600 Peachtree Street,
N.E.
Suite 2700
Atlanta, Georgia
30308
The Kansas City
Southern Railway Company
427 West 12 th Street
Kansas City, Missouri 64105
Attention: Paul J. Weyandt
You
have advised The Bank of Nova Scotia (“ Scotia
”) regarding the desire of The Kansas City Southern Railway
Company, a Missouri corporation (the “Borrower
”), to amend and restate its existing $250 million
Credit Agreement dated as of March 30, 2004 (as amended by
(i) Amendment and Waiver No. 1 to the Credit Agreement
and Amendment No. 1 to the Security Agreement, dated as of
December 22, 2004, (ii) Amendment and Waiver No. 2
to the Credit Agreement, dated as of September 30, 2005,
(iii) Amendment No. 3 to the Credit Agreement, dated as
of November 4, 2005, (iv) Waiver No. 3 to the Credit
Agreement, dated as of December 8, 2005, and (v) Waiver
No. 4 to the Credit Agreement, dated as of March 1, 2006,
and as may be further amended or otherwise modified from time to
time, the “ Existing Credit Facility ”).
In order to amend and restate the Existing Credit Facility (the
“ Restatement ”) in its entirety, you
have requested that Scotia (a) provide you with its financing
commitment for the entire $371.2 million of Senior Bank
Financing (as hereinafter defined) described in this letter and in
the summary of certain terms and conditions attached hereto as
Exhibit A (the “ Summary of Terms ”
and, together with this letter, this “ Commitment
Letter ”) and (b) provide you with its best
efforts undertaking to arrange a syndicate (in such capacity, the
“ Lead Arranger ”) of Lenders (as defined
under the section “ Lenders ” in the
Summary of Terms) for the Senior Bank Financing.
We
understand that the funding required to effect the Restatement, to
pay the fees and expenses incurred in connection therewith and to
provide for the ongoing working capital and general corporate needs
of the Borrower (as defined in the Summary of Terms) and its
subsidiaries shall be provided from the incurrence by the Borrower
of the Senior Bank Financing.
We
further understand that the senior secured bank financing (the
“ Senior Bank Financing ”) will be in the
form of (i) a term loan facility in the amount of
$246.2 million (the “ Term Loan B Facility
”), and (ii) a revolving credit facility in the amount
of $125 million (the “ Revolving Credit
Facility ”, together with the Term Loan B Facility,
the “ Credit Facilities ”).
Scotia
is pleased to commit to provide, subject to and upon the terms and
conditions set forth herein and in the Summary of Terms, the entire
amount of (i) the Revolving Credit Facility and (ii) the Term
Loan B Facility, in each case, on the terms and conditions set
forth herein and in the Summary of Terms. It is understood that
(i) Scotia shall act as sole lead arranger and sole bookrunner
for the Senior Bank Financing (the “ Lead
Arranger ”) and (ii) Scotia will act as
administrative agent for the Senior Bank Financing. It is further
understood that the Lead Arranger shall be permitted to designate
(after
THE KANSAS CITY SOUTHERN RAILWAY
COMPANY
Commitment Letter
consultation
with and agreement of the Borrower, such agreement not to be
unreasonably withheld) one or more Lenders as agents or co-agents,
as the case may be, with respect to the Senior Bank Financing, and
that no titles may be given, or compensation paid, to Lenders
without the Lead Arranger’s consent.
The
Lead Arranger reserves the right, prior to or after execution of
the definitive credit documentation for the Senior Banking
Financing, to syndicate all or part of its commitments for the
Senior Bank Financing to one or more lending institutions of which
you shall approve, such approval not to be unreasonably withheld,
that will become parties to such definitive credit documentation
pursuant to a syndication to be managed by the Lead Arranger, and
the commitments of the Lead Arranger hereunder shall be reduced as
and when commitments are received from the Lenders as described in
the immediately preceding paragraph. The Lead Arranger shall
commence syndication efforts promptly after the execution of this
Commitment Letter by you and you agree actively to assist the Lead
Arranger in achieving a syndication that is satisfactory to the
Lead Arranger. To assist the Lead Arranger in its syndication
efforts, you hereby agree (a) to provide and cause your
advisors to provide the Lead Arranger and the other syndicate
members upon request with all information reasonably deemed
necessary by the Lead Arranger to complete syndication, including
but not limited to information and evaluations prepared by you and
your advisors or on your behalf relating to the transactions
contemplated hereby, (b) to assist the Lead Arranger upon
request in the preparation of an Information Memorandum to be used
in connection with the syndication of the Senior Bank Financing,
(c) to use your commercially reasonable efforts to ensure that
the syndication efforts of the Lead Arranger benefit materially
from your existing lending relationships, (d) to make
available your senior officers, representatives and advisors, in
each case from time to time, and to attend and make presentations
regarding the business and prospects of the Borrower at a meeting
or meetings of lenders or prospective lenders and (e) to make
available your senior officers and representatives in connection
with discussions with the rating agencies; subject, in each case,
to the agreement of the Lead Arranger and the other syndicate
members and their advisors to keep all non-public information
confidential as more fully set forth below. In addition, you agree
that no financing for the Borrower or any of its respective
subsidiaries or affiliates shall be syndicated, privately placed or
publicly offered to the extent that such financing could have an
adverse effect on the syndication of the Senior Bank
Financing.
