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CREDIT AGREEMENT
dated as of
January 11, 2000
among
KANSAS CITY SOUTHERN INDUSTRIES, INC.
THE KANSAS CITY SOUTHERN RAILWAY COMPANY
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent, Collateral Agent, Issuing Bank and
Swingline Lender
---------------------------
CHASE SECURITIES INC.,
as Advisor, Lead Arranger and Book Manager
==============================================================================
[CS&M 6701-034]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions; Construction
SECTION 1.01. Defined Terms..........................................1
SECTION 1.02. Classification of Loans and Borrowings................20
SECTION 1.03. Terms Generally.......................................20
SECTION 1.04. Accounting Terms; GAAP................................20
ARTICLE II
The Credits
SECTION 2.01. Commitments...........................................21
SECTION 2.02. Loans and Borrowings..................................21
SECTION 2.03. Requests for Borrowings...............................21
SECTION 2.04. Swingline Loans.......................................22
SECTION 2.05. Letters of Credit.....................................23
SECTION 2.06. Funding of Borrowings.................................26
SECTION 2.07. Interest Elections....................................27
SECTION 2.08. Termination and Reduction of
Commitments......................................28
SECTION 2.09. Repayment of Loans; Evidence of Debt..................28
SECTION 2.10. Amortization of Term Loans............................30
SECTION 2.11. Prepayment of Loans...................................31
SECTION 2.12. Fees..................................................32
SECTION 2.13. Interest..............................................33
SECTION 2.14. Alternate Rate of Interest............................34
SECTION 2.15. Increased Costs.......................................34
SECTION 2.16. Break Funding Payments................................35
SECTION 2.17. Taxes.................................................36
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs..............................36
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders.......................................38
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers..................................38
SECTION 3.02. Authorization; Enforceability.........................39
SECTION 3.03. Governmental Approvals; No Conflicts..................39
SECTION 3.04. Financial Condition; No Material Adverse
Change...........................................39
SECTION 3.05. Properties............................................40
SECTION 3.06. Litigation and Environmental Matters..................40
SECTION 3.07. Compliance with Laws and Agreements...................41
SECTION 3.08. Investment and Holding Company Status.................41
SECTION 3.09. Taxes.................................................41
SECTION 3.10. Employee Benefit Plans................................41
SECTION 3.11. Disclosure............................................41
SECTION 3.12. Subsidiaries..........................................41
SECTION 3.13. Insurance.............................................41
SECTION 3.14. Solvency..............................................41
SECTION 3.15. No Undisclosed Dividend Restrictions..................42
SECTION 3.16. Year 2000.............................................42
ARTICLE IV
Conditions
SECTION 4.01. Effective Date........................................42
SECTION 4.02. Each Credit Event.....................................45
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information......................................45
SECTION 5.02. Notices of Material Events............................46
SECTION 5.03. Information Regarding Collateral......................47
SECTION 5.04. Existence; Conduct of Business........................47
SECTION 5.05 Payment of Taxes.................................48
SECTION 5.06. Maintenance of Properties.............................48
SECTION 5.07. Insurance.............................................48
SECTION 5.08. Casualty and Condemnation.............................48
SECTION 5.09. Books and Records; Inspection and
Audit Rights.....................................48
SECTION 5.10. Compliance with Laws..................................48
SECTION 5.11. Use of Proceeds and Letters of Credit.................48
SECTION 5.12. Additional Subsidiaries...............................49
SECTION 5.13. Further Assurances....................................49
SECTION 5.14. Interest Rate Protection..............................49
SECTION 5.15. Completion of Spin-Off................................49
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities...............49
SECTION 6.02. Liens.................................................50
SECTION 6.03. Sale and Leaseback Transactions.......................52
SECTION 6.04. Mergers and Consolidations............................52
SECTION 6.05. Asset Sales...........................................52
SECTION 6.06. Transactions with Affiliates..........................53
SECTION 6.07. Certain Other Agreements.............................53
SECTION 6.08. Investments, Loans, Advances,
Guarantees and Acquisitions......................53
SECTION 6.09. Hedging Agreements....................................54
SECTION 6.10. Restricted Payments; Certain
Payments of Indebtedness.........................54
SECTION 6.11. Amendment of Material Documents.......................55
SECTION 6.12. Ownership of Caymex, NAFTA Rail and Grupo TFM.........55
SECTION 6.13. Interest Expense Coverage Ratio.......................55
SECTION 6.14. Leverage Ratio........................................55
SECTION 6.15. Capital Expenditures..................................56
ARTICLE VII
Events of Default..................................56
ARTICLE VIII
The Administrative Agent...........................58
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices...............................................60
SECTION 9.02. Waivers; Amendments...................................60
SECTION 9.03. Expenses; Indemnity; Damage Waiver....................62
SECTION 9.04. Successors and Assigns................................63
SECTION 9.05. Survival..............................................65
SECTION 9.06. Counterparts; Integration;
Effectiveness....................................65
SECTION 9.07. Severability..........................................66
SECTION 9.08. Right of Setoff.......................................66
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process............................66
SECTION 9.10. WAIVER OF JURY TRIAL..................................66
SECTION 9.11. Headings..............................................67
SECTION 9.12. Confidentiality.......................................67
SECTION 9.13. Interest Rate Limitation..............................67
SECTION 9.14. Release of Liens and Guarantees.......................68
SCHEDULES:
Schedule 1 -- Mortgaged Property
Schedule 2.01 -- Commitments
Schedule 3.05(b) -- Real Property
Schedule 3.05(c) -- Condemnation Proceedings
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.07 -- Restrictive Agreements
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Sonnenschein Nath & Rosenthal
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
CREDIT AGREEMENT dated as of January 11,
2000, among KANSAS CITY SOUTHERN INDUSTRIES, INC.,
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, the LENDERS
party hereto, and THE CHASE MANHATTAN BANK, as
Administrative Agent, Collateral Agent, Issuing Bank
and Swingline Lender.
Holdings (such term and each other capitalized term used but
not defined herein having the meaning given to it in Article I), intends to
complete the Spin-Off within 90 days of the date hereof. In connection with the
completion of the Spin-Off (a) the Borrower will borrow the Term Loans and not
more than $20,000,000 of Revolving Loans on the Effective Date, (b) the Borrower
will transfer the proceeds of the Term Loans and Revolving Loans made on the
Effective Date to Holdings by means of a dividend and/or the repayment of
intercompany debt, (c) Holdings will borrow $125,000,000 under the New Assumable
Facility, the obligations under such facility and the Existing Assumable
Facility will be assigned and delegated to and assumed by Stilwell and Holdings
will be released from all such obligations, (d) Holdings will pay all amounts
outstanding under and permanently terminate the Existing Credit Agreements and
(e) Holdings will complete the Debt Tender Offer and purchase the Existing Notes
tendered pursuant thereto.
The Borrower has requested the Lenders to extend credit in the
form of (a) Tranche A Term Loans on the Effective Date in an aggregate principal
amount not in excess of $150,000,000, (b) Tranche B Term Loans on the Effective
Date in an aggregate principal amount not in excess of $250,000,000, (c) Tranche
X Term Loans on the Effective Date in an aggregate principal amount not in
excess of $200,000,000 and (d) Revolving Loans, Swingline Loans and Letters of
Credit at any time and from time to time on or after the Effective Date and
prior to the Revolving Maturity Date in an aggregate principal amount at any
time outstanding not in excess of $150,000,000. The Borrower has requested the
Issuing Bank to issue Letters of Credit in an aggregate stated amount at any
time outstanding that will not result in the LC Exposure exceeding $90,000,000,
and has requested the Swingline Lender to make available Swingline Loans in an
aggregate principal amount at any time outstanding not in excess of $10,000,000.
The proceeds of the Term Loans and of Revolving Loans made on the Effective Date
are to be used solely (i) to pay amounts outstanding under the Existing Credit
Agreements and Existing Notes and to pay other Indebtedness, (ii) to pay Debt
Tender Premiums and (iii) to pay fees and expenses related to the Transactions.
The proceeds of the remaining Revolving Loans are to be used to provide working
capital and for other general corporate purposes of Holdings and the
Subsidiaries. The Letters of Credit are to be used to support obligations in
connection with the Capital Contribution Agreement, and Letters of Credit in an
aggregate stated amount at any time not to exceed $15,000,000 may be used for
general corporate purposes of Holdings and the Subsidiaries. Swingline Loans are
to be used for general corporate purposes of Holdings and the Subsidiaries.
The parties hereto agree as follows:
ARTICLE I
Definitions; Construction ARTICLE I Definitions; Construction
SECTION 1.01. Defined TermsSECTION 1.01. Defined Terms. As
used in this Agreement, the following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Secured Parties.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR
Loan or Eurodollar Loan, (a) prior to the Leverage Date, (i) with respect to any
Revolving Loan, Tranche A Term Loan or Tranche X Term Loan, (A) 2.75% per annum,
in the case of a Eurodollar Loan, or (B) 1.75% per annum, in the case of an ABR
Loan, and (ii) with respect to any Tranche B Term Loan, (A) 3.00% per annum, in
the case of a Eurodollar Loan, or (B) 2.00% per annum, in the case of an ABR
Loan and (b) on and after the Leverage Date, the applicable rate per annum set
forth in the table below based on the Leverage Ratio:
============================ =================== ===================== ================= ==================
Tranche A and Tranche A Tranche B
Revolving and Eurodollar Tranche B
Facility Revolving Facility Spread ABR Spread
Leverage Ratio Eurodollar ABR
Spread Spread
- ---------------------------- ------------------- --------------------- ----------------- ------------------
- ---------------------------- ------------------- --------------------- ----------------- ------------------
Category 1 2.50% 1.50% 2.75% 1.75%
>4.5:1.0
- ---------------------------- ------------------- --------------------- ----------------- ------------------
- ---------------------------- ------------------- --------------------- ----------------- ------------------
Category 2 2.25% 1.25% 2.75% 1.75%
>4.0:1.0 and < 4.5:1.0
- ---------------------------- ------------------- --------------------- ----------------- ------------------
- ---------------------------- ------------------- --------------------- ----------------- ------------------
Category 3 2.00% 1.00% 2.75% 1.75%
>3.5 and < 4.0:1.0
- ---------------------------- ------------------- --------------------- ----------------- ------------------
- ---------------------------- ------------------- --------------------- ----------------- ------------------
Category 4 1.75% .75% 2.75% 1.75%
< 3.5:1.0
============================ =================== ===================== ================= ==================
The Leverage Ratio shall be determined as of the end of each
fiscal quarter of Holdings based upon Holdings' consolidated financial
statements delivered pursuant to Section 5.01(a) or (b). Each change in the
Applicable Rate resulting from a change in the Leverage Ratio shall be effective
during the period commencing on and including the second Business Day following
the date of delivery to the Administrative Agent of the consolidated financial
statements indicating such change and ending on the date immediately preceding
the effective date of the next such change; provided that if Holdings fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period from the expiration of the
time for delivery thereof until such consolidated financial statements are
delivered the Leverage Ratio shall be deemed to be greater than 4.5 to 1.0.
Notwithstanding the foregoing, until the Tranche X Term Loans shall have been
repaid in full, the Applicable Rate, insofar as it is applicable to Tranche X
Term Loans, shall be increased (i) by .25% per annum on the date corresponding
to the Effective Date in the third month following the month in which the
Effective Date occurs, and (ii) by an additional .25% per annum on the date
corresponding to the Effective Date in each of the third and sixth months
thereafter. For purposes of determining the Applicable Rate following the
Leverage Date but prior to the delivery of financial statements next required to
be delivered under Section 5.01(a) or (b), any computation of the Leverage Ratio
shall be based on the most recently delivered financial statements under
Sections 5.01(a) or (b) giving pro forma effect to such repayment of the Tranche
X term Loans and any related incurrence of Indebtedness as if they had occurred
on the date of the balance sheet included in such financial statements.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Assumable Facilities" means (a) the Existing Assumable
Facility and (b) the New Assumable Facility.
"Attributable Debt" means, in connection with any Sale and
Leaseback Transaction, the present value (discounted in accordance with GAAP at
the discount rate implied in the lease) of the obligations of the lessee for
rental payments during the term of the lease.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means The Kansas City Southern Railway Company, a
Missouri corporation.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Contribution Agreement" means the Capital
Contribution Agreement dated as of June 23, 1997, among Transportacion Maratima
Mexicana, S.A. de C.V., Holdings, Grupo TFM and TFM, S.A. de C.V..
"Capital Contribution Letter of Credit" means any Letter of
Credit issued in favor of the Chase Manhattan Bank as administrative agent under
the Grupo TFM Credit Agreement as required by the terms of the Capital
Contribution Agreement.
"Capital Expenditures" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of
Holdings and its consolidated subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of Holdings for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by Holdings and
its consolidated subsidiaries during such period.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Canama" means Canama Transportation, Inc., a Delaware
corporation.
"Caymex" means Caymex Transportation, Inc., a Delaware
corporation.
A "Change in Control" shall be deemed to have occurred if (i)
at any time, less than 75% of the members of the board of directors of Holdings
shall be (A) individuals who are members of such board on the date of the
Spin-Off or (B) individuals whose election, or nomination for election by
Holdings's stockholders, was approved by a vote of at least 75% of the members
of the board then still in office who are members of the board on the date of
the Spin-Off (or whose election or nomination has been approved as provided in
this clause (b)), (ii) at any time, any person, or any two or more persons
acting as a partnership, limited partnership, syndicate, or other group for the
purpose of acquiring, holding or disposing of Equity Interests of Holdings,
shall become, according to public announcement or filing, the "beneficial owner"
(as defined in Rule 13d-3 issued under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of Holdings representing 30% or
more (calculated in accordance with such Rule 13d-3) of the combined voting
power of Holdings' then outstanding voting securities, (iii) any Person other
than Holdings shall acquire ownership, directly or indirectly, beneficially or
of record of any Equity Interests of the Borrower or (iv) a "Change of Control"
(or similar event), as such term may be defined in any indenture or other
agreement or instrument governing Material Indebtedness, shall have occurred.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche A Term Loans, Tranche B Term Loans, Tranche X Term
Loans or Swingline Loans and, when used in reference to any Commitment, refers
to whether such Commitment is a Revolving Commitment, Tranche A Commitment,
Tranche B Commitment or Tranche X Commitment.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means The Chase Manhattan Bank, in its
capacity as collateral agent for the Secured Parties.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Administrative Agent shall have received from each
Loan Party either (i) a counterpart of each of the Security Agreement,
a Pledge Agreement, the Guarantee Agreement and the Indemnity,
Subrogation and Contribution Agreement duly executed and delivered on
behalf of such Loan Party or (ii) in the case of any Person that
becomes a Loan Party after the Effective Date, a supplement to each
such agreement, in the form specified therein, duly executed and
delivered on behalf of such Loan Party;
(b) all outstanding Equity Interests of the Borrower, any
Subsidiary or any other Person owned by or on behalf of any Loan Party
shall have been pledged pursuant to the Pledge Agreements (except that
the Loan Parties shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary) and the
Administrative Agent shall have received certificates or other
instruments representing all such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed
in blank;
(c) all Indebtedness of Holdings, the Borrower and each
Subsidiary that is owing to any Loan Party shall have been pledged
pursuant to the Pledge Agreement and any promissory notes evidencing
any such Indebtedness shall have been delivered to the Collateral
Agent, together with instruments of transfer with respect thereto
endorsed in blank;
(d) all documents and instruments, including Uniform
Commercial Code financing statements and filings with the STB, required
by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create the Liens intended to be created by
the Security Agreement and perfect such Liens to the extent required
by, and with the priority required by, the Security Agreement, shall
have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts
of Mortgages with respect to all Mortgaged Properties, duly executed
and delivered by the record owners of such Mortgaged Property and (ii)
such legal opinions, title insurance (except in the case of Mortgaged
Properties consisting of railroad facilities (other than the Borrower's
railroad yard in Shreveport, Louisiana), intermodal facilities and
rights of way), insurance and other documents as may be required under
the Mortgages or applicable law, or as the Administrative Agent may
reasonably request, with respect to any such Mortgages or Mortgaged
Properties; and
(f) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting
by it of the Liens thereunder.
The foregoing definition shall not require the creation or perfection of pledges
of or security interests in, or the obtaining of title insurance with respect
to, particular assets of the Loan Parties if and for so long as, in the judgment
of the Administrative Agent, the cost of creating or perfecting such pledges or
security interests in such assets or obtaining title insurance in respect of
such assets shall be excessive in view of the benefits to be obtained by the
Lenders therefrom. The Administrative Agent may grant extensions of time for the
perfection of security interests in or the obtaining of title insurance with
respect to particular assets (including extensions beyond the Effective Date for
the perfection of security interests in the assets of the Loan Parties on such
date) where it determines that perfection cannot be accomplished without undue
effort or expense by the time or times at which it would otherwise be required
by this Agreement or the Security Documents.
"Commitment" means a Revolving Commitment, Tranche A
Commitment, Tranche B Commitment or Tranche X Commitment, or any combination
thereof (as the context requires).
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent deducted
in determining such Consolidated Net Income, the sum of (i) Consolidated
Interest Expense for such period, (ii) consolidated income tax expense for such
period, (iii) all amounts attributable to depreciation and amortization for such
period and (iv) all extraordinary losses for such period and minus (b) without
duplication and to the extent included in determining such Consolidated Net
Income, any extraordinary gains for such period, all determined on a
consolidated basis in accordance with GAAP; provided that (a) for any period
including any fiscal quarter or portion thereof prior to the Spin-Off,
Consolidated EBITDA shall for all purposes be determined on a pro forma basis as
if the Spin-Off had occurred at the beginning of such period and (b) for
purposes of calculating the financial covenants set forth in Sections 6.13 and
6.14 and Excess Cash Flow, there shall be excluded in determining Consolidated
EBITDA for any period the net effect of the aggregate amount of restructuring
charges attributable to the Spin-Off.
"Consolidated Interest Expense" means, for any period, the
interest expense (including imputed interest expense in respect of Capital Lease
Obligations) of Holdings and the Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income or loss of Holdings, the Borrower and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income of any Person (other than Holdings) in which
any other Person (other than Holdings, the Borrower or any Subsidiary or any
director holding qualifying shares in compliance with applicable law) owns an
Equity Interest, except to the extent of the amount of dividends or other
distributions actually paid to Holdings, the Borrower or any of the Subsidiaries
during such period, and (b) the income or loss of any Person accrued prior to
the date it becomes a Subsidiary or is merged into or consolidated with
Holdings, the Borrower or any Subsidiary or the date that such Person's assets
are acquired by Holdings, the Borrower or any Subsidiary.
"Consolidated Net Worth" shall mean, on any date the
stockholders' equity of Holdings and the Subsidiaries on such date, determined
on a consolidated basis in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Holdings or any Subsidiary, are treated as a
single employer under Section 414(b) or 414(c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Debt Tender Offer" means the tender offer made by Holdings
for the Existing Notes pursuant to Holdings's Offer to Purchase and Consent
Solicitation Statement dated December 6, 1999.
"Debt Tender Premiums" means the tender premiums and consent
fees paid by Holdings in connection with the Debt Tender Offer.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Effective Date Transactions" means the Transactions that have
occurred, or that are contemplated or required by this Agreement to have
occurred, on or before the Effective Date and prior to or simultaneously with
the initial Borrowing or issuance of a Letter of Credit hereunder.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of Holdings, the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means, for any fiscal year, an amount equal
to:
(a) Consolidated EBITDA for such fiscal year; minus
(b) cash tax payments made by Holdings and its Subsidiaries
during such fiscal year; minus
(c) Consolidated Interest Expense for such fiscal year; minus
(d) Capital Expenditures for such fiscal year (except to the
extent attributable to the incurrence of Capital Lease Obligations or
otherwise financed by incurring long-term Indebtedness); minus
(e) the aggregate principal amount of long-term Indebtedness
repaid or prepaid by Holdings and its consolidated Subsidiaries during
such fiscal year, excluding (i) Indebtedness in respect of Revolving
Loans and Letters of Credit, (ii) Term Loans prepaid pursuant to
Section 2.11(c) or (d), and (iii) repayments or prepayments of
long-term Indebtedness financed by incurring other long-term
Indebtedness; minus
(f) reserves reasonably required by the Borrower, not to
exceed $5,000,000, for such fiscal year; minus
(g) up to $17,000,000 of payments made during such fiscal year
constituting the Grupo TFM Phase I Investment; minus
(h) the aggregate amount of investments or other payments
required to be made by Holdings or any of the Subsidiaries during such
fiscal year pursuant to mandatory capital calls or similar agreements
under joint venture, limited liability company or shareholder
agreements; plus
(i) an amount equal to any reserves established during prior
fiscal years which have been reversed by the Borrower during such
fiscal year.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19(b)), any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Existing Assumable Facility" means the credit facility
provided to Holdings pursuant to the Amended and Restated 364-Day Competitive
Advance and Revolving Credit Facility Agreement dated as of May 14, 1999, among
Holdings, the lenders party thereto, and The Chase Manhattan Bank, as
administrative agent
"Existing Credit Agreements" means (a) the Amended and
Restated 364-Day Competitive Advance and Revolving Credit Facility Agreement
dated as of April 30, 1999, and the Amended and Restated Five-Year Competitive
Advance and Revolving Credit Facility Agreement dated as of May 2, 1997, each
among Holdings, the lenders named therein and The Chase Manhattan Bank, as
administrative agent, as amended and (b) the Revolving Credit Facility Agreement
dated as of February 28, 1996, among Gateway, the lenders party thereto and The
Chase Manhattan Bank, as administrative agent and issuing bank.
"Existing Notes" means Holding's (a) 7.875% Notes due 2002,
(b) 6.625% Notes due 2005, (c) 8.80% Debentures due 2022 and (d) 7.00%
Debentures due 2025.
"Existing Preferred Stock" means (i) the 649,736 shares of
preferred stock of Holdings, par value $25 per share, paying 4% noncumulative
dividends and (ii) 57 shares of preferred stock issued by the Borrower to KCSL.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Person, the
chief financial officer, principal accounting officer, treasurer or controller
of such Person.
"Financing Transactions" means the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be a
party, the borrowing of Loans, the use of the proceeds thereof (including the
repayment and termination of the Existing Credit Agreements, the redemption of
the Existing Notes or the defeasance of any Existing Notes which are not
tendered pursuant to the Debt Tender Offer and the assumption of the obligations
of Holdings under the Assumable Facilities by Stilwell), the issuance of Letters
of Credit and the creation of the Liens provided for in the Security Documents.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary (other than Stilwell
and its subsidiaries) that is organized under the laws of a jurisdiction other
than the United States of America or any State thereof or the District of
Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Gateway" means Gateway Western Railway Company, a Delaware
corporation.
"GE Capital Sale Leaseback" means a proposed sale by the
Borrower to GE Capital of up to 1,000 rail cars for cash in an amount of not
less than $8,000,000 (or if less than 1000 cars are sold, not less than an
average of $8,000 per car) and the lease of such rail cars by the Borrower from
GE Capital.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government including the National Association of Insurance
Commissioners.
"Grupo TFM" means Grupo Transportacion Ferroviaria Mexicana,
S.A. de C.V., a Mexican corporation.
"Grupo TFM Phase I Investment" means the exercise by Holdings
or a Subsidiary of an option to purchase from the government of Mexico an
interest of approximately 1.5% in TFM, S.A. de C.V for approximately
$17,000,000.
"Grupo TFM Phase II Investment" means the purchase by Holdings
or a Subsidiary from the government of Mexico, pursuant to an option granted by
such government, of an additional interest of approximately 7.8% in TFM, S.A. de
C.V. for consideration consisting of an unsecured promissory note in an amount
not to exceed $76,100,000 issued by Holdings, the Borrower or a Subsidiary Loan
Party that is subordinated to the Obligations on terms satisfactory to, and all
the provisions of which (including amount, maturity, amortization, prepayment or
similar requirements, interest rate, covenants and defaults) have been approved
as to form and substance by, the Administrative Agent, it being understood that
(i) in no event shall the terms of such subordinated note require any
amortization or prepayment prior to the Tranche B Maturity Date, and (ii) a
Subsidiary shall not Guarantee such note unless (A) such Subsidiary also has
Guaranteed the Obligations pursuant to the Guarantee Agreement, (B) such
Guarantee is unsecured and subordinated to the Guarantee of the Obligations on
terms no less favorable to the Lenders than the subordination provisions of such
note and (iii) such Guarantee provides for the release and termination thereof,
without action by any party, upon any release and termination of such Guarantee
of the Obligations; provided that Holdings or such Subsidiary has entered into a
definitive agreement to sell such interest within 180 days of the acquisition
thereof to an unaffiliated third party for cash in an amount not less than the
fair market value of such interest.
