such
Restricted
Subsidiary
was
included in calculating Consolidated Net Income.
"Equity Offering"
means an underwritten
primary public offering of common
stock of the
Parent or the Company pursuant to an effective registration
statement under the
Securities
Act or a bona fide
private placement of the
common stock of the Parent or the Company on arm's-length
terms to
unaffiliated
third parties.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"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
Restricted Subsidiary
of the Parent or (y) an employee stock ownership plan or
other trust established by the Parent or any of its Restricted
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)(3).
"Fair Market Value" means, with respect to any asset or property,
the price
that 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.
"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. All ratios and
computations based on
GAAP contained
in this Indenture shall be computed in
conformity with GAAP.
"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
7
<PAGE>
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
"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.
"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 Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred
by such Person
at the time it becomes a Restricted 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:
(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 twelve
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
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) Interest Rate Agreements 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.
8
<PAGE>
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 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) (1) in the case of a
Restricted
Subsidiary being
designated an
Unrestricted
Subsidiary,
"Investment"
shall
include the portion of
the Fair Market Value
of such Subsidiary's
net assets
which is proportionate
to the Parent's equity interest in such Subsidiary, and
(2) in the case of an
Unrestricted
Subsidiary being
designated
a Restricted
Subsidiary, "Investment" shall include the lesser of (i) the
Parent's Investment
in such Subsidiary at the time of such designation, and (ii) the portion of the
Fair Market Value of such Subsidiary's net assets which is
proportionate to the
Parent's equity interest in such Subsidiary; 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 Moody's Investors Service, Inc. or BBB- (or the
equivalent)
by Standard & Poor's Ratings Group, Inc.
"Issue Date", with
respect to any Securities, means the date on which the
Securities are originally issued.
"KCSM" means
Kansas City Southern de Mexico, S.A. de C.V., a sociedad
anonima de capital
variable organized under the laws of the United Mexican
States.
"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).
"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 noncash 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 that
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
9
<PAGE>
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 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 or the Company. "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, a Delaware corporation, until a
successor replaces it and, thereafter, means such successor.
"Permitted Business"
means any business engaged in by the Parent or
any
Restricted Subsidiary
on the Closing Date or such date as any Person becomes a
Restricted Subsidiary,
and any business
related, ancillary or complementary
thereto.
"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 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;
(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 $5 million in the aggregate outstanding at any one
time; (g) Stock
Purchase Loans not exceeding $3 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 noncash
portion of the
consideration
received for an Asset
Disposition that was
made pursuant to and
in compliance
with Section 4.06; (j) The Panama Canal Railway Company; provided,
however, that
the aggregate amount
of all such
Investments in Panama
Canal Railway
Company
made after the Closing
Date and at any time
outstanding
shall not exceed
$15
million; (k) any
company that is engaged in the same line
of business as
10
<PAGE>
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
made after the Closing
Date and at any time
outstanding
shall not exceed
$25
million; (l) Southern Capital LLC or a similar joint venture;
provided, however,
that the aggregate
amount of all such
Investments in
Southern Capital LLC
or
other joint
venture made after the Closing
Date and at any time
outstanding
shall not exceed $50
million, not more than
$10 million of which
shall be for
purposes other than
rehabilitation
of locomotives and rolling stock; (m)
Permitted Property Swaps; or (n) KCSM and its Subsidiaries;
provided, however,
that the aggregate
amount of all such
Investments in KCSM and its Subsidiaries
made after the Closing Date shall not exceed $50 million.