Those
matters that are not covered or made clear herein or in the
attached Summary of Terms are subject to mutual agreement of the
parties. The terms and conditions of this commitment may be
modified only in writing. In addition, this commitment is subject
to (a) the preparation, execution and delivery of mutually
acceptable loan documentation, including a credit agreement
incorporating substantially the terms and conditions outlined
herein and in the Summary of Terms, and (b) the accuracy and
completeness in all material respects of all representations that
you make to us and all information that you furnish to us in
connection with this commitment and your compliance with the terms
of this Commitment Letter. The Lead Arranger’s commitment set
forth in this Commitment Letter will terminate on April 30,
2006, unless the Restatement closes on or before such date. The
Lead Arranger shall not be responsible or liable for any
consequential damages which may be alleged as a result of its
failure to provide the Senior Bank Financing.
To
induce the Lead Arranger to issue this Commitment Letter and to
continue with its due diligence efforts, you hereby agree that all
reasonable out-of-pocket fees and expenses (including the
reasonable fees and expenses of counsel and consultants) of the
Lead Arranger and its affiliates arising in connection with this
Commitment Letter (and its due diligence and syndication efforts in
connection herewith) and in connection with the Senior Bank
Financing and the other transactions described herein shall be for
your account, whether or not the Restatement is consummated, the
Senior Bank Financing is made available or definitive credit
documents are executed. In addition, you hereby agree to pay when
and as due the fees described in the fee letter (the “
Fee Letter ”) executed simultaneously herewith.
You further agree to indemnify and hold harmless each of the
Lenders (including, in any event, the Lead
THE KANSAS CITY SOUTHERN RAILWAY
COMPANY
Commitment Letter
Arranger) and
each director, officer, employee and affiliate thereof (each an
“ Indemnified Person ”) from and against
any and all actions, suits, proceedings (including any
investigations or inquiries), claims, losses, damages, liabilities
or expenses of any kind or nature whatsoever which may be incurred
by or asserted against or involve any such Indemnified Person as a
result of or arising out of or in any way related to or resulting
from this Commitment Letter, the Restatement or the extension or
syndication of the Senior Bank Financing contemplated by this
Commitment Letter, or in any way arise from any use or intended use
of this Commitment Letter or the proceeds of the Senior Bank
Financing contemplated by this Commitment Letter, and you agree to
reimburse each Indemnified Person upon demand for any reasonable
legal or other reasonable out-of-pocket expenses incurred in
connection with investigating, defending or preparing to defend any
such action, suit, proceeding (including any inquiry or
investigation) or claim (whether or not Scotia or any such other
Indemnified Person is a party to any action or proceeding out of
which any such expenses arise) (collectively, an “
Action ”); provided , however ,
that you shall not have to indemnify any Indemnified Person against
any loss, claim, damage, expense or liability to the extent finally
determined by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified
Person. This Commitment Letter is issued for your benefit only and
no other person or entity may rely hereon. Neither Scotia nor any
Lender shall be responsible or liable to the Borrower or any other
person for consequential damages that may be alleged as a result of
this Commitment Letter.
The
Lead Arranger reserves the right to employ the services of its
affiliates in providing services contemplated by this Commitment
Letter and to allocate, in whole or in part, to such affiliates
certain fees payable to the Lead Arranger in such manner as the
Lead Arranger and such affiliates may agree in their sole
discretion. Each of you acknowledges that the Lead Arranger may
share with any of its affiliates, and such affiliates may share
with the Lead Arranger, any information related to the Restatement,
the Borrower, any of its subsidiaries or affiliates or any of the
matters contemplated hereby in connection with the
Restatement.
The
provisions of the immediately preceding two paragraphs shall
survive any termination of this Commitment Letter.