"Grupo TFM Credit Agreement" means the Credit Agreement dated
as of June 23, 1997, among Grupo TFM, TFM S.A. de C.V. the banks party thereto,
Morgan Stanley Senior Funding, Inc., as syndication agent and as arranger, The
Chase Manhattan Bank as administrative agent and Merrill Lynch Capital
Corporation, as documentation agent.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement
substantially in the form of Exhibit C among Holdings, the Subsidiaries from
time to time party thereto and the Collateral Agent for the benefit of the
Secured Parties, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions hereof.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Holdings" means Kansas City Southern Industries, Inc., a
Delaware corporation.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity Subrogation and Contribution Agreement" means an
Indemnity, Subrogation and Contribution Agreement substantially in the form of
Exhibit D among Holdings, the Borrower, the Subsidiaries from time to time party
thereto and the Collateral Agent for the benefit of the Secured Parties, as the
same may be amended, modified or supplemented from time to time in accordance
with the provisions hereof.
"Information Memorandum" means the Confidential Information
Memorandum dated December 1999, relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Interstate Commerce Act" means the Interstate Commerce
Commission Termination Act of 1995, and the regulations promulgated thereunder.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"KCSL" means Kansas City Southern Lines, a Delaware corporation.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a draw under a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that shall have ceased to be a party
hereto pursuant to an Assignment and Acceptance. Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"Leverage Date" means the second Business Day following the
repayment in full of the Tranche X Term Loans.
"Leverage Ratio" means, on any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of Holdings ended on such date (or, if such date is
not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of Holdings most recently ended prior to such date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guarantee
Agreement, the Indemnity, Subrogation and Contribution Agreement, each Pledge
Agreement, the Security Agreement, the Mortgages and the other Security
Documents.
"Loan Parties" means Holdings, the Borrower and the other
Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, liabilities, operations, condition (financial or
otherwise) or prospects of Holdings, the Borrower and the other Subsidiaries
taken as a whole, (b) the ability of any Loan Party to perform any of its
obligations under any Loan Document or to complete the Transactions in any
material respect or (c) the rights of or benefits available to the Lenders under
any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and the other
Subsidiaries in an aggregate principal amount exceeding $10,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of Holdings, the Borrower or any other Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that Holdings, the Borrower or such Subsidiary
would be required to pay if such Hedging Agreement were terminated at such time.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, the real property and
the improvements thereto owned by the Loan Parties and described on Schedule 1
and all Rights of Way (as defined in any Mortgage), and includes all other real
property and improvements thereto with respect to which Mortgages are granted
pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" shall mean a Plan that is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA as to which
Holdings or any member of the Controlled Group may have any liability.
"Multiple Employer Plan" shall mean a Plan that is a
single-employer plan which has two or more contributing sponsors at least two of
whom are not under common control or who made contributions under such Plan
during the preceding five years.
"NAFTA Rail" means NAFTA Rail, S.A. de C.V., a Mexican
corporation.
"Net Proceeds" means, with respect to any event, (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by Holdings, the
Borrower and the other Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a Sale and Leaseback Transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made by Holdings, the Borrower and the other
Subsidiaries as a result of such event to repay Indebtedness (other than Loans)
secured by such asset or otherwise subject to mandatory prepayment as a result
of such event, and (iii) the amount of all taxes paid (or reasonably estimated
to be payable) by Holdings, the Borrower and the other Subsidiaries, and the
amount of any reserves established by Holdings, the Borrower and the other
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of Holdings). Notwithstanding
the foregoing, the first $5,000,000 of cash proceeds received during any fiscal
year in respect of Prepayment Events described in clauses (a) and (b) of the
definition of such term shall not be deemed to constitute Net Proceeds.
"New Assumable Facility" means the credit facility provided to
Holdings pursuant to the 364-Day Competitive Advance and Revolving Credit
Facility Agreement dated as of January 11, 2000, among Holdings, the lenders
party thereto, and The Chase Manhattan Bank, as administrative agent.
"Obligations" means (a) the due and punctual payment of (i)
the principal of and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (ii) each payment required to be made under
this Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of LC Disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
Holdings, the Borrower or any other Subsidiary to the Secured Parties under this
Agreement or any other Loan Document, (b) the due and punctual payment and
performance of all covenants, agreements, obligations, and liabilities of the
Loan Parties, monetary or otherwise, under or pursuant to this Agreement and the
other Loan Documents and (c) the due and punctual payment of all obligations of
the Borrower under each Hedging Agreement entered into (i) prior to the date
hereof with any counterparty that is a Lender (or an Affiliate thereof) on the
date hereof or (ii) on or after the date hereof with any counterparty that is a
Lender (or an Affiliate thereof) at the time such Hedging Agreement is entered
into, in either case to provide protection against interest rate fluctuations.
"Other Letter of Credit" means any Letter of Credit that is
not a Capital Contribution Letter of Credit.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in a form
approved by the Collateral Agent.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above; and
(e) such other liquid investments as shall be approved by the
Administrative Agent.
"Permitted Subordinated Debt" means any unsecured Indebtedness
of Holdings or the Borrower that is subordinated to the Obligations on terms
satisfactory to, and all the provisions of which (including amount, maturity,
amortization, prepayment or similar requirements, interest rate, covenants,
defaults, and subordination) have been approved as to form and substance by, the
Administrative Agent, it being understood that (a) in no event shall the terms
of such subordinated Indebtedness require any amortization prior to the Tranche
B Maturity Date, and (b) a Subsidiary shall not Guarantee such subordinated
Indebtedness unless (i) such Subsidiary also has Guaranteed the Obligations
pursuant to the Guarantee Agreement, (ii) such Guarantee of such subordinated
Indebtedness is unsecured and subordinated to the Guarantee of the Obligations
on terms no less favorable to the Lenders than the subordination provisions of
such subordinated Indebtedness and (iii) such Guarantee of such subordinated
Indebtedness provides for the release and termination thereof, without action by
any party, upon any release and termination of such Guarantee of the
Obligations.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" shall mean any employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code as to which Holdings or any member of the Controlled
Group may have any liability.
"Pledge Agreements" means (a) a Pledge Agreement substantially
in the form of Exhibit E among Holdings, the Borrower, the other Subsidiaries
from time to time party thereto and the Collateral Agent and (b) in connection
with pledges of shares of or other equity interests in Foreign Subsidiaries,
other pledge agreements or similar agreements in form and substance satisfactory
to the Collateral Agent, as the same may be amended, modified or supplemented
from time to time in accordance with the provisions hereof.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a Sale and Leaseback Transaction) of any property or asset
of Holdings, the Borrower or any other Subsidiary, other than sales,
transfers or dispositions described in clauses (a), (b) and (c) and of
Section 6.05; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of Holdings, the Borrower or any other
Subsidiary, but only to the extent that the Net Proceeds therefrom have
not been applied to repair, restore or replace such property or asset
within 180 days after such event; or
(c) the issuance by Holdings, the Borrower or any other
Subsidiary of any Equity Interests, or the receipt by Holdings, the
Borrower or any other Subsidiary of any capital contribution, other
than any such issuance of Equity Interests to, or receipt of any such
capital contribution from, Holdings, the Borrower or any other
Subsidiary; or
(d) the incurrence by Holdings, the Borrower or any other
Subsidiary of any Permitted Subordinated Debt.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Railway Labor Act" means Railway Labor Act, as amended from
time to time.
"Register" has the meaning set forth in Section 9.04.
"Related Fund" means with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA and the regulations issued under such Section with
respect to a Plan (other than a Multiemployer Plan), excluding, however, such
events as to which the PBGC by regulation or by technical update waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event; provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a reportable event regardless of the issuance of any waiver in accordance with
Section 412(d) of the Code.
"Required Lenders" means, at any time, Lenders having
Revolving Exposures, Term Loans and unused Commitments representing more than
50% of the sum of the total Revolving Exposures, outstanding Term Loans and
unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, the Borrower or any other Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in Holdings,
the Borrower or any other Subsidiary or any option, warrant or other right to
acquire any such Equity Interests in Holdings, the Borrower or any other
Subsidiary.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable. The initial aggregate amount of the Lenders' Revolving Commitments
is $150,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"Revolving Loan" means a Loan made pursuant to clause (d) of
Section 2.01.
"Revolving Maturity Date" means January 11, 2006.
"Sale and Leaseback Transaction" means any arrangement,
directly or indirectly, whereby any Person shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.
"Secured Parties" means (a) the Lenders, (b) the
Administrative Agent, (c) the Issuing Bank, (d) the Collateral Agent, (e) each
other holder of or obligee in respect of any Obligations and (f) the successors
and assigns of each of the foregoing.
"Security Agreement" means a Security Agreement substantially
in the form of Exhibit F among Holdings, the Borrower, the other Subsidiaries
from time to time party thereto and the Collateral Agent for the benefit of the
Secured Parties, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions hereof.
"Security Documents" means the Security Agreement, each Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Significant Subsidiary" means (a) the Borrower, KCSL, Caymex
and Gateway, (b) any Subsidiary owning an Equity Interest in a Significant
Subsidiary and (c) any other Subsidiary (i) the consolidated revenues of which
for the most recent fiscal year of Holdings for which audited financial
statements have been delivered pursuant to Section 5.01 were greater than 5% of
Holdings' consolidated revenues for such fiscal year or (ii) the consolidated
tangible assets of which as of the end of such fiscal year were greater than 5%
of Holdings' consolidated tangible assets as of such date; provided that, if at
any time the aggregate amount of the consolidated revenues or consolidated
tangible assets of all Subsidiaries that are not Significant Subsidiaries for or
at the end of any fiscal year exceeds 10% of Holdings' consolidated revenues for
such fiscal year or 10% of Holdings' consolidated tangible assets as of the end
of such fiscal year, Holdings (or, in the event Holdings has failed to do so
within 10 days, the Administrative Agent) shall designate sufficient
Subsidiaries as "Significant Subsidiaries" to eliminate such excess, and such
designated Subsidiaries shall for all purposes of this Agreement constitute
Significant Subsidiaries. For purposes of making the determinations required by
this definition, revenues and assets of Foreign Subsidiaries shall be converted
into dollars at the rates used in preparing the consolidated balance sheet of
Holdings included in the applicable financial statements. The Significant
Subsidiaries on the date hereof are identified in Schedule 3.12 hereto.
"S&P" means Standard & Poor's.
"Spin-Off" means the distribution by Holdings of all the
issued and outstanding common stock of Stilwell to the shareholders of Holdings
as described in Stilwell's Form 10.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STB" shall mean the Surface Transportation Board, a board
established within the Department of Transportation, or any successor Federal
agency charged with similar regulation of common carriers.
"Stilwell" means Stilwell Financial, Inc., a Delaware
corporation.
"Stilwell's Form 10" means the Form 10 filed by Stilwell with
the Securities and Exchange Commission on August 18, 1999, as amended.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means the Borrower and each other subsidiary of
Holdings; provided that upon completion of the Spin-Off, "Subsidiary" shall not
include Stilwell or any of its Subsidiaries.
"Subsidiary Loan Party" means each of Veals, Inc.,
Trans-Serve, Inc., Gateway Eastern Railway Company, Global Terminaling Services,
Inc., The Kansas City Northern Railway Company, Mid-South Microwave, Inc. and
any Significant Subsidiary (other than Stilwell and its subsidiaries) that is
not a Foreign Subsidiary.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Tranche A Term Loans, Tranche B Term Loans
and Tranche X Term Loans.
"Total Indebtedness" means, as of any date, the aggregate
principal amount of Indebtedness of Holdings and the Subsidiaries outstanding as
of such date that would be reflected on a balance sheet prepared as of such date
on a consolidated basis in accordance with GAAP.
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder on
the Effective Date, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Tranche A Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche A Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche A Commitments is $150,000,000.
"Tranche A Lender" means a Lender with a Tranche A Commitment
or an outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means December 30, 2005.
"Tranche A Term Loan" means a Loan made pursuant to clause (a)
of Section 2.01.
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Tranche B Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche A Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche B Commitments is $250,000,000.
"Tranche B Lender" means a Lender with a Tranche B Commitment
or an outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means December 29, 2006.
"Tranche B Term Loan" means a Loan made pursuant to clause (b)
of Section 2.01.
"Tranche X Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche X Term Loan hereunder on
the Effective Date, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Tranche X Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche X Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche X Commitments is $200,000,000.
"Tranche X Lender" means a Lender with a Tranche X Commitment
or an outstanding Tranche X Term Loan.
"Tranche X Maturity Date" means January 11, 2001.
"Tranche X Term Loan" means a Loan made pursuant to clause (c)
of Section 2.01.
"Transactions" means the Spin-Off, the Financing Transactions
and the other transactions contemplated hereby.
"Transaction Costs" means the fees and expenses incurred in
connection with the Transactions that are to occur on or prior to the Effective
Date.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Unfunded Liabilities" shall mean, on any date of
determination, (a) in the case of Multiemployer Plans and Multiple Employer
Plans, the liability of Holdings and the Subsidiaries if they were to incur a
complete withdrawal from each such plan and (b) in the case of all other Plans,
all "unfunded benefit liabilities" as defined in Section 4001(a)(18) of ERISA .
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and BorrowingsSECTION
1.02. Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a "Revolving Loan") or
by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar
Revolving Loan"). Borrowings also may be classified and referred to by Class
(e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar Borrowing")
or by Class and Type (e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms GenerallySECTION 1.03. Terms Generally.
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAPSECTION 1.04. Accounting
Terms; GAAP. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits ARTICLE II The Credits
SECTION 2.01. CommitmentsSECTION 2.01. Commitments. Subject to
the terms and conditions set forth herein, each Lender agrees (a) to make a
Tranche A Term Loan to the Borrower on the Effective Date in a principal amount
not exceeding its Tranche A Commitment, (b) to make a Tranche B Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its Tranche B
Commitment, (c) to make a Tranche X Term Loan to the Borrower on the Effective
Date in a principal amount not exceeding its Tranche X Commitment (as such
Commitment shall have been reduced pursuant to Section 2.08(a)) and (d) to make
Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts
repaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and BorrowingsSECTION 2.02. Loans and
Borrowings. (a) Each Loan (other than a Swingline Loan) shall be made as part of
a Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR
Loan. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $500,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of 12 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date, Tranche A Maturity Date, Tranche B Maturity
Date or Tranche X Maturity Date, as applicable.
SECTION 2.03. Requests for BorrowingsSECTION 2.03. Requests
for Borrowings. To request a Revolving Borrowing or Term Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date
of the proposed Borrowing; provided that any such notice of an ABR Revolving
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, Tranche A Term Borrowing, Tranche B Term Borrowing or
Tranche X Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline LoansSECTION 2.04. Swingline Loans.
(a) Subject to the terms and conditions set forth herein, the Swingline Lender
agrees to make Swingline Loans to the Borrower from time to time during the
Revolving Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $10,000,000 or (ii) the sum of the total
Revolving Exposures exceeding the total Revolving Commitments; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of CreditSECTION 2.05. Letters of
Credit. (a) General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Capital Contribution Letters of Credit and
Other Letters of Credit, in each case for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the portion of the LC Exposure attributable
to Capital Contribution Letters of Credit shall not exceed $75,000,000, (ii) the
portion of the LC Exposure attributable to Other Letters of Credit shall not
exceed $15,000,000 and (iii) the total Revolving Exposures shall not exceed the
total Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension), (ii) the date that
is five Business Days prior to the Revolving Maturity Date and (iii) if such
Letter of Credit is a Capital Contribution Letter of Credit, the date on which
such Letter of Credit is no longer required to be in effect under the terms of
the Capital Contribution Agreement.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $1,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower or Holdings described in clause (h) or (i) of Article
VII. Each such deposit shall be held by the Administrative Agent as collateral
for the payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
Borrower's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived. If
the Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing.
SECTION 2.06. Funding of BorrowingsSECTION 2.06. Funding of
Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans
made to finance the reimbursement of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to such Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.07. Interest ElectionsSECTION 2.07. Interest
Elections. (a) Each Revolving Borrowing and Term Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, which may not
be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (e) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of CommitmentsSECTION
2.08. Termination and Reduction of Commitments. (a) The Tranche X Commitments
shall be reduced by an amount equal to the aggregate principal amount of the
undefeased Existing Notes in excess of $3,000,000 to be outstanding on the
Effective Date after the initial borrowings hereunder and the application of the
proceeds thereof.
(b) Unless previously terminated, (i) the Tranche A
Commitments, Tranche B Commitments and Tranche X Commitments shall terminate at
5:00 p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.
(c) The Revolving Commitments shall be reduced to $100,000,000
on the later of (i) January 2, 2001, and (ii) the date on which a Capital
Contribution Letter of Credit is no longer required to be in effect under the
terms of the Capital Contribution Agreement.
(d) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
(e) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (d) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of DebtSECTION
2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Revolving Maturity Date, (ii) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Term Loan of
such Lender as provided in Section 2.10 and (iii) to the Swingline Lender the
then unpaid principal amount of each Swingline Loan on the earlier of the
Revolving Maturity Date and the 10th Business Day after such Swingline Loan is
made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans that were outstanding on the date such
Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Amortization of Term LoansSECTION 2.10.
Amortization of Term Loans. (a) Subject to adjustment pursuant to paragraph (d)
below, the Borrower shall repay Tranche A Term Borrowings on each date set forth
below in the aggregate principal amount set forth opposite such date:
Date Amount
March 30, 2001 $ 5,000,000
June 29, 2001 $ 5,000,000
September 28, 2001 $ 5,000,000
December 31, 2001 $ 5,000,000
March 29, 2002 $ 7,500,000
June 28, 2002 $ 7,500,000
September 30, 2002 $ 7,500,000
December 31, 2002 $ 7,500,000
March 31, 2003 $ 7,500,000
June 30, 2003 $ 7,500,000
September 30, 2003 $ 7,500,000
December 31, 2003 $ 7,500,000
March 31, 2004 $ 7,500,000
June 30, 2004 $ 7,500,000
September 30, 2004 $ 7,500,000
December 31, 2004 $ 7,500,000
March 31, 2005 $ 10,000,000
June 30, 2005 $ 10,000,000
September 30, 2005 $ 10,000,000
December 30, 2005 $ 10,000,000
(b) Subject to adjustment pursuant to paragraph (d) below, the
Borrower shall repay Tranche B Term Borrowings on each date set forth below in
the aggregate principal amount set forth opposite such date:
Date Amount
March 30, 2001 $ 625,000
June 29, 2001 $ 625,000
September 28, 2001 $ 625,000
December 31, 2001 $ 625,000
March 29, 2002 $ 625,000
June 28, 2002 $ 625,000
September 30, 2002 $ 625,000
December 31, 2002 $ 625,000
March 31, 2003 $ 625,000
June 30, 2003 $ 625,000
September 30, 2003 $ 625,000
December 31, 2003 $ 625,000
March 31, 2004 $ 625,000
June 30, 2004 $ 625,000
September 30, 2004 $ 625,000
December 31, 2004 $ 625,000
March 31, 2005 $ 625,000
June 30, 2005 $ 625,000
September 30, 2005 $ 625,000
December 30, 2005 $ 625,000
March 31, 2006 $ 59,375,000
June 30, 2006 $ 59,375,000
September 29, 2006 $ 59,375,000
December 29, 2006 $ 59,375,000
(c) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Maturity Date, (ii) all Tranche
B Term Loans shall be due and payable on the Tranche B Maturity Date and (iii)
all Tranche X Term Loans shall be due and payable on the Tranche X Maturity
Date.
(d) Any prepayment of a Term Borrowing of any Class shall be
applied to reduce ratably the subsequent scheduled repayments of the Term
Borrowings of such Class. If the initial aggregate amount of the Lenders' Term
Commitments of any Class exceeds the aggregate principal amount of Term Loans of
such Class that are made on the Effective Date, then the scheduled repayments of
Term Borrowings of such Class to be made pursuant to this Section shall be
reduced ratably by an aggregate amount equal to such excess.
(e) Prior to any repayment of any Term Borrowings of either
Class hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment. Each repayment of a Borrowing shall be applied ratably to the Loans
included in the repaid Borrowing. Repayments of Term Borrowings shall be
accompanied by accrued interest on the amount repaid.
SECTION 2.11. Prepayment of LoansSECTION 2.11. Prepayment of
Loans. (a) The Borrower shall have the right at any time and from time to time
to prepay any Borrowing in whole or in part, subject to the requirements of this
Section.
(b) In the event and each occasion that the sum of the
Revolving Exposures exceeds the total Revolving Commitments, the Borrower shall
prepay Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings
are outstanding, deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds
are received by or on behalf of Holdings, the Borrower or any Subsidiary (other
than Stilwell and its subsidiaries) in respect of any Prepayment Event, the
Borrower shall, within three Business Days after such Net Proceeds are received,
prepay Term Borrowings in an aggregate amount equal to such Net Proceeds (or, in
the case of a Prepayment Event relating to a Subsidiary that is not a wholly
owned Subsidiary, the portion of such Net Proceeds corresponding to the direct
or indirect equity interest of Holdings in such Subsidiary); provided that, in
the case of any event described in clause (a) of the definition of the term
Prepayment Event, if the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower to the effect that the
Borrower and the Subsidiaries intend to apply the Net Proceeds from such event
(or a portion thereof specified in such certificate), within 180 days after
receipt of such Net Proceeds, to acquire real property, equipment or other
tangible assets to be used in the business of the Borrower and the Subsidiaries,
and certifying that no Event of Default has occurred and is continuing, then no
prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds in respect of such event (or the portion of such Net Proceeds specified
in such certificate, as applicable) except to the extent of any such Net
Proceeds that have not been so applied by the end of such 180-day period, at
which time a prepayment shall be required in an amount equal to such Net
Proceeds that have not been so applied.
(d) Following the end of each fiscal year of Holdings,
commencing with the fiscal year ending December 31, 2000, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to (a) 75% of Excess Cash
Flow for such fiscal year if the Tranche X Term Loans shall not have been paid
in full prior to the end of such fiscal year and (b) 50% of Excess Cash Flow for
such fiscal year of Holdings if the Tranche X Term Loans shall have been paid in
full prior to the end of such fiscal year. Each prepayment pursuant to this
paragraph shall be made on or before the date on which financial statements are
delivered pursuant to Section 5.01 with respect to the fiscal year for which
Excess Cash Flow is being calculated (and in any event within 105 days after the
end of such fiscal year).
(e) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (f) of this Section. In the event of any optional or
mandatory prepayment of Term Borrowings made at a time when Term Borrowings of
more than one Class remain outstanding, the Borrower shall select Term
Borrowings to be prepaid so that the aggregate amount of such prepayment is
allocated (i) first, if there are any Tranche X Term Borrowings outstanding, to
the Tranche X Term Borrowings and (ii) second, to the Tranche A Term Borrowings
and Tranche B Term Borrowings pro rata based on the aggregate principal amount
of the outstanding Borrowings of each such Class. Any Tranche B Lender may
elect, by notice to the Administrative Agent by telephone (confirmed by
telecopy) at least one Business Day prior to the prepayment date, to decline all
or any portion of any prepayment of its Tranche B Term Loans pursuant to this
Section (other than an optional prepayment pursuant to paragraph (a) of this
Section, which may not be declined), in which case the aggregate amount of the
prepayment that was so declined shall be applied to prepay on a ratable basis
Tranche A Term Borrowings and Tranche B Term Loans of Lenders that shall not
have declined such prepayment; provided that Tranche B Lenders shall be
permitted to decline any prepayment only to the extent the aggregate amount of
the prepayment declined shall not exceed the sum of the outstanding Tranche A
Term Borrowings and the outstanding Tranche B Term Loans as to which elections
to decline such prepayment shall not have been made (and any reduction of the
amounts declined shall be distributed ratably among the declining Lenders).
(f) The Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender)
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment, (ii) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
SECTION 2.12. FeesSECTION 2.12. Fees. (a) The Borrower agrees
to pay to the Administrative Agent for the account of each Lender a commitment
fee, which shall accrue at the rate of .50% per annum on the average daily
unused amount of each Commitment of such Lender during the period from and
including the date of this Agreement to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears (i)
in the case of commitment fees in respect of the Revolving Commitments, on the
last day of March, June, September and December of each year and on the date on
which the Revolving Commitments terminate, commencing on the first such date to
occur after the date hereof, and (ii) in the case of commitment fees in respect
of the Tranche A Term Commitments, Tranche B Term Commitments and Tranche X Term
Commitments, on the Effective Date or any earlier date on which such Commitments
terminate. All commitment fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). For purposes of computing commitment fees
with respect to Revolving Commitments, a Revolving Commitment of a Lender shall
be deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Rate
used to determine the interest rates applicable to Eurodollar Revolving Loans on
the average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of .25% per annum on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Revolving Commitments terminate and any such fees accruing
after the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. InterestSECTION 2.13. Interest. (a) The Loans
comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of InterestSECTION 2.14.
Alternate Rate of Interest. If on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period or that dollar deposits in the principal amounts of the
Eurodollar Loans are not generally available in the London interbank
markets; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing. In the event of any such
determination, the Lenders shall negotiate with the Borrower, at its request, as
to the interest rate which the Loans comprising such an ABR Borrowing shall
bear; provided that such Loans shall bear interest as provided in Section
2.13(a) pending the execution by the Borrower and the Lenders of a written
agreement providing for a different interest rate. Each determination by the
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.15. Increased CostsSECTION 2.15. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding PaymentsSECTION 2.16. Break
Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.11(f) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event; provided that no such compensation shall be required
in respect of the prepayment of a Eurodollar Loan for which an Interest Period
of one month was selected by the Borrower if the Borrowing Request in respect of
such Eurodollar Loan indicated that such Eurodollar Loan (or any portion
thereof) would be prepaid in one or more payments within one month of the date
on which such Interest Period commenced. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.17. TaxesSECTION 2.17. Taxes. (a) Any and all
payments by or on account of any obligation of the Borrower hereunder or under
any other Loan Document shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Set-offsSECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of
LendersSECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.15, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
Representations and Warranties ARTICLE III Representations and
Warranties
Each of Holdings and the Borrower represents and warrants to
the Lenders that:
SECTION 3.01. Organization; PowersSECTION 3.01. Organization;
Powers. Each of Holdings and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02. Authorization; EnforceabilitySECTION 3.02.