"Permitted Liens" means, with respect to any Person:
(a) (i) Liens to secure Indebtedness permitted pursuant to clauses
(b)(i) and (b)(vi) of
Section 4.03 and (ii)
Liens to secure
Indebtedness
(other than Indebtedness described in clause (b)(ii) of
Section 4.03) such
that
the maximum principal
amount of such
Indebtedness,
as of any date,
after giving effect to the Incurrence of such Indebtedness and application
of
proceeds therefrom on such date, would not cause the Secured
Indebtedness Leverage Ratio to be greater than 3.0 to 1.0;
(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) that 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;
(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 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
11
<PAGE>
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 (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 180
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(h);
(j) Liens securing
Indebtedness or other
obligations of a Subsidiary
of
such Person owing to such Person or a Wholly Owned Restricted
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 business;
(l) Liens securing
obligations under Interest Rate Agreements so long
as
such obligations
relate to Indebtedness that is, and is permitted under
this
Indenture to be, secured by a Lien on the same property
securing such
obligations;
(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 (a), (f), (g) and (h); provided, however,
that:
(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 Indebtedness
secured by Liens
described under
clauses (a), (f), (g) or (h) at the
time the 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; and
(n) Liens to
secure Indebtedness permitted under this Indenture
Incurred to fund or
refinance the reconstruction of the line between
Victoria and
Rosenberg,
Texas, so long as the amount of outstanding
Indebtedness secured
by Liens pursuant to
this clause (n) does not exceed
$150
million.
"Permitted Property Swap" means a swap of locomotives, rolling
stock, track
materials or real
property (including
any fixtures or
improvements
thereon)
where the Fair Market Value of the locomotives, rolling stock, track
materials,
real property
(including
any fixtures or improvements thereon) or other
consideration received
is at least equal to the Fair Market Value of the
locomotives, rolling
stock, track materials, real property (including any
fixtures or improvements thereon) or other consideration
transferred,
in each
case, as such Fair
Market Value is
determined in good
faith by a
responsible
financial or accounting Officer of the Parent.
12
<PAGE>
"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 that 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
is incurred
within 180 days after the acquisition by the Parent or such
Restricted Subsidiary of such asset.
"Rating Agency" means
each of Standard & Poor's Ratings Group, Inc. and
Moody's Investors
Service, Inc. or if
either of the foregoing 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
which
shall be substituted
for Standard & Poor's Ratings Group, Inc. or Moody's
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)
including any
premiums, accrued interest, fees and expenses
related to such
refinancing,
replacement, renewal,
repayment or extension;
provided, however,
that (a) the Refinancing Indebtedness has a Stated
Maturity
no earlier than the earlier of (1) the Stated Maturity of the
Indebtedness being
Refinanced and
(2) the first anniversary of the Stated Maturity of the
Securities, (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 discount,
the
aggregate accreted
value) then outstanding of the Indebtedness being Refinanced
plus any premiums, accrued interest, fees and expenses related to such
refinancing,
replacement, renewal,
repayment or extension, 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 is not a Note
Guarantor and that
Refinances
Indebtedness of the Company or (ii) Indebtedness of the Parent or
a
Restricted
Subsidiary that
Refinances
Indebtedness
of an Unrestricted
Subsidiary.
"Restricted
Subsidiary" means the
Company and any other Subsidiary of the
Parent other than an Unrestricted Subsidiary.
13
<PAGE>
"Sale/Leaseback
Transaction" means an
arrangement entered
into after the
Closing Date 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 Restricted
Subsidiary or between
Wholly Owned
Restricted
Subsidiaries.
Notwithstanding the
preceding sentence, any such arrangement that would
otherwise be included in this definition of a Sale/Leaseback
Transaction that is
concluded within 180
days following the date of the acquisition of the property
being transferred shall not be considered a Sale/Leaseback
Transaction.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means Indebtedness of the Company secured by
a Lien.
"Secured Indebtedness
Leverage Ratio",
as of any date of
determination,
means the ratio of (i) any Indebtedness secured by a Lien to (ii) the
aggregate
amount of EBITDA for
the period of the most
recent four consecutive fiscal
quarters ending prior to such date for which financial information is publicly
available.
"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 fees and other amounts owing in respect of,
the Credit
Agreement 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, as
applicable; provided,
however, that Senior Indebtedness of
the
Company or any Note
Guarantor 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,
as applicable, (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, as
applicable (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, as applicable, including any
Subordinated
Obligations of the Company or such Note Guarantor, as applicable,
(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.
"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 issuer 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.
14
<PAGE>
"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 or membership
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 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 Moody's Investors
Services, Inc. or "A-1
" (or higher)
according to Standard and Poor's Ratings
Services, a
division of The McGraw-Hill 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
Moody's Investors
Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb)
as in effect on the Closing Date.