You
represent and warrant that (a) all information that has been
or will hereafter be made available by or on behalf of you or by
any of your representatives in connection with the Restatement and
the other transactions contemplated hereby to the Lead Arranger or
any of its affiliates or representatives or to any Lender or any
potential Lender is and will be complete and correct in all
material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such
statements were or are made and (b) all financial projections,
if any, that have been or will be prepared by you or on your behalf
or by any of your representatives and made available to the Lead
Arranger or any of its affiliates or representatives or to any
Lender or any potential Lender in connection with the Restatement
and the other transactions contemplated hereby have been or will be
prepared in good faith based upon reasonable assumptions (it being
understood that such projections are subject to significant
uncertainties and contingencies, many of which are beyond your
control, and that no assurance can be given that any particular
projections will be realized). You agree to supplement the
information and projections from time to time so that the
representations and warranties contained in this paragraph remain
complete and correct in all material respects.
In
issuing these commitments, the Lead Arranger is relying on the
accuracy of the information furnished to it by you or on your
behalf or by or on behalf of the Borrower (collectively, the
“ Pre-Commitment Information ”). The
obligations of the Lead Arranger under this Commitment Letter and
of any Lender that issues a commitment for the Senior Bank
Financing are made solely for your benefit and may not be relied
upon or enforced by any other person or entity.
THE KANSAS CITY SOUTHERN RAILWAY
COMPANY
Commitment Letter
Scotia
hereby notifies you that pursuant to the requirements of the USA
Patriot Act, Title III of Pub. L. 107-56 (signed into law
October 26, 2001) (the “ Patriot Act
”), Scotia may be, and each Lender is, required to obtain,
verify and record information that identifies you, which
information includes the name, address, tax identification number
and other information regarding you that will allow Scotia or such
Lender to identify you in accordance with the Patriot Act. This
notice is given in accordance with the requirements of the Patriot
Act and is effective as to Scotia and each Lender.
You,
on behalf of yourself and your affiliates, acknowledge and agree
that in connection with all aspects of the transactions
contemplated by this Commitment Letter, you, Scotia, the Lenders,
and any affiliate through which any of them may be acting (each, a
“ Transaction Affiliate ”), have an
arm’s-length business relationship that creates no fiduciary
duty on the part of Scotia, any Lender or any other Transaction
Affiliate and each expressly disclaims any fiduciary
relationship.
You
acknowledge that Scotia and its affiliates may be providing debt
financing, equity capital or other services (including financial
advisory services) to other companies in respect of which you may
have conflicting interests regarding the transactions described
herein and otherwise. Neither we nor any of our affiliates will use
confidential information obtained from you by virtue of the
transactions contemplated by this Commitment Letter or our other
relationships with you in connection with the performance by us of
services for other companies, and we will not furnish any such
information to other companies. You also acknowledge that neither
we nor any of our affiliates has any obligation to use in
connection with the transactions contemplated by this Commitment
Letter, or to furnish to you, confidential information obtained by
us from other companies.
You
are not authorized to show or circulate this Commitment Letter to
any other person or entity (other than your legal and financial
advisors in connection with your evaluation hereof and except as
required by law or stock exchange requirements) until such time as
you have accepted this Commitment Letter as provided in the
immediately succeeding paragraph. The Lead Arranger, on behalf of
itself and its affiliates, hereby agrees that it will not disclose
to any person or entity any confidential, proprietary or non-public
information of Kansas City Southern, a Delaware corporation
(“ Holdings ”) and its subsidiaries
furnished to the Lead Arranger by the Borrower (such information
collectively, “ Company Information ”),
except that the Lead Arranger may disclose Company Information
(i) to its and its affiliates’ officers, directors,
employees, agents, accountants, attorneys, and other advisors
(collectively “ Lead Arranger Representatives
”) who have a need to know such Company Information for the
purpose of assisting in the negotiation and completion of the
Senior Bank Financing, (ii) to actual or potential Lenders who
have agreed to hold the Company Information in confidence on
substantially the same terms as provided herein, and (iii) to
the extent any portion of such Company Information (A) is or
becomes generally available to the public on a non-confidential
basis other than as a result of a breach of this paragraph by any
Lead Arranger or the Lead Arranger Representatives, (B) is or
becomes available to the Lead Arranger or any Lead Arranger
Representatives on a non-confidential basis from a source other
than the Borrower or (C) is required to be disclosed by law,
regulation or judicial order or is requested by any regulatory body
with jurisdiction over any Lead Arranger or a Lead Arranger
Representative. Notwithstanding anything to the contrary in this
Commitment Letter, the Lead Arranger’s obligations under this
paragraph shall terminate on the earlier of (i) the first
anniversary of the date of this Commitment Letter and (ii) if
definitive agreements are entered into for the Senior Bank
Financing, the date such definitive agreements are executed (in
which case the confidentiality obligations of the Lead Arranger
under this paragraph shall be superseded by the confidentiality
obligations in such definitive agreements).
If
this Commitment Letter is not accepted by you as provided in the
immediately succeed
|