Authorization; Enforceability. The Transactions to be completed by each Loan
Party are within such Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by each of Holdings and the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of Holdings, the Borrower or
such Loan Party, as the case may be, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No ConflictsSECTION
3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require
any consent or approval of, registration or filing with or any other action by
any Governmental Authority, except such as have been obtained or made and are in
full force and effect and except filings necessary to perfect Liens created
under the Security Documents, (b) will not violate any applicable law or
regulation (including the Interstate Commerce Act) or the charter, by-laws or
other organizational documents of Holdings or any of the Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon Holdings or any
of the Subsidiaries or their assets (other than violations of agreements with
respect to assets of Holdings or any Subsidiary which violations will not
materially affect the value of any such asset or any right of any Secured Party
with respect thereto), or give rise to a right thereunder to require any
material payment to be made by Holdings or any of the Subsidiaries, except for
payments required in connection with the Debt Tender Offer, the defeasance of
any of the Existing Notes or the payment of amounts outstanding under the
Existing Credit Facilities, and (d) will not result in the creation or
imposition of any Lien on any asset of Holdings or any of the Subsidiaries,
except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse
ChangeSECTION 3.04. Financial Condition; No Material Adverse Change. (a)
Holdings has heretofore furnished to the Lenders Holdings' consolidated balance
sheet and statements of income, stockholders' equity and cash flows (i) as of
and for the fiscal year ended December 31, 1998, reported on by
PricewaterhouseCoopers LLP, independent public accountants and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended September 30,
1999, certified by its chief financial officer. Such financial statements
present fairly in all material respects the financial position and results of
operations and cash flows of Holdings and the consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) Holdings has heretofore furnished to the Lenders Holdings'
pro forma consolidated balance sheet as of September 30, 1999, prepared giving
effect to the Effective Date Transactions as if such Transactions had occurred
on such date. Such pro forma consolidated balance sheet (i) has been prepared in
good faith based on the same assumptions used to prepare the pro forma financial
statements included in the Information Memorandum (which assumptions are
believed by Holdings and the Borrower to be reasonable), (ii) is based on the
best information available to Holdings and the Borrower after due inquiry, (iii)
accurately reflects all adjustments necessary to give effect to the Effective
Date Transactions and (iv) presents fairly in all material respects the pro
forma financial position of Holdings and the consolidated Subsidiaries as of
September 30, 1999, as if such Transactions had occurred on such date.
(c) Since December 31, 1998, there has been no material
adverse change in the business, properties, financial condition, prospects or
results of operations of Holdings and the Subsidiaries (excluding the assets and
businesses to be owned by Stilwell and its subsidiaries following the Spin-Off),
taken as a whole.
(d) In addition to the representations and warranties set
forth above in this Section 3.04, Holdings and Stilwell have advised the Lenders
that for financial reporting purposes the Securities and Exchange Commission
(the "SEC") has taken the position that Janus Capital Corporation ("Janus")
should be deconsolidated and treated as an equity investment in the financial
statements of Stilwell and, prior to the Spin-Off, Holdings. To the extent the
SEC prevails in its position or Holdings and Stilwell concede such position with
the consequence that the financial statements previously delivered to the
Lenders must be restated to conform with GAAP by presenting Janus as an equity
investment the representations set forth in clauses (a) or (b) of this Section
3.04 shall not be deemed to be untrue in any material respect. Holdings hereby
represents and warrants to the Lenders that any such restatement of the
financial statements of Holdings or Stilwell will not materially impact
Holdings' or Stilwell's net income or earnings per share or the calculation of
any ratios relevant to the financial covenants set forth in Sections 6.13 or
6.14.
SECTION 3.05. PropertiesSECTION 3.05. Properties. (a) On the
date hereof, Holdings and the Subsidiaries have good title to, or valid easement
or leasehold interests in, all the real and personal property material to their
businesses (including the Mortgaged Properties), free of all Liens other than
those permitted by Section 6.02 with the exception however of those Rights of
Way (as defined in the Mortgage) located on or passing over land owned not by
any of the Mortgagors but by third parties and in such cases the foregoing
representation is limited to the actual Rights of Way exclusive of the
underlying land, and subject also to Liens affecting such land to which the
Rights of Way may be subject.
(b) Schedule 3.05(b) describes each real property other than
the Rights of Way (as defined in the Mortgage) that will be owned or leased by
Holdings or any other Subsidiary (other than Stilwell and its subsidiaries) as
of the Effective Date after giving effect to the Transactions (other than real
properties and leasehold interests which (i) which have a fair market value not
greater than $500,000 and (ii) are not otherwise essential railroad operating
facilities).
(c) As of the date hereof, except as set forth on Schedule
3.05(c), neither Holdings, nor any of the Subsidiaries (other than Stilwell and
its subsidiaries) has received written notice of, and none of the President, any
Vice President or any Financial Officer of Holdings or any Subsidiary has
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation
which would materially and adversely interfere with the operations of Holdings
or any Subsidiary or which would materially affect the value of such Mortgaged
Property.
SECTION 3.06. Litigation and Environmental MattersSECTION
3.06. Litigation and Environmental Matters. (a) Except as set forth in Schedule
3.06 or disclosed in Holdings' Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed with the Securities and Exchange Commission,
there are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of Holdings or the
Borrower, threatened against or affecting Holdings or any of the Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect, (ii) that involve any
of the Loan Documents or the borrowings hereunder or (iii) that are pending as
of the Effective Date and involve any of the other Transactions.
(b) Except for the Disclosed Matters or as disclosed in
Holdings' Annual Report on Form 10-K for the fiscal year ended December 31,
1998, filed with the Securities and Exchange Commission and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither Holdings,
the Borrower nor any other Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) to the best knowledge and belief of
Holdings and the Borrower, knows of any basis for any Environmental Liability.
SECTION 3.07. Compliance with Laws and AgreementsSECTION 3.07.
Compliance with Laws and Agreements. Holdings and each Subsidiary is, to the
best knowledge of Holdings and the Borrower, in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property (including the Interstate Commerce Act and the Railway Labor Act) and
all indentures, agreements and other instruments binding upon it or its
property, except failures to be in compliance that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.08. Investment and Holding Company StatusSECTION
3.08. Investment and Holding Company Status. Neither Holdings nor any of the
Subsidiaries is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
SECTION 3.09. TaxesSECTION 3.09. Taxes. Each of Holdings and
the Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) any Taxes that are being contested
in good faith by appropriate proceedings and for which Holdings or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. SECTION 3.10. Employee Benefit Plans. The
Unfunded Liabilities of all Plans do not in the aggregate exceed $10,000,000.
Each Plan complies in all material respects with all applicable requirements of
law and regulations, no Reportable Event has occurred or is reasonably expected
to occur with respect to any Plan and neither Holdings nor any other member of
the Controlled Group has (i) taken any steps to terminate any Plan, (ii)
initiated any steps to withdraw from any Plan or (iii) incurred any Withdrawal
Liability.
SECTION 3.11. DisclosureSECTION 3.11. Disclosure. Neither the
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, Holdings and the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. SubsidiariesSECTION 3.12. Subsidiaries. Schedule
3.12 sets forth the name and the Persons owning the Equity Interests of each
Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case after giving effect to the Transactions to occur on and as of the
Effective Date.
SECTION 3.13. InsuranceSECTION 3.13. Insurance. Schedule 3.13
sets forth a description of all insurance maintained by or on behalf of Holdings
and its Subsidiaries on the Effective Date after giving effect to the
Transactions to occur on the Effective Date. As of the Effective Date, all
premiums in respect of such insurance have been paid. Holdings and the Borrower
believe that the insurance maintained by or on behalf of Holdings and the
Subsidiaries is adequate.
SECTION 3.14. SECTION 3.14. SolvencySolvency. (i) Immediately
after the consummation of the Effective Date Transactions (ii) immediately
following the making of each Loan made on the Effective Date and after giving
effect to the application of the proceeds of such Loans and (iii) immediately
following the completion of the Spin-Off, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date and completion of the Spin-Off.
SECTION 3.15. No Undisclosed Dividend RestrictionsSECTION
3.15. No Undisclosed Dividend Restrictions. Except as set forth in Schedule 6.07
and except for limitations on the payment of dividends under applicable law,
none of the Subsidiaries is subject to any agreement, amendment, covenant or
understanding that directly or indirectly (through the application of financial
covenants or otherwise) prohibits the ability of such entity to declare or pay
dividends.
SECTION 3.16. Year 2000SECTION 3.16. Year 2000. There have not
occurred, and Holdings and the Borrower do not expect that there will occur, any
material disruption in the operations or business systems of Holdings or the
Subsidiaries resulting from the inability of computer systems or equipment
containing embedded microchips to recognize or properly process dates in or
following the year 2000.
ARTICLE IV
Conditions ARTICLE IV Conditions
SECTION 4.01. Effective DateSECTION 4.01. Effective Date. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders and dated the Effective Date)
of each of (i) Sonnenschein Nath & Rosenthal counsel for Holdings, the
Borrower and the other Loan Parties, substantially in the form of
Exhibit B and (ii) local counsel in Texas, Arkansas, Missouri, Kansas,
Louisiana, Oklahoma, Mississippi and Illinois, in form and substance
satisfactory to the Administrative Agent and its counsel and, in the
case of each such opinion required by this paragraph, covering such
other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Administrative Agent shall reasonably request. Each
of Holdings and the Borrower hereby requests such counsel to deliver
such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan
Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party hereunder
or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an
executive officer or Financial Officer of the Borrower, together with
all attachments contemplated thereby, including the results of a search
of the Uniform Commercial Code (or equivalent) filings made with
respect to the Loan Parties in the jurisdictions contemplated by the
Perfection Certificate and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(g) The Administrative Agent shall have received evidence that
the insurance required by this Agreement and the Security Documents is
in effect.
(h) Holdings shall be in compliance with the covenants set
forth in Sections 6.13, 6.14 and 6.15, giving pro forma effect to the
Effective Date Transactions as if such Transactions had occurred at the
beginning of each relevant period, and the Administrative Agent shall
have received a certificate of a Financial Officer of Holdings
demonstrating such compliance.
(i) The Administrative Agent shall be satisfied that the
Transaction Costs (including the Debt Tender Premiums) will not exceed
$25,000,000.
(j) Holdings shall have terminated or caused to be terminated,
or shall simultaneously terminate or cause to be terminated the
Existing Credit Agreements and the commitments thereunder shall have
been permanently canceled and all amounts outstanding thereunder shall
have been paid in full. Prior to the foregoing terminations, no Default
or Event of Default (as defined in the Existing Credit Agreements)
shall have occurred and be continuing.
(k) Either (i) Holdings shall have made the Debt Tender Offer
and shall have acquired pursuant thereto Existing Notes representing
not less than 51% of the aggregate principal amount of each class of
the Existing Notes, and the covenants benefitting any Existing Notes
remaining outstanding after the Effective Date shall have been
eliminated or modified in a manner satisfactory to the Administrative
Agent pursuant to consents obtained from tendering note holders or (ii)
the Existing Notes shall have been defeased and the covenants
benefitting the Existing Notes shall have been made ineffective in a
manner satisfactory to the Administrative Agent (or arrangements
satisfactory to the Administrative Agent shall have been made for the
prompt defeasance of the Existing Notes and the rendering ineffective
of such covenants).
(l) Holdings shall have borrowed $125,000,000 under the New
Assumable Facility, all obligations of Holdings under the Assumable
Facilities shall have been assumed by Stilwell in accordance with the
terms thereof, Holdings shall have been released from all such
obligations and the borrowings under the New Assumable Facility shall
have been outstanding at the time of the assumption of the New
Assumable Facility and the Existing Assumable Facility by Stilwell.
(m) After giving effect to the Transactions occurring on the
Effective Date, Holdings and its Subsidiaries (other than Stilwell)
shall have outstanding no Indebtedness or preferred stock other than
(a) Indebtedness under the Loan Documents, (b) Indebtedness in respect
of any Existing Notes not tendered pursuant to the Debt Tender Offer,
(c) the Existing Preferred Stock and (d) the Indebtedness set forth on
Schedule 6.01.
(n) The Lenders shall have received (a) audited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows of Holdings for the 1998 fiscal year and (b) unaudited
consolidated balance sheets and related statements of income,
stockholders' equity and cash flows of Holdings for each subsequent
fiscal quarter ended not less than 30 days before the Closing Date,
which financial statements shall not be materially inconsistent with
the financial statements or forecasts previously provided to the
Lenders.
(o) The Lenders shall have received a pro forma consolidated
balance sheet of Holdings as of the last day of the fiscal quarter
ended September 30, 1999, giving effect to the Spin-Off and the other
transactions contemplated hereby as if they had occurred on such date,
which shall not be materially inconsistent with the pro forma financial
information and projections previously delivered to the Administrative
Agent and the Lenders.
(p) The Lenders shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety
exposures to which Holdings and the Subsidiaries may be subject after
giving effect to the Transactions, and with the plans of Holdings or
such Subsidiaries with respect thereto.
(q) There shall be no litigation or administrative proceeding
that would reasonably be expected to result in a Material Adverse
Effect.
(r) The Lenders shall have received a solvency letter
addressed to the Lenders or a confirmation from the firm providing such
solvency letter that it will be delivered to the Lenders promptly after
the Effective Date and prior to the completion of the Spin-Off, in form
and substance and from an independent evaluation firm satisfactory to
the Administrative Agent, together with such other evidence reasonably
requested by the Lenders, confirming the solvency of Holdings and the
Subsidiaries on a consolidated basis after giving effect to the
Transactions that are to occur on the Effective Date.
(s) The consummation of the Transactions shall not (a) violate
any applicable law, statute, rule or regulation or (b) conflict with,
or result in a default or event of default under, any material
agreement of Holdings or any of its Subsidiaries, after giving effect
to the Transactions that are to occur on the Effective Date.
(t) All governmental and third party approvals required in
connection with the Spin-Off and the other Transactions shall have been
obtained on terms satisfactory to the Administrative Agent, all
applicable appeal periods in connection with any such governmental
approvals shall have expired and there shall be no governmental or
judicial action, actual or threatened, that could reasonably be
expected to restrain, prevent or impose burdensome conditions on the
Transactions.
(u) The Lenders shall have received management's consolidated
financial projections for Holdings and the Subsidiaries for the fiscal
years 1999 through and including 2006, detailed on a quarter-by-quarter
basis for (a) the last fiscal quarter of the fiscal year 1999 and (b)
the fiscal year 2000, which projections shall reflect the Transactions
and include the written assumptions upon which such projections are
based, and such projections shall be reasonably satisfactory in all
respects to the Administrative Agent.
(v) Holdings shall have obtained at least one rating of the
credit facilities provided to the Borrower under this Agreement (after
giving effect to the Spin-Off) not lower than B+ (if such rating is
from S&P) or B1 (if such rating is from Moody's).
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on January 31, 2000 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02. Each Credit EventSECTION 4.02. Each Credit
Event. The obligation of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter
of Credit, is subject to receipt of the request therefor in accordance herewith
and to the satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
(c) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03, or in the case of a
Borrowing of a Swingline Loan, the Swingline Lender and the Agent shall
have received a notice requesting such Swingline Loan as required by
Section 2.04(b).
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
Affirmative Covenants ARTICLE V Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Holdings and the
Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information
SECTION 5.01. Financial Statements and Other Information. Holdings will
furnish to the Administrative Agent and each Lender:
(a) within 105 days after the end of each fiscal year of
Holdings, its audited consolidated balance sheet and related statements
of income, changes in stockholders' equity and cash flows as of the end
of and for such year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by
PricewaterhouseCoopers LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the
financial condition and results of operations of Holdings and the
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, accompanied by a certificate of said
accountants stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules
or guidelines);
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of Holdings, its consolidated
balance sheet and related statements of income, changes in
stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Holdings and
the consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto and (ii)
setting forth reasonably detailed calculations demonstrating compliance
with Sections 6.13, 6.14 and 6.15;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by Holdings, the Borrower or any other Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by Holdings to its
shareholders generally, as the case may be;
(e) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Holdings, the Borrower or any other Subsidiary, or
compliance with the terms of any Loan Document, as the Administrative
Agent or any Lender may reasonably request; and
(f) prior to the commencement of each fiscal year of Holdings,
a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for such fiscal
year and setting forth the assumptions used for purposes of preparing
such budget) and, promptly when available, any significant revisions of
such budget.
SECTION 5.02. Notices of Material EventsSECTION 5.02.
Notices of Material Events. Holdings and the Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting Holdings, the Borrower or any other Subsidiary
that, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect;
(c) (i) the occurrence of any Reportable Event with respect to
any Plan, (ii) the incurrence of Withdrawal Liability with respect to
any Multiemployer Plan or (iii) the receipt by Holdings or any member
of the Controlled Group of any notice concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization within the meaning
of Title IV of ERISA; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding CollateralSECTION 5.03.
Information Regarding Collateral. (a) Holdings and the Borrower will furnish to
the Collateral Agent prompt written notice of any change (i) in any Loan Party's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. Holdings and the Borrower agree not to effect or permit
any change referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for the Collateral Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral. Holdings
and the Borrower also agree promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, Holdings and the Borrower will deliver to the Administrative Agent
a certificate of a Financial Officer of the Borrower (i) setting forth the
information required pursuant to Section 1 of the Perfection Certificate or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Effective Date or the date of the
most recent certificate delivered pursuant to this Section and (ii) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Security Documents for a period of not
less than 18 months after the date of such certificate (except as noted therein
with respect to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of BusinessSECTION 5.04.
Existence; Conduct of Business. Each of Holdings and the Borrower will, and will
cause each of the Significant Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.04. Holdings and the
Borrower will, and will cause each Significant Subsidiary to, carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted.
SECTION 5.05. Payment of Taxes. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, pay its Tax
liabilities before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings and (b) Holdings, the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP.
SECTION 5.06. Maintenance of PropertiesSECTION 5.06.
Maintenance of Properties. Each of Holdings and the Borrower will, and will
cause each of the Subsidiaries to, maintain, preserve, protect and keep their
properties material to the conduct of their business in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that their businesses carried on in connection therewith may be
properly conducted at all times.
SECTION 5.07. InsuranceSECTION 5.07. Insurance. Holdings and
the Borrower will, and will cause each of the Subsidiaries to, maintain, with
financially sound and reputable insurance companies (a) insurance on all their
property in such amounts and covering such risks as is consistent with sound
business practice and customary with companies engaged in similar lines of
business and (b) all insurance required to be maintained pursuant to the
Security Documents. The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.
SECTION 5.08. Casualty and CondemnationSECTION 5.08. Casualty
and Condemnation. Holdings and the Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any material
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding and (b) will ensure that the Net
Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of this Agreement and the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit
RightsSECTION 5.09. Books and Records; Inspection and Audit Rights. Holdings and
the Borrower will, and will cause each of the Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. Holdings
and the Borrower will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to make
reasonable examinations and copies of the books of accounts and other financial
records of Holdings, the Borrower and each other Subsidiary, and to discuss the
affairs, finances and accounts of Holdings, the Borrower and each other
Subsidiary with, and to be advised as to the same by, their respective officers
upon reasonable notice and at such reasonable times and intervals as the Lenders
or the Administrative Agent may designate; provided that (a) any inspection by
any Lender shall be at such Lender's own expense and (b) the Lenders shall
coordinate the timing of their inspections through the Administrative Agent.
SECTION 5.10. Compliance with LawsSECTION 5.10. Compliance
with Laws. Holdings and the Borrower will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property (including ERISA,
Environmental Laws and the Interstate Commerce Act), except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of CreditSECTION
5.11. Use of Proceeds and Letters of Credit. Holdings and the Borrower will, and
will cause each of the Subsidiaries to, use the proceeds of the Loans and cause
Letters of Credit to be issued only for the purposes set forth in the recitals
to this Agreement. Holdings and the Borrower will not, nor will they permit any
Subsidiary to, use any of the proceeds of the Loans (a) for any purpose that
entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation U or X or (b) to make any
acquisition for which the board of directors of the target company has not given
its consent or approval.
SECTION 5.12. Additional SubsidiariesSECTION 5.12. Additional
Subsidiaries. If any additional Significant Subsidiary is formed or acquired
after the Effective Date, the Borrower will, within three Business Days after
such Significant Subsidiary is formed or acquired, notify the Administrative
Agent and the Lenders thereof and, within 30 days thereof, cause the Collateral
and Guarantee Requirement to be satisfied with respect to such Significant
Subsidiary (if it is a Subsidiary Loan Party) and with respect to any Equity
Interest in or Indebtedness of such Significant Subsidiary owned by or on behalf
of any Loan Party.
SECTION 5.13. Further AssurancesSECTION 5.13. Further
Assurances. (a) Holdings and the Borrower will, and will cause each Subsidiary
Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable law,
or which the Administrative Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties. Holdings and the Borrower
also agree to provide to the Collateral Agent, from time to time upon request,
evidence reasonably satisfactory to the Collateral Agent as to the perfection
and priority of the Liens created or intended to be created by the Security
Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by Holdings, the
Borrower or any other Subsidiary Loan Party after the Effective Date (other than
assets constituting Collateral under the Security Agreement that become subject
to the Lien of the Security Agreement upon acquisition thereof), Holdings and
the Borrower will notify the Administrative Agent and the Lenders thereof, and,
if requested by the Administrative Agent or the Required Lenders, will cause
such assets to be subjected to a Lien securing the Obligations and will take,
and cause the Subsidiary Loan Parties to take, such actions as shall be
necessary or reasonably requested by the Collateral Agent to grant and perfect
such Liens, including actions described in paragraph (a) of this Section, all at
the expense of the Loan Parties.
SECTION 5.14. Interest Rate ProtectionSECTION 5.14. Interest
Rate Protection. As promptly as practicable, and in any event within 90 days
after the Effective Date, the Borrower will enter into, and will maintain in
effect, one or more interest rate protection agreements for a period of not less
than two years after the Effective Date on such terms and with such parties as
shall be reasonably satisfactory to the Administrative Agent, the effect of
which shall be to fix or limit the interest cost to the Borrower with respect to
at least 50% of the outstanding Tranche A Term Loans and Tranche B Term Loans.
SECTION 5.15. Completion of Spin-Off. The Spin-Off, when and
if completed, will be completed in accordance with all applicable laws and on
the terms and with the results consistent in all material respects with (a) the
information set forth in Stilwell's Form 10 as heretofore made available to the
Lenders and (b) the pro forma financial information and projections delivered to
the Administrative Agent and the Lenders prior to the date hereof.
ARTICLE VI
Negative Covenants ARTICLE VI Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity SecuritiesSECTION
6.01. Indebtedness; Certain Equity Securities. (a) Holdings and the Borrower
will not permit any Subsidiary to create, incur, assume or permit to exist any
Indebtedness, except:
(i) the Obligations;
(ii) prior to the assumption of the obligations under the
Assumable Facilities by Stilwell, Indebtedness under the Assumable
Facilities;
(iii) other Indebtedness existing on the date hereof and
described in Schedule 6.01 and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal
amount thereof or result in an earlier maturity date or decreased
weighted average life thereof;
(iv) the Permitted Subordinated Debt, and the note issued
pursuant to the Grupo TFM Phase II Investment;
(v) Indebtedness owed to Holdings, the Borrower or any other
Subsidiary;
(vi) Indebtedness incurred by Subsidiaries to finance the
acquisition, construction or improvement of any fixed or capital assets
used in the ordinary course of their railroad transportation business,
which Indebtedness is secured solely by a Lien on the assets being
acquired, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof; provided that the aggregate principal amount of
the Indebtedness permitted by this clause (vi) and incurred during any
fiscal year of Holdings does not exceed $30,000,000;
(vii) Indebtedness of any Person that becomes a Subsidiary
after the date hereof; provided that such Indebtedness exists at the
time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Subsidiary; and
(viii) other unsecured Indebtedness not expressly permitted by
clauses (i) through (vii) above; provided that the sum of (A) the
Indebtedness permitted by this clause (viii) and by clause (vii) above,
(B) the aggregate principal amount of the outstanding Indebtedness of
Holdings secured by Liens permitted by clauses (viii) and (x) of
Section 6.02(a) and (C) the Attributable Debt in connection with all
Sale and Leaseback Transactions of Holdings and the Subsidiaries
permitted by clause (c) of Section 6.03 does not at any time exceed 5%
of Consolidated Net Worth.
(b) Holdings will not permit Caymex, NAFTA Rail, Canama or SCC
Holdings, Inc. to create, incur, assume or permit to exist any Indebtedness,
other than Indebtedness owed by Caymex to Holdings and Indebtedness incurred in
connection with the Grupo TFM Phase II Investment.