"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.
15
<PAGE>
"Unrestricted
Subsidiary" means KCSM
and each of its Subsidiaries and (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 assets
consolidated with
those
of its subsidiaries in
accordance with GAAP
consistently applied
of $1,000 or
less or (ii) if such
Subsidiary has
assets consolidated with those of its
subsidiaries in accordance with GAAP consistently applied greater than $1,000,
then such designation
would be permitted under Section 4.04. The Board of
Directors may
designate KCSM or any other 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 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 or
membership 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 Restricted 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 Restricted
Subsidiary.
SECTION 1.02 Other Definitions.
Defined in
Term
Section
----
----------
"Affiliate Transaction"..................................
4.07(a)
"Bankruptcy Law".........................................
6.01
"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
"Global Securities"......................................
Appendix A
"Guaranteed Obligations".................................
10.01
"incorporated provision".................................
11.01
"legal defeasance option"................................
8.01(b)
"Legal Holiday"..........................................
11.08
"Notice of Default"......................................
6.01
"Offer"..................................................
4.06(b)
16
<PAGE>
"Offer Amount"...........................................
4.06(c)(ii)
"Offer Period"...........................................
4.06(c)(ii)
"Paying Agent"...........................................
2.04
"protected purchaser"....................................
2.08
"Purchase Date"..........................................
4.06(c)(i)
"Registrar"..............................................
2.04(a)
"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 in 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 non-interest 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
(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.
17
<PAGE>
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 unlimited. 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 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; and
(3) 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 registered, in the name
or names
of
Persons other than the depositary for such Global Security or a nominee
thereof.
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 Securities
are set
forth in the Appendix, which is hereby incorporated in and
expressly made a part
of this Indenture. The
Securities, including
any Additional Securities issued,
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 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.
18
<PAGE>
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
signs the certificate of authentication on the Security by manual
signature. 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 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
Restricted
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. On or prior to each due
date of the principal of and interest on any Security, the Company
shall deposit
with the Paying Agent (or if the Company or a Wholly Owned
Restricted 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 and interest
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 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
19
<PAGE>
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 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 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
20
<PAGE>
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 cancelled by it,
those delivered to it
for cancellation
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
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
Cancellation. The
Company at any time may deliver Securities
to the Trustee
for cancellation. The Registrar and the Paying Agent shall
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
cancellation and shall
dispose of cancelled
Securities in accordance with its
customary procedures
or deliver cancelled 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
cancellation. The
Trustee shall not authenticate Securities in place of
cancelled 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
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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
cancelled 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. 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;
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(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 and unpaid interest 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 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.
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 Restricted
Subsidiary is
the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the
redemption price of
and accrued interest
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
cancellation. 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 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 on the Securities on the dates and in the
manner
provided in the Securities and in this Indenture. Principal and interest 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.
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SECTION 4.02 SEC Reports. At all times from and after the
Closing Date,
whether or not the Parent is then required to file reports with the
Commission,
for so long as any
Securities are
outstanding, the
Parent shall file with the
Commission all such reports and other information when and as the Parent would
be required to file
with the Commission
by Sections
13(a) or 15(d) under
the
Exchange Act if the Parent were subject thereto, unless the Commission does not
permit such filings,
in which case the
Parent shall
provide such reports
and
other information
to the Trustee
(within the same time
periods that would
be
applicable if the
Parent were required
and permitted to file
reports with the
Commission) and instruct the Trustee to mail such reports and other
information
to Holders at their addresses set forth on the Securities
Register. The Parent
shall supply the
Trustee and each Holder or shall supply to the Trustee for
forwarding to each
such Holder, without
cost to such
Holder, copies of such
reports and other
information.
Notwithstanding the
foregoing, as long as
the
Parent is subject to
informational
requirements
of the Exchange Act and in
accordance therewith
files reports and other information with the Commission,
each Holder shall be
deemed to have been
supplied the
foregoing reports and
forms at the time such Holder may electronically access such reports and forms
by means of the Commission's homepage on the internet or at the Parent's
homepage on the internet. Notwithstanding any language in
this Section