(c) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, issue any preferred stock or other preferred Equity
Interests other than preferred stock of Holdings that is not by its terms or by
the terms of any agreement or instrument subject to any redemption, repurchase
or similar requirement, whether absolute, at the option of any holder thereof or
upon the occurrence of any event or contingency which could occur prior to the
final maturity of all the Loans.
SECTION 6.02. LiensSECTION 6.02. Liens. (a) Holdings will not,
and will not permit any Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(i) Liens created under the Loan Documents or permitted under
any other Loan Document;
(ii) Liens for taxes, assessments or governmental charges or
levies on its 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;
(iii) 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 (a) which are
being contested in good faith by appropriate proceedings or (b) for
which Holdings or any of its Subsidiaries, as applicable, have posted a
bond supported only by cash;
(iv) 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;
(v) 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 any of Holdings or 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 Holdings, the
Borrower or the Subsidiaries;
(vi) Liens existing on the date hereof and described in
Schedule 6.02 hereto; provided that such Liens shall secure only those
obligations that they secure on the date hereof;
(vii) any Lien existing on any property or asset prior to the
acquisition thereof by Holdings or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
provided that (A) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (B) such Lien shall not apply to any other property
or assets of Holdings or any Subsidiary and (C) such Lien shall secure
only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(viii) Liens on fixed or capital assets acquired, constructed
or improved by Holdings or any Subsidiary; provided that (A) such Liens
secure Indebtedness permitted by clause (vi) of Section 6.01(a) (or
Indebtedness of Holdings that would be permitted if such clause (vi)
were applicable to Holdings as well as to the Subsidiaries), (B) such
Liens and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does
not exceed the cost of acquiring, constructing or improving such fixed
or capital assets and (D) such Liens shall not apply to any other
property or assets of Holdings or any Subsidiary;
(ix) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and
(x) Liens not expressly permitted by clauses (i) through
(ix); provided that the sum of (A) the Indebtedness permitted by
clauses (vii) and (viii) of Section 6.01(a), (B) the aggregate
principal amount of the outstanding Indebtedness of Holdings secured by
Liens permitted by this clause or by clause (viii) above and (C) the
Attributable Debt in connection with all Sale and Leaseback
Transactions of Holdings and the Subsidiaries permitted by clause (c)
of Section 6.03 does not at any time exceed 5% of Consolidated Net
Worth.
SECTION 6.03. Sale and Leaseback TransactionsSECTION 6.03.
Sale and Leaseback Transactions. Holdings will not, and will not permit any of
its Subsidiaries to, enter into any Sale and Leaseback Transaction other than:
(a) Sale and Leaseback Transactions involving locomotives,
rolling stock or other equipment with Southern Capital Corporation,
LLC;
(b) the GE Capital Sale Leaseback; and
(c) any other Sale and Leaseback Transaction if (i) at the
time of such Sale and Leaseback Transaction no Default shall have
occurred and be continuing, (ii) the proceeds from the sale of the
subject property shall be at least equal to its fair market value on
the date of such sale and (iii) the sum of (A) the Indebtedness
permitted by clauses (vii) and (viii) of Section 6.01(a), (B) the
aggregate principal amount of the outstanding Indebtedness of Holdings
secured by Liens permitted by clauses (viii) and (x) of Section 6.02(a)
and (C) the Attributable Debt in connection with all Sale and Leaseback
Transactions of Holdings and the Subsidiaries permitted by this clause
(c) does not at any time exceed 5% of Consolidated Net Worth.
SECTION 6.04. Mergers and ConsolidationsSECTION 6.04. Mergers
and Consolidations. (a) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing (i) any wholly owned
Subsidiary may merge into Holdings or the Borrower in a transaction in which
Holdings or the Borrower is the surviving corporation, (ii) any Subsidiary may
merge into or consolidate with any other Subsidiary if (A) the surviving or
resulting entity is a Subsidiary and the percentage of the Equity Interests of
such surviving or resulting entity owned directly or indirectly by Holdings is
not less than the percentage of the Equity Interests so owned in either of the
constituent corporations and (B) if either of such constituent Subsidiaries is a
Subsidiary Loan Party, the surviving or resulting entity shall be a Subsidiary
Loan Party, and (iii) any Subsidiary may liquidate into its parent corporation
or corporations or dissolve if Holdings or the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of Holdings or the
Borrower.
(b) Holdings and the Borrower will not permit Caymex to engage
in any business or activity other than the ownership of all of the outstanding
Equity Interests of NAFTA Rail and Canama and activities incidental thereto.
Holdings and the Borrower will not permit NAFTA Rail to engage in any business
or activity other than the ownership of Equity Interests of Grupo TFM and
activities incidental thereto. Holdings and the Borrower will not permit Canama
to engage in any business or activity other than the ownership of Equity
Interests of Panama Canal Railway Company and activities incidental thereto.
SECTION 6.05. Asset SalesSECTION 6.05. Asset Sales. Holdings
and the Borrower will not, and will not permit any of the Subsidiaries to, sell,
transfer, lease or otherwise dispose of any asset, including any Equity Interest
owned by it, nor will Holdings or the Borrower permit any of the Subsidiaries to
issue any additional Equity Interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to Holdings or a
Subsidiary; provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.06;
(c) sales, transfers and dispositions of assets necessary to
complete the Spin-Off;
(d) the GE Capital Sale Leaseback;
(e) the sale referred to in the definition of "Grupo TFM Phase
II Investment"; and
(f) sales, transfers and other dispositions of assets that are
not permitted by any of the preceding clauses; provided that (i) the
Net Proceeds from any such sale, transfer or other disposition are paid
to the Lenders to the extent required by Section 2.11(c) and (ii) such
assets are sold, transferred or otherwise disposed of for fair market
value.
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (b), (c) and (d) above) shall be
made for fair value.
SECTION 6.06. Transactions with AffiliatesSECTION 6.06.
Transactions with Affiliates. Neither Holdings nor the Borrower will, nor will
they permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of their respective
Affiliates, except (a) transactions in the ordinary course of business at prices
and on terms and conditions which, taken as a whole, are not less favorable to
Holdings, the Borrower or such Subsidiary than would prevail in arm's-length
transactions with unrelated third parties, (b) transactions between or among
Holdings, the Borrower and the Subsidiary Loan Parties not involving any other
Affiliate and (c) any Restricted Payment permitted by Section 6.10.
SECTION 6.07. Certain Other AgreementsSECTION 6.07. Certain
Other Agreements. (a) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, enter into or permit to exist any agreement or other
arrangement that directly or indirectly (through the application of financial
covenants or otherwise) prohibits or restricts (i) the ability of Holdings, the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets or (ii) the ability of any Subsidiary to pay dividends
or other distributions with respect to its Equity Interests or to make or repay
loans or advances to Holdings or any other Subsidiary or to Guarantee
Indebtedness of Holdings or any other Subsidiary; provided that (A) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (B) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.07 (but shall
apply to any amendment or modification expanding the scope of any such
restriction or condition), (C) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale if such restrictions and conditions apply only to
the Subsidiary that is to be sold and such sale is permitted hereunder, (D)
clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (E) clause (i) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
(b) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, directly or indirectly, enter into or be bound by any
agreement or instrument containing any provision restricting the incurrence of
Indebtedness or governing Holdings's and the Subsidiaries' financial condition
if such provision is not contained in this Agreement or is more restrictive than
the analogous provision contained in this Agreement unless (i) the Borrower has
delivered a copy of such document to the Administrative Agent not less than 10
Business Days prior to executing the same and (ii) Holdings and the Borrower
enter into an amendment to this Agreement to add the more restrictive provision
or to conform the analogous provision of this Agreement to such more restrictive
provision.
SECTION 6.08. Investments, Loans, Advances, Guarantees and
AcquisitionsSECTION 6.08. Investments, Loans, Advances, Guarantees and
Acquisitions. Holdings and the Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests in or evidences of Indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit (all the foregoing
being collectively called "Investments"), except:
(a) Permitted Investments;
(b) Investments existing on the date hereof;
(c) Investments in Loan Parties;
(d) loans or advances to Holdings;
(e) Guarantees of Indebtedness of Persons other than
Subsidiaries constituting Indebtedness permitted by Section 6.01;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) Investments consisting of loans and advances to employees
for moving, entertainment, travel and similar expenses; provided that
the aggregate outstanding amount of such loans and advances shall not
exceed $1,000,000;
(h) Guarantees for the benefit of, or capital contributions or
loans to, Texas Mexican Railway Company; provided that the aggregate
amount of such capital contributions, loans and guaranteed Indebtedness
shall not exceed $25,000,000;
(i) the Grupo TFM Phase I Investment and the Grupo TFM Phase
II Investment; and
(j) Investments not expressly permitted by clauses (a) through
(i); provided that the aggregate amount all such Investments shall not
at any time exceed $5,000,000.
SECTION 6.09. Hedging AgreementsSECTION 6.09. Hedging
Agreements. Holdings and the Borrower will not, and will not permit any of the
Subsidiaries to, enter into any Hedging Agreement other than (a) Hedging
Agreements required by Section 5.14 and (b) Hedging Agreements entered into in
the ordinary course of business to hedge or mitigate risks to which Holdings,
the Borrower or the Subsidiaries shall be exposed in the conduct of their
businesses, and not for speculative purposes.
SECTION 6.10. Restricted Payments; Certain Payments of
IndebtednessSECTION 6.10. Restricted Payments; Certain Payments of Indebtedness.
(a) Neither Holdings nor the Borrower will, nor will they permit any Subsidiary
to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except (i) Holdings may declare and pay dividends with respect to its capital
stock payable solely in additional shares of its common stock, (ii) Subsidiaries
may declare and pay dividends ratably with respect to their capital stock, (iii)
Holdings may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of Holdings and
its Subsidiaries, and (iv) Holdings may pay cash dividends in respect of shares
of its Existing Preferred Stock in amounts which are not significantly greater
than the amounts paid in respect of such shares during the fiscal year ended
December 31, 1999; provided that no such payments shall be made under this
clause (iv) upon the occurrence and during the continuance of an Event of
Default pursuant to clauses (a), (h) or (i) of Article VII.
(b) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, make or agree to pay or make, directly or indirectly,
any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Indebtedness
(other than the Obligations), or any payment or other distribution (whether in
cash, securities or other property) on account of the purchase, redemption,
retirement, acquisition, cancellation, defeasance or termination of any
Indebtedness, except:
(i) scheduled or mandatory payments of the principal of or
premium or interest on Indebtedness, other than payments in respect of
the Permitted Subordinated Debt or other Indebtedness subordinated to
the Obligations that shall be prohibited by the subordination
provisions thereof;
(ii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iii) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(iv) payments in respect of the Existing Notes and
Indebtedness under the Existing Credit Agreements; and
(v) payments in respect of Indebtedness owed to Holdings or
any Subsidiary.
SECTION 6.11. Amendment of Material DocumentsSECTION 6.11.
Amendment of Material Documents. Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary or, to the extent within their control, Grupo
TFM, to, amend, modify or waive any of its rights under (a) any indenture or
other agreement or instrument governing Material Indebtedness or (b) any other
material agreement or instrument, in each case in a manner that would be
materially adverse to the rights or interests of the Lenders.
SECTION 6.12. Ownership of Caymex, NAFTA Rail and Grupo
TFMSECTION 6.12. Ownership of Caymex, NAFTA Rail and Grupo TFM. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, permit (a) any
Equity Interest in Caymex to be owned by any Person other than (i) Holdings or
(ii) any other Loan Party that shall have pledged all Equity Interests in Caymex
owned by it pursuant to the Pledge Agreement, (b) any Equity Interest in NAFTA
Rail to be owned by any Person other than Caymex or (c) any Equity Interest in
Grupo TFM, so long as it is owned directly or indirectly by Holdings, to be
owned by any Person other than NAFTA Rail.
SECTION 6.13. Interest Expense Coverage RatioSECTION 6.13.
Interest Expense Coverage Ratio. Holdings will not permit the ratio of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense, in each case for any
period of four consecutive fiscal quarters ending on any date during any period
set forth below, to be less than the ratio set forth below opposite such period:
Period Ratio
Effective Date to March 31, 2000 1.70 : 1.00
April 1, 2000 to September 30, 2000 1.75 : 1.00
October 1, 2000 to December 31, 2000 1.85 : 1.00
January 1, 2001 to December 31, 2002 2.00 : 1.00
January 1, 2003 to December 31, 2003 2.25 : 1.00
January 1, 2004 and thereafter 2.50 : 1.00
SECTION 6.14. Leverage Ratio
SECTION 6.14. Leverage Ratio. Holdings will not permit the Leverage Ratio as
of any date during any period set forth below to exceed the ratio set forth
opposite such period:
Period Ratio
Effective Date to March 31, 2000 5.80 : 1.00
April 1, 2000 to June 30, 2000 5.75 : 1.00
July 1, 2000 to December 31, 2000 5.50 : 1.00
January 1, 2001 to December 31, 2001 5.00 : 1.00
January 1, 2002 to December 31, 2002 4.75 : 1.00
January 1, 2003 to December 31, 2003 4.25 : 1.00
January 1, 2004 to December 31, 2004 3.75 : 1.00
January 1, 2005 and thereafter 3.50 : 1.00
SECTION 6.15. Capital ExpendituresSECTION 6.15. Capital
Expenditures. Holdings will not permit the aggregate amount of Capital
Expenditures during any fiscal year of Holdings during any period set forth
below to exceed the amount set forth opposite such period:
Period Amount
Effective Date to December 31, 2001 $110,000,000
January 1, 2002 to December 31, 2002 $ 95,000,000
January 1, 2003 to December 31, 2003 $100,000,000
January 1, 2004 to December 31, 2004 $105,000,000
January 1, 2005 to December 31, 2005 $110,000,000
January 1, 2006 and thereafter $115,000,000
ARTICLE VII
Events of Default ARTICLE VII Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of Holdings, the Borrower or any other Subsidiary in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been materially false when made or
deemed made;
(d) Holdings or the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.04
(with respect to the existence of Holdings or the Borrower) or 5.11 or
in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 15 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) Holdings, the Borrower or any other Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice) the holder or
holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall
not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of Holdings, the Borrower or
any other Subsidiary or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any other
Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) Holdings, the Borrower or any other Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any other
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) Holdings, the Borrower or any other Subsidiary shall
become unable, admit in writing its inability or fail generally to pay
its debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against
Holdings, the Borrower, any other Subsidiary or any combination thereof
and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy
upon any assets of Holdings, the Borrower or any other Subsidiary to
enforce any such judgment;
(l) the Unfunded Liabilities of all Plans shall exceed in the
aggregate $10,000,000, or any Reportable Event shall occur in
connection with any Plan or any Withdrawal Liability in excess of
$10,000,000 shall be incurred with respect to any Multiemployer Plan or
the Borrower or any member of the Controlled Group has received any
notice concerning the imposition of Withdrawal Liability in excess of
$10,000,000 or a determination that a Multiemployer Plan with respect
to which the potential Withdrawal Liability of the Borrower or any
member of the Controlled Group would exceed $10,000,000 is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA;
(m) any Lien purported to be created under any Security
Document with respect to any material portion of the Collateral shall
cease to be, or shall be asserted by any Loan Party not to be, a valid
and perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except (i) as a result of the sale or
other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (ii) as a result of the
Collateral Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Collateral Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to Holdings or
the Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to Holdings or the Borrower
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent ARTICLE VIII The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto. For
purposes of this Article VIII and for the purposes of Article IX, all references
to the Administrative Agent are deemed to include references to the Collateral
Agent.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
other Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Holdings, the Borrower or any other
Subsidiary that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for Holdings or the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous ARTICLE IX Miscellaneous
SECTION 9.01. NoticesSECTION 9.01. Notices. Except in the case
of notices and other communications expressly permitted to be given by
telephone, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to it at 114 West 11th
Street, Kansas City, Missouri 64105-1808, Attention of the Vice
President and Chief Financial Officer (Telecopy No. (816) 983-1192),
with a copy to the Senior Vice President and General Counsel (Telecopy
No. (816) 983-1227);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, New York 10081, Attention of Margaret Swales (Telecopy
No. (212) 552-5662), with a copy to Chase Securities Inc., 10 South
LaSalle Street Chicago, IL 60603, Attention of Jon Hinard (Telecopy No.
(312) 807-4550);
(c) if to the Issuing Bank, to it at The Chase Manhattan Bank,
Attention of Margaret Swales (Telecopy No. (212) 552-5662);
(d) if to the Swingline Lender, to it at, Loan and Agency
Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
York 10081, Attention of Margaret Swales (Telecopy No. (212) 552-5662);
and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; AmendmentsSECTION 9.02. Waivers;
Amendments. (a) No failure or delay by the Administrative Agent, the Issuing
Bank or any Lender in exercising any right or power hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the maturity of any Loan, or any scheduled date of
payment of the principal amount of any Term Loan under Section 2.10, or the
required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) change any of the provisions of this Section or the percentage set
forth in the definition of "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Holdings or any Subsidiary Loan Parties that are substantial in relation to
Holdings and the Subsidiaries taken as a whole from their Guarantees under the
Guarantee Agreement (except as expressly provided by Section 9.14), or limit
their liability in respect of such Guarantee, without the written consent of
each Lender, (vii) release all or any substantial part of the Collateral from
the Liens of the Security Documents without the written consent of each Lender
(except as expressly provided by Section 9.14), (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those of Lenders holding Loans of any other Class, without the written consent
of Lenders holding a majority in interest of the outstanding Loans and unused
Commitments of the Class adversely affected or receiving a lesser benefit or
(ix) change the rights of the Tranche B Lenders to decline mandatory prepayments
as provided in Section 2.11 without the written consent of Lenders holding a
majority of the outstanding Tranche B Loans; provided further that (A) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender without the prior written consent of the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be,
and (B) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Lenders of one
Class, but not the other Lenders, may be effected by an agreement or agreements
in writing entered into by Holdings, the Borrower and requisite percentage in
interest of the affected Class of Lenders that would be required to consent
thereto under this Section if such Class of Lenders were the only Class of
Lenders hereunder at the time. Notwithstanding the foregoing, any provision of
this Agreement may be amended by an agreement in writing entered into by
Holdings, the Borrower, the Required Lenders and the Administrative Agent (and,
if their rights or obligations are affected thereby, the Issuing Bank and the
Swingline Lender) if (i) by the terms of such agreement the Commitment of each
Lender not consenting to the amendment provided for therein shall terminate upon
the effectiveness of such amendment and (ii) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Loan made by it and all other amounts
owing to it or accrued for its account under this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage WaiverSECTION 9.03.
Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and the
Collateral Agent and their Affiliates, including the reasonable fees, charges
and disbursements of counsel, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral Agent,
the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower agrees to indemnify the Administrative Agent,
the Collateral Agent, the Issuing Bank, each Lender and each of their respective
directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (i) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the negligence or wilful misconduct of such Indemnitee and (ii) have not,
in whole or in part, arisen out of or resulted from any act, or omission to act,
of Holdings, the Borrower or any of their Affiliates.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposure, outstanding Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither
Holdings nor the Borrower shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and AssignsSECTION 9.04. Successors
and Assigns. (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
a Related Fund of any Lender, each of the Borrower and the Administrative Agent
(and, in the case of an assignment of all or a portion of a Revolving Commitment
or any Lender's obligations in respect of its LC Exposure or Swingline Exposure,
the Issuing Bank and the Swingline Lender) must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld or
delayed), (ii) except in the case of an assignment to a Lender, an Affiliate of
a Lender or a Related Fund of any Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment or Loans, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, except that this clause (iii) shall not be construed to prohibit
the assignment of a proportionate part of all the assigning Lender's rights and
obligations in respect of one or more, but not all, Classes of its Commitments
or Loans, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance together with a processing and
recordation fee of $2,500 (except in the case of an assignment to a Lender or an
Affiliate of a Lender or a Related Fund of a Lender), and (v) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default under clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and Holdings, the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Holdings, the Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.17(e), and to be subject to Section 2.19, as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC") of such Granting Lender, identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to Section
2.01, provided that (i) nothing herein shall constitute a commitment to make any
Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof (iii) such Granting
Lender's other obligations under this Agreement shall remain unchanged, (iv)
such Granting Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (v) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Granting Lender in connection with such Granting Lender's rights and obligations
under this Agreement. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by the Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the related Granting Lender). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof. In addition, notwithstanding anything to
the contrary contained in this Section 9.04 or in Section 9.12, any SPC may (i)
with notice to, but without the prior written consent of, the Borrower or the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to its Granting Lender or to any
financial institutions providing liquidity and/or credit facilities to or for
the account of such SPC to fund the Loans made by such SPC or to support the
securities (if any) issued by such SPC to fund such Loans and (ii) disclose on a
confidential basis, to the extent such disclosure would be permitted under
Section 9.12 as if such SPC were a Lender, any non-public information relating
to its Loans to any rating agency, commercial paper dealer or provider of a
surety, guarantee or credit or liquidity enhancement to such SPC.
SECTION 9.05. SurvivalSECTION 9.05. Survival. All covenants,
agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; EffectivenessSECTION
9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the other Loan Documents and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. SeverabilitySECTION 9.07. Severability. Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of SetoffSECTION 9.08. Right of Setoff. If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of ProcessSECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against Holdings, the Borrower or its properties in
the courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIALSECTION 9.10. WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HeadingsSECTION 9.11. Headings. Article and
Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12. ConfidentialitySECTION 9.12. Confidentiality.
Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors as
need to know such information in connection with the servicing and protection of
its interests in respect of its Loans and Commitments, the Loan Documents and
the Transactions (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority including the National Association of Insurance
Commissioners, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower (h) to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty of professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section 9.12); provided no disclosure may be made under this clause (h) of any
information with respect to the Assumable Facilities and any documents supplied
to any such party shall be redacted in a manner reasonably acceptable to
Holdings or (i) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than Holdings or the Borrower. For the purposes of
this Section, "Information" means all information received from Holdings or the
Borrower relating to Holdings or the Borrower or its business, other than any
such information that is available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by Holdings or the
Borrower; provided that, in the case of information received from Holdings or
the Borrower after the date hereof, such information is clearly identified at
the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Interest Rate LimitationSECTION 9.13. Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan, together with all fees, charges and
other amounts which are treated as interest on such Loan under applicable law
(collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
SECTION 9.14. Release of Liens and GuaranteesSECTION 9.14.
Release of Liens and Guarantees. In the event that Holdings or any Subsidiary
sells, transfers or otherwise disposes of all or any portion of any of the
Equity Interests, assets or property owned by Holdings or such Subsidiary in a
transaction not prohibited by this Agreement, the Administrative Agent and the
Collateral Agent shall promptly (and the Lenders hereby authorize and instruct
the Administrative Agent and the Collateral Agent to) take such action and
execute any such documents as may be reasonably requested by the Borrower to
release any Liens created by any Loan Document in respect of such Equity
Interests, assets or property, including the release and satisfaction of record
of any mortgage or deed of trust granted in connection herewith, and, in the
case of a disposition of all or substantially all the Equity Interests or assets
of any Subsidiary that is a Loan Party, to terminate such Subsidiary's
obligations under the Guarantee Agreement and each other Loan Document. In
addition, the Administrative Agent and the Collateral Agent will take such
actions as are reasonably requested by the Borrower to terminate the Liens and
security interests created by the Loan Documents when all the Obligations have
been paid in full and all Letters of Credit and Commitments have been
terminated. The Borrower agrees to pay all out-of-pocket expenses of the
Administrative Agent and the Collateral Agent in connection with releases of
Liens and obligations under the Guarantee Agreement provided for in this
Section.
21042580\V-1
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by
/s/ Anthony P. McCarthy
Name: Anthony P. McCarthy
Title: Vice President and Treasurer
THE KANSAS CITY SOUTHERN RAILWAY COMPANY,
by
/s/ Robert H. Berry
Name: Robert H. Berry
Title: Designated Person
THE CHASE MANHATTAN BANK, individually and as Administrative
Agent, Issuing Bank and Swingline Lender,
by
/s/ Laurie B. Perper
Name: Laurie B. Perper
Title: Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ F. C. H. Ashby
Name: F. C. H. Ashby
Title: Senior Manager Loan
Operations
FLEET NATIONAL BANK,
by
/s/ Dexter Freeman
Name: Dexter Freeman
Title: Director
BANK OF TOKYO-MITSUBISHI TRSUT COMPANY,
by
/s/ Joseph P. Devoe
Name: Joseph P. Devoe
Title: Vice President
BANK ONE, N.A. (MAIN OFFICE CHICAGO),
by
/s/ Christina Jamieson
Name: Christina Jamieson
Title: Senior Vice President
CREDIT SUISSE FIRST BOSTON,
by
/s/ Joel Glodowski
Name: Joel Glodowski
Title: Managing Director
by
/s/ Douglas E. Maher
Name: Douglas E. Maher
Title: Vice President
MERRILL LYNCH CAPITAL CORPORATION, as a Lender
by
/s/ Brian E. O'Callahan
Name: Brian E. O'Callahan
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Len E. Meyer
Name: Len E. Meyer
Title: Vice President
ABN AMRO BANK N.V.,
by
/s/ David J. Thomas
Name: David J. Thomas
Title: Group Vice President
by
/s/ Gerald F. Mackin
Name: Gerald F. Mackin
Title: Vice President
THE BANK OF NEW YORK,
by
/s/ John-Paul Marotta
Name: John-Paul Marotta
Title: Vice President
FIRST UNION NATIONAL BANK,
by
/s/ Deepak Chandrashekar
Name: Deepak Chandrashekar
Title: Associate
THE FUJI BANK, LIMITED,
by
/s/ Peter L. Chinnici
Name: Peter L. Chinnici
Title: Senior Vice President & Group Head
MERCANTILE BANK,
by
/s/ Barry P. Sullivan
Name: Barry P. Sullivan
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
by
/s/ T. Rodney Sirmons
Name: T. Rodney Sirmons
Title: Manager-Operations
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
by
/s/ Mike Hampton
Name: Mike Hampton
Title: Assistant Vice President
UMB BANK, N.A.,
by
/s/ Terry Dierks
Name: Terry Dierks
Title: Senior Vice President
SIAM COMMERCIAL BANK PCL, NEW YORK AGENCY,
by
/s/ Thawee Kotchavong
Name: Thawee Kotchavong
Title: Assistant General Manager
Systems & Operations
by
/s/ David I. Ramos
Name: David I. Ramos
Title: Assistant General Manager
Corporate Finance & Treasury
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.,
by
/s/ Paul Travers
Name: Paul Travers
Title: Director
MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC.,
by
/s/ Paul Travers
Name: Paul Travers
Title: Director
KZH ING-1 LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KZH ING-2 LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KZH ING-3 LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
CANADIAN IMPERIAL BANK OF COMMERCE,
by
/s/ William M. Swenson
Name: William M. Swenson
Title: Authorized Signatory
MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST,
by
/s/ Sheila A. Finnerty
Name: Sheila A. Finnerty
Title: Senior Vice President
KZH CRESCENT LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KZH CRESCENT-3 LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (E)
By: TCW Asset Management Company as Attorney-in-Fact,
by
/s/ Mark L. Gold
Name: Mark L. Gold
Title: Managing Director
by
/s/ Justin L. Driscoll
Name: Justin L. Driscoll
Title: Senior Vice President
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: TCW Asset Management Company, its Investment Advisor,
by
/s/ Mark L. Gold
Name: Mark L. Gold
Title: Managing Director
by
/s/ Justin L. Driscoll
Name: Justin L. Driscoll
Title: Senior Vice President
KZH LANGDALE LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
METROPOLITAN LIFE INSURANCE COMPANY,
by
/s/ James R. Dingler
Name: James R. Dingler
Title: Director
THOROUGHBRED LIMITED
PARTNERSHIP I
by Appaloosa Management L.P.
its General Partner
by Appaloosa Partners Inc.
its General Partner,
by
/s/ James E. Bolin
Name: James E. Bolin
Title: Vice President
CYPRESSTREE SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company, Inc. as
Portfolio Manager,
by
/s/ Timothy M. Barns
Name: Timothy M. Barns
Title: Managing Director
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company, Inc. as
Portfolio Manager,
by
/s/ Timothy M. Barns
Name: Timothy M. Barns
Title: Managing Director
CYPRESSTREE INVESTMENT FUND, LLC
By: CypressTree Investment Management Company, Inc. its
Managing Member,
by
/s/ Timothy M. Barns
Name: Timothy M. Barns
Title: Managing Director
KZH CYPRESSTREE-1 LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
FRANKLIN FLOATING RATE TRUST,
by
/s/ Chauncy Lufkin
Name: Chauncy Lufkin
Title: Vice President
NEW YORK LIFE INSURANCE COMPANY,
by
/s/ Anthony Malloy
Name: Anthony Malloy
Title: Director
OLYMPIC FUNDING TRUST, SERIES
1999-1,
by
/s/ Kelly C. Walker
Name: Kelly C. Walker
Title: Authorized Agent
KZH RIVERSIDE LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KEMPER FLOATING RATE FUND,
by
/s/ Mark E. Wittnebel
Name: Mark E. Wittnebel
Title: Senior Vice President
GALAXY CLO 1999-1 LTD.,
By: SAI Investment Adviser, Inc. Its Collateral Manager
by
/s/ Lynn A. Hopton
Name: Lynn A. Hopton
Title: Vice President
BAVARIA TRR CORPORATION,
by
/s/ Frank B. Bilotta
Name: Frank B. Bilotta
Title: Vice President
THE TRAVELERS INSURANCE COMPANY,
by
/s/ Robert M. Mills
Name: Robert M. Mills
Title: Investment Officer
TRAVELERS CORPORATE LOAN FUND INC.
By: Travelers Asset Management International Corporation,
by
/s/ Robert M. Mills
Name: Robert M. Mills
Title: Investment Officer
WINGED FOOT FUNDING TRUST,
by
/s/ Kelly C. Walker
Name: Kelly C. Walker
Title: Authorized Agent
KZH SHOSHONE LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KZH STERLING LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
PINEHURST TRADING, INC.,
by
/s/ Kelly C. Walker
Name: Kelly C. Walker
Title: Vice President
KZH WATERSIDE LLC,
by
/s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Capital Management, LLC, a Delaware limited
liability company, its authorized signatory,
by
/s/ Jon C. Heiny
Name: Jon C. Heiny
Title: Counsel
by
/s/ James C. Fifield
Name: James C. Fifield
Title: Counsel
STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY,
by
/s/ Brian W. Good
Name: Brian W. Good
Title: Vice President,
Stein Roe & Farnham Incorporated,
as Advisor to the Stein Roe Floating
Rate Limited Liability Company
Schedule 1
MORTGAGED PROPERTY - NON-TRACK REAL ESTATE FOR
KANSAS CITY SOUTHERN INDUSTRIES, INC.
FINANCING ARRANGED BY
THE CHASE MANHATTAN BANK - JANUARY 2000*
* Note that certain values listed below are replacement insurance values,
and, as such, do not purport to reflect the fair market value or appraised
value of the property.
- ----------------------------------------------------------------------------------------------------------------------------
No. City County StateDescription Legal Any Owning Value Fed ID Former To be Title
Leases?Entity # PropertyMortgaged? Insurance
No.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
1. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
2. 114 W. 11th Kansas Jackson MO Office YES KCSR Southern $2,200,0044-6005823 At Closing YES
St. City Building and Development
/8 story KCSI Corp.
leases
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
3. Intentionally Omitted (formerly the 1020 3 N/A N/A
Wyandotte Parking Garage)
- ----------------------------------------------------------------------------------------------------------------------------
4.
- --------------------------------------------------------------------------------------------------------------------------
Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
5. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
6. Pittsburg PittsburgCrawfordKS Repair NO KCSR $28,360,144-6000732 Post No
Yard Facility and (replacement Closing.
Maintenance value
Buildings/ per
107,800 sq. insurance
ft. report)
Machine shop
$1,191,120
Store room
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
7. Heavener Yard Heavener LeFlore OK Yard Office, NO KCSR $986,245 44-6000733 Post No
small office Closing
building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
8. Leesville LeesvilleVernoa LA Yard Office NO KCSR $826,672 44-6000751 Post No
Yard Closing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
9. Mossville MossvilleCalcasieLA Yard Office NO KCSR $698,497 44-6000748 Post No
Yard Closing.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
10. Spindletop Beaumont JeffersoTX Yard Office NO KCSR $1,654,9744-6000750 Post No
Yard Closing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
11. Port Arthur Port JeffersoTX Yard Office NO KCSR $1,677,6444-6000749 Post No
Yard Arthur Closing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
12. Baton Rouge Baton East LA Office YES KCSR 44-600074, At Closing Yes
Yard Rouge Baton Building/ 52,53
Rouge 15,000 sq.
Parish ft. 1401 Foss
St $5,947,911
Depot Office. $1,083,516
Mechanical
Building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
13. New Orleans ShrewsburJeffersoLA Freight House NO KCSR $8,393,6244-6000754, Post No
Yard 55, 63 Closing
Engine House $1,813,310
Intermodal $700,000
Facility
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
14. Old Shell ShrewsburJeffersoLA Land - YES Rice-Card$500,000 44-60110491 At Closing No
Building Intermodal
Property storage
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
15. Zacha Jet Dallas Dallas TX Intermodal NO KCSR $20,000,044-6000757, 68 Post No
Facility and Closing
other
assorted
property
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
16. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
17. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
18. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
19. Pearl Yard Jackson Rankin MS Intermodal NO KCSR $10,000,044-6000765 Post No
Facility Closing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
20. Sallisaw Yard Sallisaw Sequoya OK Intermodal NO KCSR $1,000,0044-6000767 Post No
Facility Closing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
21. Deramus Yard N. Caddo LA General Yes KCSR $7,721,599 5 At Closing Yes
Shreveport Office Bldg
4601
Shreveport -
Blanchard
Highway
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Customer KCSR $2,000,0044-6000758 At Closing Yes
Service Center FMV
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Car Shop KCSR $8,306,3744-6000758 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Diesel KCSR $4,834,3944-6000758 At Closing Yes
Service
Building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Division KCSR $2,158,5444-6000758 At Closing Yes
Store Room
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Diesel Fuel KCSR $1,875,2544-6000758 At Closing Yes
Tanks
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Wheel Shop KCSR $1,789,4044-6000758 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Cafeteria KCSR $1,671,4844-6000758 At Closing Yes
Building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
KCST Building KCSR $1,191,8444-6000758 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Yard Office KCSR $958,145 44-6000758 At Closing Yes
500 N.
Lakeshore Dr.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Truck Garage KCSR $917,292 44-6000758 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Running KCSR $912,108 44-6000758 At Closing Yes
Repair
Building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Sand Blast KCSR $709,030 44-6000758 At Closing Yes
Building
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Diesel Shop KCSR $14,723,744-6000758 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Intermodal KCSR $5,000,0044-6000758 At Closing Yes
Facility 4365 Trans
Blanchard Road Service
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
22. Piggly N. Caddo LA Warehouse/ YES Rice $130,680 44-6011081 At Closing Yes
Wiggly Shreveport 354,000 sq. Carden -
Warehouse ft. (successo201,360
(Walmart) N. (individual by (Land)
Lakeshore parcel within merger
Drive Deramus Yard to
Tolmak) $3,181,820-3,181,820
(Warehouse)
Total
may be
$5,047,000
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
23. N. & N. Caddo LA Land YES Rice-Card$386,000-44-6011023 At Closing Yes
adjacent to Shreveport (individual (together
Piggly parcel within with
Wiggle Whse Deramus Yard) No.24)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
24. JD Woolworth N. Caddo LA Land YES Rice $386,000-44-6011016 At Closing Yes
Tr Shreveport Carden (together
with
No. 23)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
25. Steeltown Port JeffersoTX Coal and Coke YES Pabtex, 9 At Closing Yes
Arthur Handling Inc.
Facility (improvements)
(PABTEX)
Port JeffersoTX Land Rice-Card$700,000 44-6011091 At Closing Yes
Arthur (Land) (Land)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Steeltown Port JeffersoTX Land YES Rice-Card$500,000-44-6011024 At Closing Yes
Industrial Arthur
Park
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
26. Hollyfield Port JeffersoTX Waterfront YES Rice-Card$4,900,0044-60110100 At Closing Yes
Property Arthur docks, land
Parcel C for
development
1,025 acres
Docks at Slip
No. 3
Docks at
Turning Basin
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Hollyfield C Port JeffersoTX Bulk Handling YES KCSI $2,000,000 10 At Closing Yes
Arthur Facility book
(PABFAC) value
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Hollyfield C Port JeffersoTX Intermodal YES Joint $2,000,000 69 At Closing Yes
Arthur Facility KCSR
and
Southern
Norfolk
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Land YES Rice-Card$100,000-44-6011082 At Closing Yes
Property Arthur
Parcel A
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Land YES Rice-Card$100,000-44-6011083 At Closing Yes
Property Arthur
Parcel B
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
27. Hoeschst Port JeffersoTX Land YES YES Rice-Card$5,400,0044-6011011 At Closing Yes
Celanese Arthur
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
28. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
29. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
30. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
31. Spindletop-WilBeaumont JeffersoTX Land and YES Rice-Card$215,000-44-6011017 At Closing Yes
Warehouse Warehouses (Land)
Property
$2,035,000-2,260,000
(Warehouse)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
32. Spindletop-E Beaumont JeffersoTX Land YES Rice-Card$110,000-44-6011080,91 At Closing No
of KCS, S.,
and N. of
Wilson
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
33. Jandon Jandon Cass MO Land YES Rice-Card$1,432,8044-60110120 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Jandon Jandon Johnson KS Land YES Rice-Card$687,200-44-60111121 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
34. Adams Farm Jandon Cass MO Land YES Rice-Card$432,300-44-6011013 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Adams Farm Jandon Cass MO Land YES Rice-Card$363,700-44-6011013 At Closing Yes
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
35. Fort Smith Fort SebastioAR Land YES Rice-Card$209,820-44-6011014 At Closing Yes
Smith
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
36. Lake Charles Lake CalcasieLA Land YES Rice-Card$1,100,0044-60110150 At Closing Yes
Charles
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
37. Intentionally Omitted.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
38. Springfield Alsen East LA Land YES Rice-Card$595,000-44-6011019 At Closing Yes
Plantation-EBR Baton
Parish Rouge
Parish
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
39. Munson Maryland Eat LA Land Yes Rice-Card$1,812,0044-60110200 At Closing Yes
Tract-EBR Baton
Parish Rouge
Parish
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
40. Oscar Scotland-Easte LA Land YES Rice-Card$492,000-44-6011025 At Closing Yes
Reynaud Baton
Estate-EBR Rouge
Parish
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
41. New Wylie Wylie Collin TX Land-Wylie YES YES Rice $2,500,0044-6011021 At Closing Yes
Yard Enterprises Carden FMV
(successor
by
merger
to
Tolmak)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
New Wylie Wylie Collin TX Land-Alamet YES Rice $2,100,0044-6011021 At Closing Yes
Yard Carden FMV
(successor
by
merger
to
Tolmak)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
New Wylie Wylie Collin TX Land-Harris YES KCSR $250,000 44-6000721 At Closing Yes
Yard Book
Value
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
42. NEID-Front Kansas Jackson MO Land YES Rice-Card$918,000-44-6011022 At Closing Yes
Street & City
Topping
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
43. Coburg Yard Kansas Jackson MO Land YES Rice-Card$350,000 44-6011072 At Closing No
City -
$500,000
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
44. New R/G GrandviewJackson MO Land - Zimmer YES YES KCSR $370,000 44-6000773 At Closing No
Intermodal and FMV
Facility Kansas
City
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
45. Richards Richards Vernon MO Land YES Rice-Card$155,660-44-6011074 At Closing No
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
46. Moniteau CaliforniMoniteauMO Land YES Rice-Card$65,000 44-6011075 Post No
(per Closing
9/1/90)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
47. Lion County LaCygne Linn KS Land YES Rice-Card$108,000-44-6011076 At Closing No
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
48. Hope Hope HempsteaAR Land YES Rice-Card$65,000-944-6011077 At Closing No
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
49. Stamps Stamps LafayettAR Land YES Rice-Card$73,000-144-6011078 At Closing No
Parcel A
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
50. Stamps Stamps LafayettAR Land YES YES Rice-Card$39,000-444-6011079 At Closing No
Parcel B
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
51. Industrial GreenvillHunt TX Land YES Rice-Card$29,000-344-6011084 At Closing No
Park (Tract
1)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
52. Merdoch GreenvillHunt TX Land YES Rice-Card$233,000-44-6011085 At Closing No
Trace (Tract
2)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
53. Philon-Delta Forbing Caddo LA Land YES Rice-Card$178,206-44-6011086 At Closing No
Hunt-Forbing
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
54. Minden Minden Webster LA Land YES Rice-Card$650,000 44-6011087 At Closing No
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
55. Winfield Winn LA Land - 22.24 YES Rice-Card$400,000 44-6011088 At Closing No
acres, 26.66
acres, 18
acres
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
56. Dequincy CalcasieLA Land - 80 YES Rice-Card$200,000 44-6011089 At Closing No
acres
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
57. Packton Winn LA Land - 23.8 YES Rice-Card$25,000 44-6011090 At Closing No
acres
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
58. Robindale CovingtonSt LA Land YES Rice-Card$88,000-144-6011092 At Closing No
Subd (Land) Tammeay
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
59. 12110 Dallas Dallas TX Warehouse and YES YES KCSR $3,000,0044-60007New At Closing No
Garland Road 9 acres Property
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
60. 5801 Gardner Kansas Jackson MO Truck YES YES Rice $2,200,0044-60110New At Closing No
City terminal and Carden Property
8 acres
- ----------------------------------------------------------------------------------------------------------------------------
Schedule 2.01
- -------------------------------------------------------------------------------------------
Lender Revolving Tranche A Tranche X Tranche B
Commitment Commitment Commitment Commitment
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The Chase Manhattan Bank $19,150,000.0$19,150,000.00 $33,200,000.00 $137,750,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The Bank of Nova Scotia 15,000,000.0015,000,000.00 20,000,000.00 5,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Fleet National Bank 15,000,000.0015,000,000.00 20,000,000.00 5,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Bank of Tokyo-Mitusbishi 12,000,000.0012,000,000.00 16,000,000.00 -
Trust Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Bank One, N.A. 12,000,000.0012,000,000.00 16,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Credit Suisse First Boston 12,000,000.0012,000,000.00 16,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Merrill Lynch Capital 12,000,000.0012,000,000.00 16,000,000.00 -
Corporation
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Harris Trust and Savings 7,500,000.00 7,500,000.00 10,000,000.00 -
Bank
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
ABN AMRO Bank N.V. 6,000,000.00 6,000,000.00 8,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The Bank of New York 6,000,000.00 6,000,000.00 8,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
First Union National Bank 6,000,000.00 6,000,000.00 8,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The Fuji Bank, Limited 6,000,000.00 6,000,000.00 8,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Mercantile Bank 6,000,000.00 6,000,000.00 8,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
General Electric Capital 5,850,000.00 5,850,000.00 6,800,000.00 6,500,000.00
Corporation
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The CIT Group/Equipment 5,000,000.00 5,000,000.00 - -
Financing, Inc.
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
UMB Bank, N.A. 3,000,000.00 3,000,000.00 4,000,000.00 -
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Siam Commercial Bank PCL, 1,500,000.00 1,500,000.00 2,000,000.00 -
New York Agency
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Merrill Lynch Senior - - - 5,000,000.00
Floating Rate Fund, Inc.
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Merrill Lynch Senior - - - 5,000,000.00
Floating Rate Fund II, Inc.
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH ING-1 LLC - - - 1,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH ING-2 LLC - - - 2,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH ING-3 LLC - - - 1,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Canadian Imperial Bank of - - - 7,000,000.00
Commerce
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter - - - 8,000,000.00
Prime Income Trust
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH CRESCENT LLC - - - 2,500,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH CRESCENT-3 LLC - - - 2,500,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Continental Assurance - - - 1,000,000.00
Company
Separate Account (E)
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
United Of Omaha Life - - - 1,000,000.00
Insurance Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH Langdale LLC - - - 2,500,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Metropolitan Life Insurance - - - 6,000,000.00
Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Thoroughbred Limited - - - 5,000,000.00
Partnership I
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
CypressTree Senior Floating - - - 500,000.00
Rate Fund
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
North American Senior - - - 500,000.00
Floating Rate Fund
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
CypressTree Investment - - - 500,000.00
Fund, LLC
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH CypressTree 1-LLC - - - 1,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Franklin Floating Rate Trust - - - 4,750,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
New York Life Insurance - - - 5,000,000.00
Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Olympic Funding Trust, - - - 2,000,000.00
Series 1999-1
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH Riverside LLC - - - 2,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Kemper Floating Rate Fund - - - 1,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Galaxy CLO 1999-1, Ltd. - - - 5,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Bavaria TRR Corporation - - - 4,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
The Travelers Insurance - - - 2,000,000.00
Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Travelers Corporate Loan - - - 2,000,000.00
Fund Inc.
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Winged Foot Funding Trust - - - 3,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH Shoshone LLC - - - 3,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH Sterling LLC - - - 3,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Pinehurst Trading, Inc. - - - 2,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
KZH Waterside LLC - - - 2,000,000.00
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Principal Life Insurance - - - 2,000,000.00
Company
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Stein Roe Floating Rate - - - 1,000,000.00
Limited Liability Company
- -------------------------------------------------------------------------------------------
SCHEDULE 3.05(b)
MATERIAL PROPERTY - NON-TRACK REAL ESTATE FOR
KANSAS CITY SOUTHERN INDUSTRIES, INC.
FINANCING ARRANGED BY
THE CHASE MANHATTAN BANK - JANUARY 2000*
* Note that certain values listed below are replacement insurance values,
and, as such, do not purport to reflect the fair market value or appraised
value of the property.
>C>
- --------------------------------------------------------------------------------------------------------------------------------
No. City County State DescriptionLegal Any Owning Entity Value Fed ID # Former To be Title
Leases? PropertMortgaged? Insurance
No.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1. Superior Vivian Caddo LA Tie YES Tran-Serve, $5,625,00043-08650861 No No
Tie and Treating Inc. (lease
Timber Plant/12,000 with purchase
sq. ft. opinion)
Superior Tie &
Timber
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2. 114 W. Kansas Jackson MO Office YES KCSR Southern $2,200,00044-60058432 At Closing YES
11th St. City Building and Development
/8 story KCSI Corp.
leases
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3. Intentionally Omitted (formerly the 1020 3 N/A N/A
Wyandotte Parking Garage)
- --------------------------------------------------------------------------------------------------------------------------------
4.
- --------------------------------------------------------------------------------------------------------------------------------
Knocke Kansas Jackson MO Repair NO KCSR/jointly 44-600075831 No No
Yard City Facility/21,000 owned (jointly
sq. ft. owned)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5. EKC Yard Kansas Jackson MO Intermodal NO KCSR/ jointly $12,000,0044-600075866 No No
City Facility owned (jointly
owned)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6. Pittsburg PittsburCrawfordKS Repair NO KCSR $28,360,1244-600075832 Post No
Yard Facility (replacement Closing.
and value
Maintenance per
Buildings/ insurance
107,800 report)
sq. ft.
Machine $1,191,120
shop
Store room
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7. Heavener HeavenerLeFlore OK Yard NO KCSR $986,245 44-600075833 Post No
Yard Office, Closing
small
office
building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8. Leesville LeesvillVernoa LA Yard NO KCSR $826,672 44-600075851 Post No
Yard Office Closing
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9. Mossville MossvillCalcasieLA Yard NO KCSR $698,497 44-600075848 Post No
Yard Office Closing.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10. Spindletop BeaumontJeffersoTX Yard NO KCSR $1,654,97244-600075850 Post No
Yard Office Closing
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
11. Port Port JeffersoTX Yard NO KCSR $1,677,64644-600075849 Post No
Arthur Arthur Office Closing
Yard
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
12. Baton Baton East LA Office YES KCSR 44-60007584, At Closing Yes
Rouge Yard Rouge Baton Building/ 52,53
Rouge 15,000
Parish sq. ft.
1401 Foss $5,947,911
St
$1,083,516
Depot
Office.
Mechanical
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
13. New ShrewsbuJeffersoLA Freight NO KCSR $8,393,62944-600075854, Post No
Orleans House 55, 63 Closing
Yard $1,813,310
Engine
House $700,000
Intermodal
Facility
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
14. Old Shell ShrewsbuJeffersoLA Land - YES Rice-Carden $500,000 44-6011041 91 At No
Building Intermodal Closing
Property storage
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
15. Zacha Jet Dallas Dallas TX Intermodal NO KCSR $20,000,0044-600075857, 68 Post No
Facility Closing
and other
assorted
property
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
16. Venice East St. IL Yard/GeneraNO Gateway Western Unknown 36-368179958 No No
Yard St. Clair Office Mortgage
Louis (no
records)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
17. Mexico Mexico Audrain MO Depot NO Gateway Western $640,503 36-368179959 No No
Yard Mortgage
(no
records)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
18. Slater Saline Slater MO Depot NO Gateway Western $389,872 36-368179960 No No
Yard ($500,000 Mortgage
replacement (no
cost per records)
insurance
report)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
19. Pearl Yard Jackson Rankin MS Intermodal NO KCSR $10,000,0044-600075865 Post No
Facility Closing
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
20. Sallisaw SallisawSequoya OK Intermodal NO KCSR $1,000,00044-600075867 Post No
Yard Facility Closing
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
21. Deramus N. Caddo LA General Yes KCSR $7,721,599 5 At Closing Yes
Yard Shreveport Office
Bldg 4601
Shreveport
-
Blanchard
Highway
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Customer KCSR $2,000,00044-60007585 At Yes
Service FMV Closing
Center
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Car Shop KCSR $8,306,37844-60007585 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Diesel KCSR $4,834,39744-60007585 At Closing Yes
Service
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Division KCSR $2,158,54144-60007585 At Closing Yes
Store Room
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Diesel KCSR $1,875,25444-60007585 At Closing Yes
Fuel Tanks
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wheel Shop KCSR $1,789,40244-60007585 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cafeteria KCSR $1,671,48244-60007585 At Closing Yes
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
KCST KCSR $1,191,84544-60007585 At Closing Yes
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Yard KCSR $958,145 44-60007585 At Closing Yes
Office
500 N.
Lakeshore
Dr.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Truck KCSR $917,292 44-60007585 At Closing Yes
Garage
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Running KCSR $912,108 44-60007585 At Closing Yes
Repair
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sand KCSR $709,030 44-60007585 At Closing Yes
Blast
Building
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Diesel KCSR $14,723,7144-60007585 At Closing Yes
Shop
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Intermodal KCSR Trans $5,000,00044-60007585 At Closing Yes
Facility Service
4365
Blanchard
Road
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
22. Piggly N. Caddo LA Warehouse/ YES Rice Carden $130,680 44-60110418 At Closing Yes
Wiggly Shreveport 354,000 (successor by -
Warehouse sq. ft. merger to 201,360
(Walmart) (individual Tolmak) (Land)
N. parcel
Lakeshore within
Drive Deramus $3,181,820-3,181,820
Yard (Warehouse)
Total
may be
$5,047,000
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
No. City County State DescriptionLegal Any Owning Entity Value Fed ID # Former To be Title
Leases? PropertMortgaged? Insurance
No.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
23. N. & N. Caddo LA Land YES Rice-Carden $386,000-744-601104123 At Yes
adjacent Shreveport (individual (together Closing
to Piggly parcel with
Wiggle within No.24)
Whse Deramus
Yard)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
24. JD N. Caddo LA Land YES Rice Carden $386,000-744-601104116 At Closing Yes
Woolworth Shreveport (together
Tr with No.
23)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
25. Steeltown Port JeffersoTX Coal and YES Pabtex, Inc. 9 At Closing Yes
Arthur Coke (improvements)
Handling
Facility
(PABTEX)
Port JeffersoTX Land Rice-Carden $700,000 44-60110419 At Closing Yes
Arthur (Land) (Land)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Steeltown Port JeffersoTX Land YES Rice-Carden $500,000-644-601104124 At Closing Yes
Industrial Arthur
Park
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
26. Hollyfield Port JeffersoTX Waterfront YES Rice-Carden $4,900,00044-601104110 At Closing Yes
Property Arthur docks,
Parcel C land for
development
1,025
acres
Docks at
Slip No. 3
Docks at
Turning
Basin
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Bulk YES KCSI $2,000,000 10 At Closing Yes
C Arthur Handling book
Facility value
(PABFAC)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Intermodal YES Joint KCSR and $2,000,000 69 At Closing Yes
C Arthur Facility Southern Norfolk
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Land YES Rice-Carden $100,000-144-601104182 At Closing Yes
Property Arthur
Parcel A
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollyfield Port JeffersoTX Land YES Rice-Carden $100,000-144-601104183 At Closing Yes
Property Arthur
Parcel B
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
27. Hoeschst Port JeffersoTX Land YES YES Rice-Carden $5,400,00044-601104111 At Closing Yes
Celanese Arthur
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
28. Port JeffersoTX Building Rice-Carden $1,125,00044-601104127 No. No
Arthur at Slip (Demolished)
No. 3
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
29. Port JeffersoTX 7 steel Rice-Carden $3,960,00044-601104129 No. No
Arthur storage (Demolished)
tanks
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
30. Port JeffersoTX Watertower/pump Rice-Carden $1,040,00044-601104130 No No
Arthur station (Demolished)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
31. Spindletop-BeaumontJeffersoTX Land and YES Rice-Carden $215,000-244-601104117 At Closing Yes
Warehouse Warehouses (Land)
Property
$2,035,000-2,260,000
(Warehouse)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
32. Intentionally Omitted
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
33. Jandon Jandon Cass MO Land YES Rice-Carden $1,432,80044-601104112 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jandon Jandon Johnson KS Land YES Rice-Carden $687,200-844-601110612 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
34. Adams Farm Jandon Cass MO Land YES Rice-Carden $432,300-544-601104113 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Adams Farm Jandon Cass MO Land YES Rice-Carden $363,700-344-601104113 At Closing Yes
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
35. Intentionally Omitted
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
36. Lake Lake CalcasieLA Land YES Rice-Carden $1,100,00044-601104115 At Closing Yes
Charles Charles
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
37. NBRD Baton East LA Land YES Rice-Carden $4,099,50044-601104118 No (Toxic No
Industrial Rouge Baton property).
Park Rouge
Parish
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
38. SpringfieldAlsen East LA Land YES Rice-Carden $595,000-744-601104119 At Closing Yes
Plantation-EBR Baton
Parish Rouge
Parish
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
39. Munson MarylandEat LA Land Yes Rice-Carden $1,812,00044-601104120 At Closing Yes
Tract-EBR Baton
Parish Rouge
Parish
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
40. Oscar ScotlandEastle LA Land YES Rice-Carden $492,000-544-601104125 At Closing Yes
Reynaud Baton
Estate-EBR Rouge
Parish
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
41. New Wylie Wylie Collin TX Land-Wylie YES YES Rice Carden $2,500,00044-601104121 At Closing Yes
Yard Enterprises (successor by FMV
merger to
Tolmak)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Wylie Wylie Collin TX Land-AlametYES Rice Carden $2,100,00044-601104121 At Closing Yes
Yard (successor by FMV
merger to
Tolmak)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Wylie Wylie Collin TX Land-HarrisYES KCSR $250,000 44-600075821 At Closing Yes
Yard Book
Value
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
42. NEID-Front Kansas Jackson MO Land YES Rice-Carden $918,000-144-601104122 At Closing Yes
Street & City
Topping
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
43. Coburg Kansas Jackson MO Land YES Rice-Carden $350,000 44-601104172 At Closing No
Yard City -
$500,000
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
44. Numbers 44-53 are
Intentionally Omitted
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
54. Minden Minden Webster LA Land YES Rice-Carden $650,000 44-601104187 At Closing No
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
55 Numbers 55-58 are
Intentionally Omitted.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
59. 12110 Dallas Dallas TX Warehouse YES YES KCSR $3,000,00044-6000758New At Closing No
Garland and 9 Property
Road acres
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
60. 5801 Kansas Jackson MO Truck YES YES Rice Carden $2,200,00044-6011041New At Closing No
Gardner City terminal Property
and 8
acres
- --------------------------------------------------------------------------------------------------------------------------------
Schedule 3.05(c) to the
Credit Agreement
PENDING CONDEMNATION PROCEEDINGS
None.
Schedule 3.06 to the
Credit Agreement
DISCLOSED MATTERS
LEGAL
Duncan Case
In 1998, a jury in Beauregard Parish, Louisiana returned a verdict
against the Borrower in the amount of $16.3 million. The Louisiana state case
arose from a railroad crossing accident which occurred at Oretta, Louisiana on
September 11, 1994, in which three individuals were injured. Of the three, one
was injured fatally, one was rendered quadriplegic and the third suffered less
serious injures.
Subsequent to the verdict, the trial court held that the plaintiffs
were entitled to interest on the judgment from the date the suit was filed,
dismissed the verdict against one defendant and reallocated the judgment of that
verdict to the remaining defendants. The resulting total judgment against the
Borrower, together with interest, was approximately $26.7 million at September
30, 1999.
On November 3, 1999 the Third Circuit Court of Appeals in Louisiana
affirmed the judgment. Review will now be sought in the Louisiana Supreme Court.
Bogalusa Cases
In July 1996, the Borrower was named as one of 27 defendants in various
lawsuits in Louisiana and Mississippi arising from the explosion of a rail car
loaded with chemicals in Bogalusa, Louisiana on October 23, 1995. As a result of
the explosion, nitrogen dioxide and oxides of nitrogen were released into the
atmosphere over parts of that town and the surrounding area allegedly causing
evacuations and injuries. Approximately 25,000 residents of Louisiana and
Mississippi have asserted claims to recover damages allegedly caused by exposure
to the chemicals.
The Borrower neither owned nor leased the rail car or the rails on
which the rail car was located at the time of the explosion in Bogalusa. The
Borrower did, however, move the rail car from Jackson to Vicksburg, Mississippi,
where it was loaded with chemicals, and back to Jackson where the car was
tendered to the Illinois Central Railway Company ("IC"). The explosion occurred
more than 15 days after the Borrower last transported the rail car. The car was
loaded by the shipper in excess of its standard weight, but under the car's
capacity, when it was transported by the Borrower to interchange with the IC.
The trial of a group of 20 plaintiffs in the Mississippi lawsuits
arising from the chemical release resulted in a jury verdict and judgment in
favor of the Borrower in June 1999. The jury found that the Borrower was not
negligent and that the plaintiffs had failed to prove that they were damaged.
The trial of the Louisiana class action and the trial of another group of
Mississippi plaintiffs could both begin during the year 2000.
ENVIRONMENTAL
Roston Foundry Site
Borrower received a request for information from the United States
Environmental Protection Agency in 1999 concerning a site in Alexandria,
Louisiana called the Ruston Foundry Site. The request for information was for
the purpose of hazard ranking. The site partially consisted of real estate
formerly owned by the Louisiana and Arkansas Railway Company (which has since
been merged into the Borrower) and is adjacent to a right of way currently owned
by the Borrower. The Borrower provided all requested information. At this time
Borrower is monitoring the process. To Borrower's knowledge the hazard ranking
has not been completed.
12th Street Yard, Kansas City, MO
The Gateway Western Railway Company (the "GWWR") is successor in title
of this property to Chicago, Missouri & Western Railroad (the "CMW"), which
purchased this property and others from the Illinois Central (the "IC") in 1987.
The facility has been used as a roundhouse and fueling facility for many years
prior to IC's sale to CMW. GWWR has not used this facility since May 1990.
In 1993, GWWR initiated underground storage tanks removal activities at
a location immediately adjacent to this site. Evidence of significant leakage
was observed and a site investigation was conducted to determine the extent of
leakage. The investigation revealed extensive surface and subsurface soil
contamination and free phase contamination of shallow groundwater. The known
contaminant of concern is diesel fuel and sources were identified to be the
underground storage tanks and the nearby fueling facility. A groundwater
recovery trench and well, with an above ground oil-water separator, was
installed and has been operating since that time in an effort to remove free
phase diesel fuel from the top of the shallow groundwater and to limit further
migration, thereby confining the impacted area to GWWR property.
The Missouri Department of Natural Resources (MDNR) has been advised of
GWWR's findings and approved GWWR's plans to date to remediate excavated soils
from the underground tank holdings and to remove the free phase diesel fuel from
the shallow groundwater. Recovery of free phase diesel fuel from the top of
shallow groundwater and quarterly sampling and reporting to MDNR is ongoing.
Although not required at this time, a plan for remediation of area soils, other
than the UST hold soils, will be required to be prepared and implemented.
GWWR is also entitled under provisions of the CMW-IC environmental
liability agreement, to recover certain environmental investigative and cleanup
costs of historically contaminated sites, in the opinion of GWWR counsel. GWWR
has asserted a timely claim to the IC for recovery of all such GWWR
expenditures, including those associated with this site.
Underground Storage Tanks
GWWR undertook the removal of all known underground storage tanks in
1993. Three USTs at E. St. Louis Yard and two USTs at Venice Yard were removed.
However, during the removals, evidence of historical UST leakage was observed.
Based on this information, plans for remediation and monitoring were developed,
and submitted and approved by the Illinois Environmental protection Agency.
These plans are being implemented for purposes of securing approved closure of
both sites' USTs.
There may also exist other orphan USTs, that is, abandoned and now
lawfully closed, which are yet unknown. Based on historical experience with
railroad real estate, such tanks are left upon the premises by former tenants
and operators.
Securing approved closure of the E. St. Louis and Venice sites is
expected in 2000.
GWWR is also entitled, under provisions of the CMW-IC environmental
liability agreement, to recover certain environmental investigative and cleanup
costs of historically contaminated sites, in the opinion of GWWR counsel. GWWR
has asserted a timely claim to the IC for recovery of all such GWWR
expenditures, including those associated with these sites.
East St. Louis, IL Yard - Mechanical Facilities (existing and former Hump Yard)
GWWR is successor in title of this property to CMW railroad, which
purchased this property and others from IC in 1987. The facility had been used
as a roundhouse and fueling facility for many years prior to IC's sale to CMW.
GWWR has continued to use this existing facility. GWWR has not used the former
Hump Yard fueling facilities.
GWWR has known of contaminated ballast and subsoils in the area of the
existing fueling facility near the existing roundhouse area. GWWR has performed
partial remediation of these materials, known to be contaminated with diesel
fuel. Such materials have been removed and converted to asphaltic pavement
applied elsewhere in this yard facility. Additional track pans have been
installed. Surface runoff is collected and treated at the facility permitted
wastewater treatment unit.
Additional remedial investigations are underway to determine the
character and extent of remaining contamination at this facility. The results of
these studies will enable an estimation of environmental liability at both of
these facilities. Reports are expected in the first quarter of 2000.
GWWR is also entitled, under provisions of the CMW-IC environmental
liability agreement, to recover certain environmental investigative and cleanup
costs of historically contaminated sites, in the opinion of GWWR counsel. GWWR
has asserted a timely claim to the IC for recovery of all such GWWR
expenditures, including those associated with these sites.
Venice, Illinois Yard, Roodhouse, Illinois Yard - Former Roundhouses and
Fueling Facilities
GWWR is successor in title of these properties to CMW railroad, which
purchased these properties and others from IC in 1987. The facilities had been
used as roundhouse and fueling facilities for many years prior to IC's sale to
CMW. GWWR has not used these facilities.
Preliminary investigations of these facilities conducted in 1995 and
1997 indicated likely surface and subsurface soil contamination and a potential
for groundwater contamination from past activities. Additional, more detailed
remedial investigations are underway to determine the character and extent of
contamination at these facilities. The results of these studies will enable an
estimation of environmental liability at these facilities. Reports are expected
in the first quarter of 2000.
GWWR is also entitled, under provisions of the CMW-IC environmental
liability agreement, to recover certain environmental investigative and cleanup
costs of historically contaminated sites, in the opinion of GWWR counsel. GWWR
has asserted a timely claim to the IC for recovery of all such GWWR
expenditures, including those associated with these sites.
Mexico, Missouri Existing Locomotive Service Area and Former Fueling Facility
GWWR is successor in title of this property to CMW, which purchased
this property and others from IC in 1987. These facilities include the existing
locomotive service facility, which has been used by the GWWR, and a former
fueling facility near the southeast leg of the wye, which has not been used by
the GWWR, but had been used as a fueling facility for many years prior to IC'
sale to CMW.
Preliminary investigations of this facility conducted in 1995 and 1997
indicated likely surface and subsurface soil contamination and a potential for
groundwater contamination from past activities. Additional, more detailed
remedial investigations, are underway to determine the character and extent of
contamination at this facility. The results of these studies will enable an
estimation of environmental liability at these facilities. Reports are expected
in the first quarter of 2000.
GWWR is also entitled, under provisions of the CMW-IC environmental
liability agreement, to recover certain environmental investigative and cleanup
costs of historically contaminated sites, in the opinion of GWWR counsel. GWWR
has asserted a timely claim to the IC for recovery of all such GWWR
expenditures, including those associated with these sites.
Schedule 3.12 to the
Credit Agreement
SUBSIDIARIES
Transportation Subsidiaries Percentage of State or other Jurisdiction of
Ownership Incorporation or Organization
Canama Transportation, Inc. (1) 100 Cayman Islands
Caymex Transportation, Inc. (2)* 100 Cayman Islands,
domesticated in Delaware
Gateway Eastern Railway Company (3)* 100 Illinois
Gateway Western Railway Company (4)* 100 Illinois
Global Terminaling Services, Inc. (5)* 100 Delaware
Kansas City Southern Lines, Inc. (6)* 100 Delaware
KCS Transportation Company (2)* 100 Delaware
Mid-South Microwave, Inc. (2)* 100 Delaware
NAFTA Rail, S.A. de C.V. (1) 100 Mexico
SCC Holdings, Inc. (2)* 100 Delaware
North American Freight Transportation Alliance Rail 100 Delaware
Corporation (7)
Port Arthur Bulk Marine Terminal Co. (8) 80 Partnership
Rice-Carden Corporation (2)* 100 Missouri
Southern Development Company (2)* 100 Missouri
Southern Industrial Services, Inc. (7)* 100 Delaware
The Kansas City Southern Railway Company (7)* 100 Missouri
Trans-Serve, Inc. (5)* 100 Delaware
TransFin Insurance, Ltd. (7) 100 Vermont
Veals, Inc. (7)* 100 Delaware
Wyandotte Garage Corporation (7) 80 Missouri
Financial Asset Percentage of State or Other Jurisdiction of
Management Subsidiaries Ownership Incorporation or Organization
Berger LLC (9) 80 Delaware
Berger Distributors, Inc. (10) 100 Delaware
DST Systems, Inc. (9) 32 Delaware
Stilwell Financial, Inc. (6) 100 Delaware
FAM UK Limited (11) 100 United Kingdom
Stilwell Management, Inc. (11) 100 Delaware
Fillmore Agency, Inc. (11) 100 Colorado
Fountain Investments, Inc. (11) 100 Missouri
Fountain Investments UK (11) 100 United Kingdom
Janus Capital Corporation (11) 82 Colorado
Janus Capital International Ltd. (12) 100 Colorado
Janus Distributors, Inc. (12) 100 Colorado
Janus Service Corp. (12) 100 Colorado
Joseph Nelson Limited (13) 100 United Kingdom
Nelson Investment Planning Limited (13) 100 United Kingdom
Nelson Investment Management Limited (13) 100 United Kingdom
Nelson Money Managers plc (15) 80 United Kingdom
PVI, Inc. (11) 100 Delaware
Taproot Limited (13) 100 United Kingdom
(1) Subsidiary of Caymex Transportation, Inc.
(2) Subsidiary of The Kansas City Southern Railway Company
(3) Subsidiary of Gateway Western Railway Company
(4) Subsidiary of KCS Transportation Company
(5) Subsidiary of Southern Industrial Services, Inc.
(6) Subsidiary of Kansas City Southern Industries, Inc.
(7) Subsidiary of Kansas City Southern Lines, Inc.
(8) Subsidiary of Rice-Carden Corporation
(9) Subsidiary of Stilwell Management, Inc.
(10) Subsidiary of Berger LLC
(11) Subsidiary of Stilwell Financial, Inc.
(12) Subsidiary of Janus Capital Corporation
(13) Subsidiary of Nelson Money Managers plc
(14) Subsidiary of Joseph Nelson Limited
(15) Subsidiary of FAM UK Limited
* Indicates those parties which are Loan Parties.
Schedule 3.13 to the
Credit Agreement
INSURANCE
============================================================================================================================
Coverage Covered Operations Carrier Limits Deductibles Expiration Dates
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Property All rail and Aon Property Facility $175,000,000 $5,000 each/every April 1,2000
("All-risk" coverage) non-rail operations (Swiss Re insurance and loss
various other insurers) $100,000 annual
aggregate (non-rail)
$2,000,000 annual
aggregate (rail)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Rail Liability All railroad Lloyds $250,000,000 $3,000,000 June 1, 2000
(Including FELA) operations Am-Re Managers self-insured
CAN retention
Lexington
(and various other
insurers)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Non-Rail Liability All operations Travelers $25,000,000 None August 1, 2000
(Including automobile except railroad
general liability and
employers liability)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Workers Compensation All operations Travelers Statutory None August 1, 2000
except railroad
============================================================================================================================
13
21042580\V-1
21042580\V-1
Schedule 6.01 to the
Credit Agreement
EXISTING INDEBTEDNESS
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Obligor Payee Description Maturity Balance
@9/30/99
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City
Southern Railway Chemical Bank Locomotive Purchase 8/04 $4,620,550
Company
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City Chemical Bank Locomotive Purchase 1/03 7,807,834
Southern Railway Company
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City The Chase Manhattan Bank Locomotive Purchase 12/06 43,265,552
Southern Railway Company
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City Bank of New York Locomotive Purchase 5/03 14,405,798
Southern Railway Company
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City Connecticut Bank and Capital Lease/ 6/04 1,156,314
Southern Railway Company Trust Rolling Stock
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City Trinity Industries Capital Lease/ 2/06 614,048
Southern Railway Company Rolling Stock
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
The Kansas City Pitney Bowes Capital Lease/ 9/09 2,339,322
Southern Railway Company Rolling Stock
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Gateway Western Railway State of Illinois Jacksonville 1/06 556,063
Company Rehabilitation Project
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Gateway Western Railway State of Illinois East St. Louis 4/07 242,220
Company Rehabilitation Project
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Gateway Western Railway State of Illinois Roadhouse to 1/07 2,378,894
Company East Louisiana
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Venice Intermodel
Gateway Western Railway State of Illinois Facility 12/09 1,844,644
Company Rehabilitation
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Gateway Eastern Railway State of Illinois Rehabilitation 2/18 914,645
Company Project Wann-Lenox
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Wyandotte Garage Lincoln National Mortgage on Property 12/12 5,653,829
Corporation
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Southern Industrial
Services, Inc./ IRB IRB 5/04 5,000,000
TranServe, Inc.
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Contingent Capital
Kansas City Southern TFM contribution N/A 74,600,000
Industries, Inc. obligation
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
Contingent Capital 7,500,000
Kansas City Southern Panama Canal Railway contribution N/A (+5% of Project
Industries, Inc. Company obligation Completion Costs)
- ------------------------- ------------------------- ----------------------- ------------------- ----------------------
21042580\V-1
Schedule 6.02 to the
Credit Agreement
EXISTING LIENS
- ------------------------------------- --------------------------------- ------------------------- --------------------
Debtor Secured Party Collateral Debt Secured
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Chemical Bank $4,620,550
Company Specific Locomotives
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Chemical Bank 7,807,834
Company Specific Locomotives
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Bank of New York 14,405,798
Company Specific Locomotives
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway The Chase 43,265,552
Company Manhattan Bank Specific Locomotives
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Connecticut Capital Lease/ 1,156,314
Company Bank and Trust Rolling Stock
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Trinity Capital Lease/ 614,048
Company Rolling Stock
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Pitney Bowes Capital Lease/ 2,339,322
Company Rolling Stock
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
State of Illinois Rehabilitation Project 556,063
Gateway Western Railway Company Assets
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
State of Illinois Rehabilitation Project 242,220
Gateway Western Railway Company Assets
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
State of Illinois Rehabilitation Project 2,378,894
Gateway Western Railway Company Assets
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
State of Illinois Rehabilitation Project 1,844,644
Gateway Western Railway Company Assets
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
State of Illinois Rehabilitation Project 914,645
Gateway Eastern Railway Company Assets
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
Lincoln National Real 5,653,829
Wyandotte Garage Corporation Property
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
Southern Industrial Services, IRB Plant 5,000,000
Inc./TranServe
- ------------------------------------- --------------------------------- ------------------------- --------------------
Schedule 6.02 to the
Credit Agreement
EXISTING LIENS
- ------------------------------------- --------------------------------- ------------------------- --------------------
Debtor Secured Party Collateral Debt Secured
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
Gateway Western State of Missouri [Fixed Assets] Flood
Railway Company Relief Grant
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway GE Capital Fleet Services Specific Equipment Operating
Company Under Operating Leases Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Puckett Machine Company Specific Equipment Operating
Company Under Operating Leases Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway IBM Credit Specific Equipment Operating
Company Under Operating Leases Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway Storage Tek Financial Specific Equipment Operating
Company Under Operating Leases Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway General Electric Specific Equipment Operating
Company Capital Corporation Under Operating Leases Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
- ------------------------------------- --------------------------------- ------------------------- --------------------
The Kansas City Southern Railway GE Capital Modular Trailer Operating
Company Leases
- ------------------------------------- --------------------------------- ------------------------- --------------------
Schedule 6.07 to the
Credit Agreement
RESTRICTIONS AND CONDITIONS
OF CERTAIN OTHER AGREEMENTS
The Wyandotte Garage Corporation has entered into a mortgage which
restricts its ability to pledge its assets, give guarantees and make
distributions.
EXHIBIT A
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of January
11, 2000 (as amended and in effect on the date hereof, the "Credit Agreement"),
among Kansas City Southern Industries, Inc., The Kansas City Southern Railway
Company, the lenders from time to time party thereto and The Chase Manhattan
Bank, as administrative agent, collateral agent and issuing bank. Terms defined
in the Credit Agreement are used herein with the same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as of the Assignment
Date set forth below, the interests set forth below (the "Assigned Interest") in
the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth below in the Commitment of the
Assignor on the Assignment Date and Revolving Loans owing to the Assignor which
are outstanding on the Assignment Date, together with the participations in
Letters of Credit, LC Disbursements and Swingline Loans held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest,
relinquish its rights and be released from its obligations under the Credit
Agreement.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.17(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 9.04(b) of the Credit
Agreement.
This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
21042580\V-1
Percentage Assigned of
Facility/Commitment (set forth, to at
least 8 decimals, as a Principal Amount
Assigned percentage of the Facility and
(and identifying information the
aggregate Commitments of all as to
individual Competitive Lenders
thereunder) Loans)
Facility
Revolving Commitment Assigned: $ %
Revolving Loans Assigned:
Tranche A Term Loans Assigned:
Tranche B Term Loans Assigned:
Tranche X Term Loans Assigned:
The terms set forth above and on the reverse side hereof are hereby agreed to:
[Name of Assignor] , as Assignor
By: ________________________________
Name:
Title:
[Name of Assignee] , as Assignee
By: ________________________________
Name:
Title:
The undersigned hereby consent to the within assignment: 1/
THE KANSAS CITY SOUTHERN THE CHASE MANHATTAN BANK,
RAILWAY COMPANY, as Administrative Agent,
By: ________________________ By: ___________________________
Name: Name:
Title: Title:
FORM OF OPINION OF SONNENSCHEIN NATH & ROSENTHAL EXHIBIT B
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60606-6404 (312) 876-8000
FACSIMILE
(312) 876-7934
January 11, 2000
To the Lenders, the Administrative
Agent, the Collateral Agent and
the Issuing Bank referred to below
c/o The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, NY 10017
Re: Credit Facilities for the Kansas City Southern Railway Company
Ladies and Gentlemen:
We have acted as counsel for Kansas City Southern Industries, Inc., a
Delaware corporation ("Holdings"), The Kansas City Southern Railway Company, a
Missouri corporation (the "Borrower"), and each other Domestic Subsidiary of
Holdings set forth on Schedule I hereto (which Holdings has advised us includes
all Domestic Subsidiaries which are Significant Subsidiaries), (together with
Holdings and the Borrower, the "Loan Parties"), in connection with the Credit
Agreement dated as of January 11, 2000, among Holdings, the Borrower, the
lenders from time to time party thereto (the "Lenders") and The Chase Manhattan
Bank, as administrative agent (in such capacity, the "Administrative Agent"),
collateral agent (in such capacity, the "Collateral Agent"), issuing bank (in
such capacity, the "Issuing Bank") and swingline lender (the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary or advisable
for purposes of this opinion, including (i) the Credit Agreement, (ii) the
Pledge Agreement, (iii) the Security Agreement, (iv) the Guarantee Agreement,
(v) the Indemnity, Subrogation and Contribution Agreement, (vi) each form of
Mortgage, Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Financing Statement described on Schedule II hereto (collectively the
"Mortgage"), to be recorded in the recording offices listed in Schedule II
hereto; (vii) the fee letter from the Administrative Agent and Chase Securities
Inc. dated December 6, 1999 to and acknowledged by Holdings and the Borrower;
(viii) the Perfection Certificate; and (ix) executed copies of the UCC-1
financing statements listed on Schedule III hereto (the "Financing Statements")
(the documents described in the above clauses (i) through (vii) as executed and
delivered on the date hereof being collectively referred to herein as the
"Agreements").
As to questions of fact material to the opinions set forth herein, we
have relied upon the representations of the Loan Parties set forth in the
Agreements, certificates of officers and other representatives of the Loan
Parties and factual information we have obtained from such other sources as we
have deemed reasonable. We have assumed without investigation that there has
been no relevant change or development between the dates as of which the
information cited in the preceding sentence was given and the date of this
letter. We have not independently verified the accuracy of the matters set forth
in the written statements or certificates upon which we have relied, nor have we
undertaken any lien, suit or judgment searches or searches of court dockets in
any jurisdiction. For purposes of the opinion in paragraph 1, we have relied
exclusively upon certificates issued by relevant governmental authorities in the
relevant jurisdictions, and such opinion is not intended to provide any
conclusion or assurance beyond that conveyed by that certificate.
We have assumed (i) the genuineness and authenticity of all documents
examined by us and all signatures thereon, and the conformity to originals of
all copies of all documents examined by us; (ii) that the execution, delivery
and/or acceptance of the Agreements have been duly authorized by all action,
corporate or otherwise, necessary by the parties to the Agreements other than
the Loan Parties (those parties other than the Loan Parties are hereinafter
collectively referred to as the "Other Parties") and that the Agreements are
enforceable against the Other Parties to the extent a party thereto; (iii) the
legal capacity of all natural persons executing the Agreements; (iv) that each
of the Other Parties has satisfied those legal requirements that are applicable
to it to the extent necessary to make the Agreements enforceable against it; (v)
that each of the Other Parties has complied with all legal requirements
pertaining to its status as such status relates to its rights to enforce the
Agreements; (vi) the payment by the Loan Parties' stockholders of each of the
Pledged Subsidiaries (or prior holders of each of their shares of stock) of the
full and sufficient consideration due from them to the applicable issuer of such
shares upon issuance of such shares; (vii) that the Agreements accurately
describe and contain the mutual understandings of the parties, and that there
are no oral or written statements or agreements or usages of trade or courses of
prior dealings among the parties that would modify, amend or vary any of the
terms of the Agreements; (viii) that the Other Parties will act in accordance
with, and will refrain from taking any action that is forbidden by, the terms
and conditions of the Agreements; (ix) the constitutionality or validity of a
relevant statute, rule, regulation or agency action is not in issue; (x) that
each Loan Party holds requisite title and rights to property involved in the
transactions contemplated by the Agreements; (xi) all agreements other than the
Agreements which we have reviewed in connection with our letter would be
enforced as written; (xii) that there has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence; (xiii) that each of the
Other Parties and any agent acting for any of them in connection with the
Agreements have acted without notice of any defense against the enforcement of
any rights created by, or adverse claim to any property in which a security
interest is purported to be created pursuant to, the Agreements, (xiv) none of
the Collateral consists or will consist of consumer goods, equipment used in
farming operations, farm products, crops, timber or minerals and the like
(including oil and gas) or accounts resulting from the sale thereof, any
beneficial interest in a trust or a decedent's estate or letters of credit; (xv)
the representations and warranties in the Agreements and the information on the
schedules to all Agreements regarding the locations and descriptions of
Collateral and chief executive office and other matters are accurate and
complete; (xvi) no accounts, chattel paper or general intangibles are or will be
due from the United States or any State of the United States or any agency or
department of the United States or of any State; (xviii) that no Subsidiary Loan
Party is insolvent or rendered insolent by virtue of the Loan Party's
obligations incurred under the Agreements to which it is a party; and (xix) the
Lenders have given value to each of the Loan Parties within the meaning of
Section 9-203 of the Uniform Commercial Code as in effect in the State(s) of
Illinois, Kansas and Missouri (the "UCC").
We confirm that we do not have any actual knowledge which has caused us
to conclude that our reliance and assumptions cited in the two preceding
paragraphs are unwarranted or that any information supplied in this letter is
wrong.
As used in this opinion with respect to any matter, the qualifying
phrase "to the best of our knowledge" or "our actual knowledge" or such similar
phrase means the conscious awareness of facts or other information by: (i) the
lawyer signing this opinion; (ii) any lawyer who has had active involvement in
negotiating or preparing the Agreements or this opinion or has had a substantial
role in advising Holdings in connection with the Spin-Off. In this regard, it is
noted that we have not made any special review or investigation in connection
with rendering any opinion so qualified other than inquiry of various officers,
in-house legal counsel and key employees of the various Loan Parties and a
review of material agreements brought to our attention.
Based on the foregoing, and in reliance thereon, and subject to the
qualifications, limitations and exceptions stated herein, we are of the opinion,
having due regard for such legal considerations as we deem relevant, that:
1. Each Loan Party (a) is validly existing and in good standing under
the laws of its jurisdiction of organization and is a foreign corporation
qualified to do business and in good standing in each jurisdiction as set forth
on Schedule I attached hereto and (b) has the corporate power and authority to
carry on its business as now conducted.
2. The execution and delivery of the Perfection Certificate and the
Financing Statements and the execution, delivery and performance of each of the
Agreements are within each Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. The
Agreements have been duly executed and delivered by each Loan Party a party
thereto, as applicable, and constitute legal, valid and binding obligations of
each Loan Party, as applicable, enforceable in accordance with their terms.
3. The execution, delivery and performance of the Agreements by each
Loan Party thereto: (a) does not require any consent or approval of,
registration or filing with or any other action by any Governmental Authority,
(b) will not violate any applicable law or regulation or the charter or by-laws,
or any other organizational documents or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument of which we are aware and which
are binding upon any Loan Party or any Loan Party's assets, or give rise to a
right thereunder to require any payment to be made by any Loan Party and (d)
will not result in the creation or imposition of any Lien on any asset of any
Loan Party, except Liens created under the Agreements, except, in each case, (i)
such consents, approvals, registration and filings which have been obtained or
made and are in full force and effect, (ii) filings necessary to perfect Liens
created under the Agreements and (iii) in any case where, individually or in the
aggregate, the failure to file, obtain consent or any violation could not
reasonably be expected to result in a Material Adverse Effect.
4. To the best of our knowledge, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or threatened against or affecting any Loan Party (a) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect (other than as described in Holdings Form 10K
filed with the SEC for fiscal year ended December 31, 1998 and the Disclosed
Matters) or (b) that involve the Agreements or the Transactions.
5. No Loan Party is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
6. Execution and delivery of the Pledge Agreement, together with
delivery to and the continued possession by the Collateral Agent of (i) all the
Equity Interests pledged under the Pledge Agreement (the "Pledged Equity
Interests") which are (a) represented by certificates, together with stock
powers properly executed in blank with respect thereto or (b) upon the proper
filing of the Financing Statements in the jurisdictions noted thereon and (ii)
all notes representing Indebtedness pledged under the Pledge Agreement (the
"Pledged Indebtedness") together with the note powers properly executed in blank
with respect thereto will, in each case, create and perfect a valid security
interest in the Pledged Equity Interests and Pledged Indebtedness pledged on the
date hereof under the Pledge Agreement.
7. The provisions of the Security Agreement are sufficient to create in
favor of the Collateral Agent for the benefit of the Secured Parties a legal,
valid and enforceable security interest in all right, title and interest of the
respective Loan Parties in the Collateral located in the states of Illinois,
Kansas and Missouri described therein to the extent a security interest can be
created in such Collateral under Article 9 of the Uniform Commercial Code as in
effect in the states of Illinois, Kansas and Missouri. We have examined the
Financing Statements to be filed in the filing offices (the "UCC Filing
Offices") listed for the Loan Parties on Schedule III attached hereto, and upon
the filing of the Financing Statements in the UCC Filing Offices, the Collateral
Agent shall have a perfected security interest in those items and types of
Collateral described in the Security Agreement which are located or deemed
located in Illinois, Missouri or Kansas and in which a security interest may be
perfected by filing a financing statement under Article 9 of the UCC (the "UCC
Collateral").
8. Neither the Administrative Agent, the Collateral Agent nor any
Lender is required to pay any tax or be qualified to do business or file any
designation for service of process or file any reports in the States of
Illinois, Missouri and Kansas or comply with any statutory or regulatory rule or
requirement applicable only to financial institutions chartered or qualified to
do business in the States of Illinois, Missouri and Kansas solely by reason of
its execution and delivery or acceptance of the Mortgage or the other Agreements
or by reason of its participation in any of the transactions under or
contemplated by the Credit Agreement, including, without limitation, the making
of any Loan, the issuance of any Letter of Credit, the making and receipt of
payments pursuant thereto, and the exercise of any right or remedy under or with
respect to the Mortgage, the Credit Agreement or the Security Agreement, and the
validity of the Mortgage and the other Agreements will not be affected by any
failure to so qualify or file. In the states of Missouri and Kansas, the
Administrative Agent, the Collateral Agent and/or the Lender may be required to
quality to do business in such states if, in the exercise of their rights and
remedies, they operate or otherwise conduct business on or with the property
secured by the Mortgage or the Security Agreement.
9. Recording the Mortgage creates (i) a valid mortgage or deed of trust
lien upon such of the Mortgaged Property described therein as constitutes real
property under the law of the States of Illinois, Missouri and Kansas (the "Real
Property") and (ii) a valid security interest in such of the other Mortgaged
Property described therein as is subject to the provisions of Article 9 of the
UCC to the extent such security interest may be perfected by filing under the
UCC in the states of Illinois, Kansas and Missouri (the "UCC Property"), in each
case in favor of the Collateral Agent for the ratable benefit of the Secured
Parties. The recording of the Mortgage in the offices designated in Schedule II
hereto are the only filings, recordings and registrations necessary to perfect,
publish notice of and preserve the Lien of and security interest in the Real
Property located with the county in which each such office is located.
10. Except for the mortgage recordation tax payable in Kansas, no taxes
or other charges, including, without limitation, intangible or documentary stamp
taxes, mortgage or recording taxes, transfer taxes or similar charges, are
payable to the State of Illinois, Missouri or Kansas or to any jurisdiction
therein on account of the execution or delivery of the Mortgage, the Security
Agreement or the other Agreements, the creation of the indebtedness evidenced or
secured thereby, the creation of the Liens and security interests thereunder, or
the filing, recording or registration of the Mortgage or the Financing
Statements, except for nominal filing or recording fees.
11. The Liens and security interests created by the Mortgage and the
Security Agreement on or in the Mortgaged Property and the UCC Property validly
secure the payment of all future Loans made by the Lenders to, and reimbursement
obligations with respect to future Letters of Credit issued for the account of
the Borrower, whether or not at the time such Loans are made or Letters of
Credit are issued an Event of Default or other event not within the control of
the Lenders has relieved or may relieve the Lenders from their obligations to
make such Loans or the Issuing Bank from their obligations to issue Letters of
Credit, and are perfected to the extent set forth in paragraph 7 above with
respect to such future Loans and Letters of Credit. The priority of the Liens
and security interests created by the Mortgage and the Security Agreement will
be the same with respect to future Loans and Letters of Credit as with respect
to Loans made and Letters of Credit issued on the date hereof, except to the
extent that any priority may be affected by any security interest, Lien or other
encumbrance imposed by law in favor of any government or governmental authority
or agency and, with respect to Illinois, except to the extent that such future
loans are made, or future Letters of Credit are issued, more than twenty (20)
years from the date hereof. The foregoing opinions in this paragraph 11
concerning the creation of valid security interests in and priority of future
loans and reimbursement of future Letters of Credit are valid only up to the
maximum amount as set forth in each mortgage. We call to your attention the fact
that the Mortgage covering Real Property in Kansas will not secure future
advances unless (i) the additional Loans are the same kind or quality or relate
to the same transaction or series of transactions as the original loans, or (ii)
the note or other evidence of indebtedness specifically states on its face that
it is secured by the Mortgage.
12. The Mortgage, the Security Agreement and the Financing Statements
conform to the recording requirements of the States of Illinois, Kansas and
Missouri and the Mortgage and the Security Agreement contain substantially all
of the remedial, waiver and other provisions normally contained in mortgages or
deeds of trust and security agreements used in connection with transactions of
the type and value described in the Agreements.
13. The choice of New York law to govern the Agreements (other than the
Mortgage) in which such choice is stipulated is an effective choice of law,
except where there is no logical or reasonable basis for the choice of New York
law and except where the choice of New York law infringes upon a fundamental
policy of the applicable state. Under Illinois law the provision of the
Agreements (excluding the Mortgage) stating that New York law will govern those
Agreements are enforceable in Illinois so long as the court enforcing such
provisions finds that New York bears a reasonable relationship to the
transaction contemplated by the Agreements and that enforcement of the
Agreements in accordance with New York law is not dangerous, inconvenient,
immoral or contrary to the public policy of Illinois. Our opinion herein,
insofar as it relates to the enforceability of the choice of law provisions of
the Agreements designating New York law as the law applicable to the
construction and interpretation of the Agreements by courts of the State of New
York and Federal courts located within the State of New York, is predicated upon
the language of Sections 5-1401 and 5-1402 of the New York General Obligations
Law. We point out that, notwithstanding the language of Sections 5-1401 and
5-1402 of the New York General Obligations Law, state and Federal courts located
within the State of New York have taken into consideration, and may continue to
take into consideration, in determining whether to give full force and effect to
a contractual choice of law provision specifying New York law as applicable,
whether New York has contacts with the transaction at issue which are so minimal
as to make enforcing the choice of law provision inappropriate or unreasonable.
Whether the contacts between the loan transaction and the State of New York are
insufficient to support the choice of New York law specified in the Agreements
is a factual question which cannot be answered with certainty. We point out that
the creation, perfection and enforcement of any security interest in and to all
or any part of the Mortgaged Property under the Mortgage or any other Agreements
will, in all likelihood, be governed by the law of the jurisdiction in which the
Mortgaged Property is located and not by the laws of the State of New York.
14. In connection with the remedies provided in the Mortgage and the
Security Agreement:
(i) The exercise at any time and in any order of any
remedies available against the UCC Property or the UCC
Collateral relating to the Mortgaged Property located within
the States of Kansas, Missouri or Illinois, would not be
affected by, nor would the exercise at any time of such
remedies affect, the exercise of any remedies relating to the
Real Property, unless the Secured Obligations have been paid
and performed in full.
(ii) The exercise of any remedies with respect to any
security or collateral located outside of the States of
Kansas, Missouri or Illinois securing the Obligations will not
affect or limit the Administrative Agent's ability to
foreclose against, or exercise any other remedies with respect
to, the Mortgaged Property or UCC Collateral, either
contemporaneously with, or before or after the exercise of
such remedies against the Collateral located outside of the
States of Kansas, Missouri or Illinois, except to the extent
that the fair value of such security or collateral so sold or
disposed of has been appropriately applied to the payment of
such obligations, or unless such obligations have been paid
and performed in full.
(iii) There is no "one form of action" or similar law
in the States of Kansas, Missouri or Illinois which would
limit the Secured Parties to choosing only one remedy to
enforce their rights under the Mortgage and the other
Agreements.
15. To the extent so empowered under the Agreements and New York law,
the Collateral Agent will have the power without naming all of the Secured
Parties, to exercise remedies under the Mortgage in the states of Illinois and
Kansas, for the realization of the Mortgaged Property or the Collateral (as the
case may be) in its name as Collateral Agent. In the state of Missouri, the
trustee will have the power without naming all of the Secured Parties, to
exercise remedies under the Mortgage.
16. The making of the Loans and the application of the proceeds thereof
by the Loan Parties as provided in the Agreements will not result in a violation
of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
Our opinions as herein expressed are subject to the following
qualifications and limitations:
1. Our opinions are subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws.
This exception includes:
(a) the Federal Bankruptcy Code and thus comprehends, among
others, matters of turn-over, automatic stay, avoiding powers,
fraudulent transfer, preference, discharge, conversion of a
non-recourse obligation into a recourse claim, limitations on ipso
facto and anti-assignment clauses and the coverage of pre-petition
security agreements applicable to property acquired after a petition is
filed;
(b) all other Federal and state bankruptcy, insolvency,
reorganization, receivership, moratorium, arrangement and assignment
for the benefit of creditors laws that affect the rights of creditors
generally or that have reference to or affect only creditors of
specific types of debtors;
(c) state fraudulent transfer and conveyance laws; and
(d) judicially developed doctrines in this area, such as
substantive consolidation of entities and equitable subordination.
2. Our opinions are subject to the effect of general principles
of equity, whether applied by a court of law or equity. This limitation
includes principles:
(a) governing the availability of specific performance,
injunctive relief or other equitable remedies, which generally place
the award of such remedies, subject to certain guidelines, in the
discretion of the court to which application for such relief is made;
(b) affording equitable defenses (e.g., waiver, latches
and estoppel) against a party seeking enforcement;
(c) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its
enforcement;
(d) requiring reasonableness in the performance and
enforcement of an agreement by the party seeking enforcement of the
contract;
(e) requiring consideration of the materiality of
(i) a breach and (ii) the consequences of the breach to the party
seeking enforcement;
(f) requiring consideration of the impracticability
or impossibility of performance at the time of attempted enforcement;
and
(g) affording defenses based upon the unconscionability of the
enforcing party's conduct after the parties have entered into the
contract.
3. Our opinions are subject to the effect of the rules of law
that:
(a) limit or affect the enforcement of provisions of a
contract that purport to waive, or to require waiver of, (i) the
obligations of good faith, fair dealing, diligence and reasonableness,
(ii) broadly or vaguely stated rights, (iii) statutory, regulatory or
constitutional rights, except to the extent that the statute,
regulation or constitution explicitly allows waivers; (iv) unknown
future defenses; and (v) rights to damages.
(b) provide that choice of law, forum selection, consent to
jurisdiction, consent to and specification of service of process and
jury waiver clauses in contracts may not be enforceable.
(c) limit the enforceability of provisions releasing,
exculpating or exempting a party from, or requiring indemnification
of a party for, liability for its own action or inaction;
(d) may, where less than all of a contract may be
unenforceable, limit the enforceability of the balance of the contract
to circumstances in which the unenforceable portion is not an essential
part of the agreed exchange;
(e) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees and other
costs;
(f) may permit a party that has materially failed to render or
offer performance required by the contract to cure that failure unless
(i) permitting a cure would unreasonably hinder the aggrieved party
from making substitute arrangements for performance, or (ii) it was
important in the circumstances to the aggrieved party that performance
occur by the date stated in the contract;
(g) limit the right of a creditor to use force or cause a
breach of the peace in enforcing rights;
(h) relate to the sale of disposition of collateral or
the requirements (including, without limitation, notice) of a
commercially reasonable sale;
(i) may in the absence of a contemporaneous waiver or consent,
discharge a guarantor to the extent that (i) action by a creditor
impairs the value of collateral security for guaranteed debt to the
detriment of a guarantor, or (ii) a guaranteed obligation is materially
modified; or
(j) may restrict or prohibit the ability of the Collateral
Agent to collect rents and profits prior to the time the Collateral
Agent takes legal possession.
4. We express no opinion as to the laws of any jurisdiction other than
the laws of the States of Illinois, Missouri, Kansas and New York (excluding, in
each case, local laws), Delaware corporate laws and the federal laws of the
United States of America. Our opinions herein are expressly limited to the
application and interpretation of the laws of each state by a court of competent
jurisdiction in that state only.
5. Except to the extent that such issues are specifically
addressed herein, we express no opinion as to any of the following legal issues:
(a) pension and employee benefit laws and regulations
(e.g., ERISA);
(b) compliance with fiduciary duty requirements;
(c) fraudulent transfer and fraudulent conveyance laws;
(d) Federal and state tax laws and regulations;
(e) Federal and state laws, regulations and policies
concerning (i) national and local emergency, (ii) possible judicial
deference to acts of sovereign states, and (iii) criminal and civil
forfeiture laws;
(f) Federal and state securities laws and regulations; and
(g) Other Federal and state statutes of general application
to the extent they provide for criminal prosecution (e.g., mail fraud
and wire fraud statutes).
6. We call to your attention the fact that the perfection of the
security interests subject to our opinions, to the extent that perfection
requires the filing of financing statements under the UCC, will be terminated
(a) as to any Collateral acquired by the Loan Parties more than four months
after such Person changes name, identity or corporate structure so as to make
the Financing Statements seriously misleading, unless new appropriate financing
statements indicating the new name, identity or corporate structure of such
Person are properly filed before the expiration of such four month period, and
(b) as to any Collateral consisting of accounts or general intangibles, four
months after any of the Loan Parties changes its chief executive office to a new
jurisdiction unless such security interests are perfected in such new
jurisdiction before that termination.
7. Our opinions in paragraphs 6 and 7 above are subject to the
following qualifications:
(a) The enforcement of the Security Agreement may be subject
to rights of lessees or account debtors, the terms of leases or other
contracts between the Loan Parties and such lessees or account debtors
or other contacts between the Loan Parties and such lessees or account
debtors arising under or outside such leases or other contracts;
(b) We call to your attention that in the case of instruments
(as such term is defined in Article 9 of the UCC) not constituting part
of chattel paper (as such term is defined in Article 9 of the UCC),
security interests therein cannot be perfected by the filing of the
Financing Statements but will be perfected if possession of such
instruments is obtained in accordance with the provisions of Articles 8
and 9 of the UCC.
(c) We call to your attention the fact that in the case of all
Collateral, Article 9 of the applicable UCC requires the filing of
continuation statements within the period of six months prior to the
expiration of five years from the date of the original filings, in
order to maintain the effectiveness of the filings referred to in this
opinion;
(d) We call to your attention that your security interest in
such collateral consisting of proceeds is limited to the extent set
forth in Section 9-306 of UCC.
8. We express no opinion as to:
(a) the existence of any Person's ownership rights in or title
to, or priority of any lien on or with respect to, any property or
assets, including the Collateral;
(b) the validity, perfection or priority of any liens subject
to our opinion above as they relate to any interest in or claim in or
under any policy of insurance, except a claim to proceeds payable by
reason of loss or damage under insurance policies maintained with
respect to Collateral as required by and in compliance with the
Security Agreement;
(c) the validity, perfection or priority of any liens with
respect to any property or assets which are excluded under Section
9-104 of the UCC, including, without limitation, any patents,
trademarks and copyrights, which are subject to (x) a statute or treaty
of the United States which provides for a national or international
registration or a national or international certificate of title for
the perfection or recordation of a lien therein or which specifies a
place of filing different from that specified in the UCC for filing to
perfect or record such lien or (y) a certificate of title statute;
(d) collateral consisting of claims against any government or
governmental agency (including without limitation the United States of
America or any state thereof or any agency or department of the United
States of America or any state thereof);
(e) the enforceability of any provision purporting to govern
submission to jurisdiction or forum selection or to effect any waiver
of objection to venue or that a court is an inconvenient forum, to the
extent that any relevant action or proceeding is not in consideration
of and does not at all relevant times relate to and constitute an
obligation arising out of a transaction covering, in the aggregate, not
less than $l,000,000, or to the extent that the validity, binding
effect or enforceability of any such provision is to be determined by
any court other than a court of the State of New York or a Federal
court located in the State of New York;
(f) the enforceability of any provision purporting to give
Lenders the right to pursue remedies in contravention of ss.ss. 1301
and 1371 of the New York Real Property Actions and Proceedings Law;
(g) the enforceability of any provision purporting to give
Lenders the right to obtain a default order or judgment against the
Loan Parties in the absence of such party's (or such party's duly
appointed agent's) actual receipt of service of a summons and complaint
(or other appropriate legal process papers) or to accelerate
obligations, exercise remedies or foreclose upon collateral without any
notice to the Loan Parties;
(h) the enforceability of any provision purporting to cause an
indemnification, guaranty or undertaking to survive repayment of the
Loan or the satisfaction, foreclosure, settlement, discharge or other
termination of the Loan and the Agreements;
(i) the enforceability of any provision purporting to limit
the ability of the Loan Parties to transfer (voluntarily or
involuntarily, by way of sale, creation of a security interest,
attachment, levy, garnishment or other judicial process) its right,
title or interest in or to any Collateral to the extent the same is
deemed an undue restraint on alienation;
(j) the enforceability of any provision requiring or relating
to the payment of interest (or discount or equivalent amounts) or any
premium or "make whole" payment at a rate or in an amount, after the
maturity or after or upon acceleration of the respective liabilities
evidenced or secured thereby, or after or during the continuance of any
default, event of default or other circumstance, or upon prepayment,
which a court may determine to be unreasonable, a penalty or a
forfeiture;
(k) the enforceability of any provision purporting to create
or waive a trust, agency, attorney-in-fact or other fiduciary
relationship;
(l) the enforceability of any provision purporting to grant a
security interest in or a Lien on any after-acquired Collateral to the
extent such Collateral consists of real property or any interest
therein; or
(m) the enforceability of any provision purporting to
incorporate other documents, instruments or exhibits by reference and
no opinions afforded herein are given with respect to any document,
instrument, or exhibit so incorporated or referenced.
9. The provisions regarding the remedies available to the Collateral
Agent on default as set forth in the Mortgages may be subject to certain
procedural requirements that are not expressly stated in the Mortgages.
10. We express no opinion with respect to any of the following
provisions if they are contained in any of the Agreements (i) self-help,
non-judicial remedies or provisions purporting to grant a right of possession
without resort to judicial action, (ii) any provisions that entitle the
Collateral Agent, as a matter of right, to the appointment of a receiver, (iii)
any provisions imposing penalties, forfeitures, increased interest rates and/or
late payment charges upon delinquency in payment or the occurrence of a default,
(iv) any provision that authorizes the entry of a confession of judgment, (v)
any provision pursuant to which a party has granted to another party any power
to execute documents, settle claims or appear in judicial proceedings on behalf
of such party or to take any other action on behalf of such party, and (vi) any
power of sale or other provision granting to Administrative Agent a right to
foreclose on the Mortgaged Property non-judicially.
11. We offer no opinion on whether a court would give effect to the
provisions of the Mortgages that purport to create an absolute assignment rather
than a collateral assignment or that state that the rents due under any leases
do not constitute property of the Loan Parties (or of any estate of the Loan
Parties) within the meaning of 11 U.S.C. ss. 541.
12. If, and to the extent, any of the Agreements are construed to
provide for the payment of interest on interest, such provisions may be
unenforceable under Bowman v. Neely, 137 Ill. 443 (1891) and other cases to the
same effect. While such cases have not been overruled and it is possible that a
court would follow such precedent, we believe that such cases are unlikely to be
held applicable today in commercial real estate transactions, but render no
opinion with respect to such issue.
13. We have not reviewed and do not opine as to compliance by the
Mortgaged Property with applicable zoning, health, safety, building,
environmental, land use or subdivision laws, ordinances, codes, rules or
regulations.
14. We draw your attention to the fact that 735 ILCS 5/15-1602 grants a
mortgagor the right, which in certain circumstances is exercisable not more than
one in any five year period, to cure the default of a loan secured by real
estate within certain time periods specified in such statute.
15. We express no opinion as to whether the descriptions of the
Mortgaged Property are sufficiently detailed to cause the Mortgage to create a
Lien thereon.
16. We call to your attention the fact that in the case of licenses or
permits, the Loan Parties may not have sufficient rights therein for your
security interest to attach and even if the a Loan Party has sufficient rights
for your security interest to attach, exercise of remedies may be limited by the
terms of the license or permit or require the consent of the issuer of such
license or permit.
17. We call your attention to the fact that the enforceability of any
provision purporting to require the Loan Parties to execute promissory notes in
the future is subject to general principles of equity, and the discretion of a
court of equity as to whether such a provision should be enforced.
This opinion is rendered on the date hereof and we have no continuing
obligation hereunder to inform you of changes of law or fact subsequent to the
date hereof or facts of which we have become aware after the date hereof. This
opinion covers matters as of the date hereof and does not address events which
take place after the date hereof but are contemplated by any of the Agreements,
including, without limitation any agreements or amendments to the Agreements
executed after the date hereof.
This opinion is limited to the matters set forth herein; no opinion may
be inferred or implied beyond the matters expressly stated in this letter.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other Person (other than your successors and assigns as
Lenders and Persons that acquire participations in your Loans) without our prior
written consent.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
SCHEDULE I
Caymex Transportation, Inc. SCC Holdings, Inc.
Delaware (domestic) Delaware (domestic)
Gateway Eastern Railway Company Southern Development Company
Illinois (domestic) Missouri (domestic)
Gateway Western Railway Company Southern Industrial Services, Inc.
Illinois (domestic) Delaware (domestic)
Kansas Kansas
Missouri Missouri
Global Terminaling Services, Inc. The Kansas City Southern Railway
Delaware (domestic) Company
Missouri Alabama
Texas Arkansas
Kansas
Kansas City Southern Industries, Inc. Louisiana
Missouri (domestic) Missouri (domestic)
Oklahoma
Kansas City Southern Lines, Inc. Tennessee
Delaware (domestic)
Missouri Trans-Serve, Inc.
Arkansas
KCS Transportation Company Delaware (domestic)
Delaware (domestic) Louisiana
Missouri
Veals, Inc.
Mid-South Microwave, Inc. Arkansas
Arkansas Delaware (domestic)
Delaware (domestic) Kansas
Kansas Louisiana
Louisiana Missouri
Missouri Oklahoma
Oklahoma
Texas
Rice-Carden Corporation
Arkansas
Louisiana
Missouri (domestic)
Oklahoma
Texas
SCHEDULE I
Berger, LLC
Colorado (domestic)
Nevada
Janus Capital Corporation
Colorado (domestic)
Janus Capital International Ltd.
Colorado (domestic)
Connecticut
Janus Distributors, Inc.
Colorado (domestic)
Janus Service Corporation
Colorado (domestic)
Texas
Stilwell Financial, Inc.
Colorado (domestic)
Missouri
Stilwell Management, Inc.
Colorado (domestic)
Schedule II
To
Opinion of Sonnenschein Nath & Rosenthal
- ---------------------------------------------------- --------------------------
Form of Mortgage Counties
- ---------------------------------------------------- --------------------------
- ---------------------------------------------------- --------------------------
Jackson
Form of Mortgage [Deed of Trust] to be Cass
Filed in Missouri/Borrower as Bates
Mortgagor/Grantor Vernon
Barton
Jasper
Newton
McDonald
--------------------------
- ---------------------------------------------------- --------------------------
Form of Mortgage to be filed in Crawford
Kansas/Borrower as Mortgagor
--------------------------
- ---------------------------------------------------- --------------------------
Form of Mortgage [Deed of Trust] to be
filed in Missouri/Southern Development Jackson, Missouri
Corporation as Mortgagor/Grantor
- ---------------------------------------------------- --------------------------
--------------------------
Sangamon, IL
Morgan
Form of Mortgage to be filed in Illinois Scott
against Gateway Western Railway Greene
Company Jersey
Madison
St. Clair
Pike
- ----------------------------------------------------
- ---------------------------------------------------- --------------------------
Pike
Audrain
Form of Mortgage to be filed in Missouri Callaway
against Gateway Western Railway Randolph
Company Boone
Howard
Saline
Lafeyette
Jackson
Ralls
- ----------------------------------------------------
- ---------------------------------------------------- --------------------------
Form of Mortgage [Deed of Trust] to be Cass, Missouri
filed in Missouri/Rice-Carden Corporation as Jackson, Missouri
Grantor Vernon, Missouri
Moniteau, Missouri
- ----------------------------------------------------
- ---------------------------------------------------- --------------------------
Form of Mortgage [Deed of Trust] to be
filed in Kansas/Rice-Carden Corporation Johnson, Kansas
as Grantor Linn, Kansas
- ---------------------------------------------------- --------------------------
Schedule III
To
Opinion of Sonnenschein Nath & Rosenthal
- ---------------------------------------------------- ---------------------------
Debtor Jurisdiction of Filing
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Caymex Transportation, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Caymex Transportation, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Eastern Railway Company SOS, IL
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Eastern Railway Company SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Eastern Railway Company Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company SOS, IL
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Audrain County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Boone County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Callaway County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Howard County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Lafayette County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Pike County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Ralls County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Randolph County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Gateway Western Railway Company Saline County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Global Terminaling Services, Inc. SOS, DE
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Global Terminaling Services, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Global Terminaling Services, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
KCS Transportation Company SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Debtor Jurisdiction of Filing
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
KCS Transportation Company Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Kansas City Southern Industries, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Kansas City Southern Industries, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Kansas City Southern Lines, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Kansas City Southern Lines, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
The Kansas City Southern Railway SOS, KS
Company
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
The Kansas City Southern Railway SOS, MO
Company
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
The Kansas City Southern Railway Cass County, MO
Company
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
The Kansas City Southern Railway Jackson County, MO
Company
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Mid-South Microwave, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Mid-South Microwave, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation SOS, KS
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation Cass County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation Moniteau County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Rice-Carden Corporation Vernon County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
SCC Holdings Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
SCC Holdings Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Southern Development Company SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Southern Development Company Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Southern Industrial Services, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Southern Industrial Services, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Trans-Serve, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Trans-Serve, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. Bates County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. SOS, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. Cass County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. Jackson County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. Jasper County, MO
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Veals, Inc. Newton County, MO
- ---------------------------------------------------- ---------------------------
2
21042580\V-1
EXHIBIT C
GUARANTEE AGREEMENT dated as of January 11,
2000, among KANSAS CITY SOUTHERN INDUSTRIES, INC., a
Delaware corporation ("Holdings"), each Subsidiary of
Holdings listed on Schedule I hereto or becoming a
party hereto as provided in Section 19 hereof (each
individually, a "Subsidiary Guarantor" and,
collectively, together with Holdings, the
"Guarantors") and THE CHASE MANHATTAN BANK ("Chase"),
as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement
referred to below).
Reference is made to the Credit Agreement dated as of January 11, 2000
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Holdings, The Kansas City Southern Railway Company, a
Missouri corporation (the "Borrower"), the lenders from time to time party
thereto (the "Lenders") and Chase, as administrative agent (in such capacity,
the "Administrative Agent"), collateral agent (in such capacity, the "Collateral
Agent") and issuing bank (in such capacity, the "Issuing Bank") Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower and the
Issuing Bank has agreed to issue Letters of Credit pursuant to, and upon the
terms and subject to the conditions specified in, the Credit Agreement. Each of
the Guarantors acknowledges that it will derive substantial benefit from the
making of the Loans by the Lenders and the issuance of the Letters of Credit by
the Issuing Bank. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit are conditioned on, among other things,
the execution and delivery by the Guarantors of this Agreement. In order to
induce the Lenders to make Loans and the Issuing Bank to issue the Letters of
Credit, the Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary
obligor and not merely as a surety, (a) the due and punctual payment by the
Borrower or the applicable Loan Parties of (i) the principal of and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of Holdings, the Borrower or
any other Subsidiary to the Secured Parties under the Credit Agreement or any
other Loan Document, (b) the due and punctual payment and performance of all
covenants, agreements, obligations, and liabilities of the Loan Parties,
monetary or otherwise, under or pursuant to the Credit Agreement and the other
Loan Documents and (c) the due and punctual payment of all obligations of the
Borrower under each Hedging Agreement entered into (i) prior to the date hereof
with any counterparty that is a Lender (or an Affiliate thereof) on the date
hereof or (ii) on or after the date hereof with any counterparty that is a
Lender (or an Affiliate thereof) at the time such Hedging Agreement is entered
into, in either case to provide protection against interest rate fluctuations
(all the obligations referred to in the preceding clauses (a) through (c) being
collectively called the "Obligations"). Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part.
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Borrower or to any other Guarantor of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest for nonpayment. To the fullest extent permitted by applicable law, the
obligations of each Guarantor hereunder shall not be affected by (a) the failure
of the Administrative Agent, the Collateral Agent, the Issuing Bank or any
Lender to assert any claim or demand or to enforce or exercise any right or
remedy against the Borrower or any other Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, this Agreement, any other Loan Document, any other Guarantee or
any other agreement, including with respect to any other Guarantor under this
Agreement, or (c) the failure of Holdings or any Subsidiary to comply with
Section 5.12 of the Credit Agreement and Section 19.
SECTION 3. Guarantee of Payment. Each Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender to
any balance of any deposit account or credit on the books of the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender in favor of the
Borrower, any other Guarantor or any other Person.
SECTION 4. No Discharge or Diminishment of Guarantee. The
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan Document or any
other instrument or agreement, by any waiver or modification of any provision of
any thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of each Guarantor as a matter of law or
equity (other than the payment in full in cash of all the Obligations).
SECTION 5. Defenses Waived. To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of the Borrower or any other Guarantor or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower or any other
Guarantor, other than the final payment in full in cash of the Obligations. The
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any Guarantor or any other
guarantor or exercise any other right or remedy available to them against any
Guarantor or any other guarantor, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully, finally and indefeasibly paid in cash. Pursuant to applicable law,
each of the Guarantors waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
such Guarantor against any other Guarantor or guarantor, as the case may be, or
any security.
SECTION 6. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender has at law or in
equity against any Guarantor by virtue hereof, upon the failure of the Borrower
to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent, the Collateral Agent, the Issuing Bank or such Lender as
designated thereby in cash the amount of such unpaid Obligation. Upon payment by
any Guarantor of any sums to the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender as provided above, all rights of such Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior payment in full in cash
of all the Obligations. In addition, any indebtedness of any Guarantor now or
hereafter held by any Guarantor is hereby subordinated in right of payment to
the prior payment in full of the Obligations. If any amount shall erroneously be
paid to any Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of any
Guarantor, such amount shall be held in trust for the benefit of the Lenders and
shall forthwith be paid to the Administrative Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Agreement or any other Loan Document.
SECTION 7. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's and the
other Guarantors' financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and agrees
that none of the Administrative Agent, the Collateral Agent, Issuing Banks and
the Lenders will have any duty to advise any of the Guarantors of information
known to it or any of them regarding such circumstances or risks.
SECTION 8. Representations and Warranties; Agreements. Each of
the Guarantors represents and warrants as to itself that all representations and
warranties relating to it contained in any Loan Document to which it is a party
are true and correct in all material respects. Each of the Guarantors agrees
that the provisions of Section 2.17 of the Credit Agreement shall apply equally
to each Guarantor with respect to payments made by it hereunder.
SECTION 9. Termination. The Guarantees made hereunder (a)
shall, subject to clause (b) below, terminate when all the Obligations have been
paid in full and the Lenders have no further commitment to lend under the Credit
Agreement and the Issuing Banks have no further commitment to issue Letters of
Credit and (b) shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of any Obligation is rescinded
or must otherwise be restored by the Administrative Agent, the Collateral Agent,
the Issuing Bank or any Lender or any Guarantor upon the bankruptcy or
reorganization of any Guarantor or otherwise.
SECTION 10. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Collateral Agent, and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Guarantor, the Administrative Agent, the Collateral Agent, the Issuing Banks and
the Lenders, and their respective successors and assigns, except that no
Guarantor shall have the right to assign its rights or obligations hereunder or
any interest herein (except in connection with any transaction permitted by
Section 6.04 of the Credit Agreement), and any such attempted assignment shall
be void. This Agreement shall be construed as a separate agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the obligations of any other Guarantor hereunder.
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender hereunder or under the Credit
Agreement or any other Loan Document are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Guarantors to which such waiver, amendment or modification relates
and the Collateral Agent (with the prior written consent of the Lenders or the
Required Lenders if required under the Credit Agreement).
SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to each Guarantor shall be
given to it in care of Holdings.
SECTION 14. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Guarantors
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the Administrative Agent, the Collateral Agent, the Issuing Banks
and the Lenders and shall survive the making by the Lenders of the Loans and the
issuance of Letters of Credit by the Issuing Banks regardless of any
investigation made by any of them or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement or any other Loan
Document is outstanding and unpaid and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 10. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a)
Each Guarantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against any Guarantor or its
properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 19. Additional Subsidiary Guarantors. Certain
additional Subsidiaries may be required from time to time, under the terms of
the Credit Agreement, to enter into this Agreement as Subsidiary Guarantors.
Upon execution and delivery by the Collateral Agent and a Subsidiary of an
instrument in the form of Annex 1, such Subsidiary shall become a Subsidiary
Guarantor hereunder with the same force and effect as if originally named as a
Subsidiary Guarantor herein. The execution and delivery of such instrument shall
not require the consent of any Subsidiary Guarantor hereunder. The rights and
obligations of each Subsidiary Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Subsidiary Guarantor as a
party to this Agreement.
SECTION 20. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each of the Administrative Agent, the Collateral
Agent, the Issuing Banks and the Lenders is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Person to or
for the credit or the account of any Guarantor against any or all the
obligations of such Guarantor now or hereafter existing under this Agreement
held by such Person, irrespective of whether or not such Person shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Person under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Person may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by
-----------------------------------
Name:
Title:
CAYMEX TRANSPORTATION, INC.,
by
-----------------------------------
Name:
Title:
GATEWAY EASTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GATEWAY WESTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GLOBAL TERMINALING SERVICES, INC.
by
-----------------------------------
Name:
Title:
KCS TRANSPORTATION COMPANY,
by
-----------------------------------
Name:
Title:
KANSAS CITY SOUTHERN LINES, INC.,
by
-----------------------------------
Name:
Title:
SCC HOLDINGS, INC.,
by
-----------------------------------
Name:
Title:
MID-SOUTH MICROWAVE, INC.,
by
-----------------------------------
Name:
Title:
RICE-CARDEN CORPORATION,
by
-----------------------------------
Name:
Title:
SOUTHERN DEVELOPMENT COMPANY,
by
-----------------------------------
Name:
Title:
SOUTHERN INDUSTRIAL SERVICES, INC.,
by
-----------------------------------
Name:
Title:
TRANS-SERVE, INC.,
by
-----------------------------------
Name:
Title:
VEALS, INC.,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Administrative Agent,
by
-----------------------------------
Name:
Title:
Schedule I to the
Guarantee Agreement
SUBSIDIARY GUARANTORS
Guarantor Address
Caymex Transportation, Inc. 114 W. 11th Street
Kansas City, MO 64105
Gateway Eastern Railway Company 114 W. 11th Street
Kansas City, MO 64105
Gateway Western Railway Company 114 W. 11th Street
Kansas City, MO 64105
Global Terminaling Services, Inc. 114 W. 11th Street
Kansas City, MO 64105
KCS Transportation Company 114 W. 11th Street
Kansas City, MO 64105
Kansas City Southern Lines, Inc. 114 W. 11th Street
Kansas City, MO 64105
Mid-South Microwave, Inc. 114 W. 11th Street
Kansas City, MO 64105
Rice-Carden Corporation 114 W. 11th Street
Kansas City, MO 64105
SCC Holdings, Inc. 114 W. 11th Street
Kansas City, MO 64105
Southern Development Company 114 W. 11th Street
Kansas City, MO 64105
Southern Industrial Services, Inc. 114 W. 11th Street
Kansas City, MO 64105
Trans-Serve, Inc. 114 W. 11th Street
Kansas City, MO 64105
Veals, Inc. 114 W. 11th Street
Kansas City, MO 64105
21042580\V-1
ANNEX 1 to the
Guarantee Agreement
SUPPLEMENT NO. dated as of , to the GUARANTEE
AGREEMENT dated as of January 11, 2000, among KANSAS
CITY SOUTHERN INDUSTRIES, INC., a Delaware
corporation ("Holdings"), each Subsidiary of Holdings
listed on Schedule I thereto or becoming a party
thereto as provided in Section 19 thereof (each
individually, a "Subsidiary Guarantor" and,
collectively, together with Holdings, the
"Guarantors") and THE CHASE MANHATTAN BANK ("Chase"),
as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement
referred to below).
A. Reference is made to the Credit Agreement dated as of
January 11, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Holdings, The Kansas City Southern Railway
Company, a Missouri corporation (the "Borrower"), the lenders from time to time
party thereto (the "Lenders"), and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank")
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
B. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Guarantee Agreement and
the Credit Agreement.
C. The Subsidiary Guarantors have entered into the Guarantee
Agreement in order to induce the Lenders to make Loans and the Issuing Banks to
issue Letters of Credit. The undersigned Subsidiary of Holdings (the "New
Subsidiary Guarantor") is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Guarantor under the
Guarantee Agreement in order to induce the Lenders to make additional Loans and
as consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Subsidiary
Guarantor agree as follows:
SECTION 1. In accordance with Section 19 of the Guarantee
Agreement, the New Subsidiary Guarantor by its signature below becomes a
Subsidiary Guarantor under the Guarantee Agreement with the same force and
effect as if originally named therein as a Subsidiary Guarantor and the New
Subsidiary Guarantor hereby (a) agrees to all the terms and provisions of the
Guarantee Agreement applicable to it as a Subsidiary Guarantor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Subsidiary Guarantor thereunder are true and correct on and as of the date
hereof. Each reference to a "Subsidiary Guarantor" in the Guarantee Agreement
shall be deemed to include the New Subsidiary Guarantor. The Guarantee Agreement
is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Administrative Agent, the Issuing Banks and the Lenders that
this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Administrative Agent shall have received counterparts of this Supplement
that, when taken together, bear the signatures of the New Subsidiary Guarantor
and the Administrative Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and in the Guarantee Agreement shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 13 of the Guarantee Agreement.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse
the Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Supplement, including the fees, disbursements and other charges of
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Administrative Agent have duly executed this Supplement to the Guarantee
Agreement as of the day and year first above written.
[Name Of New Subsidiary Guarantor],
by _________________________
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by _________________________
Name:
Title:
6
EXHIBIT D
INDEMNITY, SUBROGATION and CONTRIBUTION
AGREEMENT dated as January 11, 2000, among KANSAS
CITY SOUTHERN INDUSTRIES, INC., a Delaware
corporation ("Holdings"), THE KANSAS CITY SOUTHERN
RAILWAY COMPANY, a Missouri Corporation (the
"Borrower"), each other Subsidiary of Holdings listed
on Schedule I hereto or becoming a party hereto as
provided in Section 12 hereof (each individually, a
"Subsidiary Guarantor" and, collectively, together
with Holdings and the Borrower, the "Guarantors") and
THE CHASE MANHATTAN BANK ("Chase"), as collateral
agent (the "Collateral Agent") for the Secured
Parties (as defined in the Credit Agreement referred
to below).
Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the accounts of the Borrower,
pursuant to and upon the terms and subject to the conditions specified in the
Credit Agreement. The Guarantors have guaranteed such Loans and the other
Obligations (as defined in the Guarantee Agreement) of the Borrower under the
Credit Agreement pursuant to the Guarantee Agreement; certain Guarantors have
granted Liens on and security interests in certain of their assets to secure
such guarantees. The obligations of the Lenders to make Loans are conditioned
on, among other things, the execution and delivery by the Borrower and the
Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral Agent
agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), Holdings and the Borrower agree that (a) in the event a
payment shall be made by any Subsidiary Guarantor under the Guarantee Agreement,
Holdings and the Borrower shall jointly and severally indemnify such Subsidiary
Guarantor for the full amount of any such payment and such Subsidiary Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Subsidiary Guarantor shall be sold pursuant to any Security Document to satisfy
a claim of any Secured Party, Holdings and the Borrower shall jointly and
severally indemnify such Subsidiary Guarantor in an amount equal to the greater
of the book value or the fair market value of the assets so sold in respect of
Obligations.
SECTION 2. Contribution and Subrogation. Each Subsidiary Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Subsidiary Guarantor under the Guarantee
Agreement or assets of any other Subsidiary Guarantor shall be sold pursuant to
any Security Document to satisfy a claim of any Secured Party and such other
Subsidiary Guarantor (the "Claiming Guarantor") shall not have been fully
indemnified by Holdings and the Borrower as provided in Section 1, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, in each case multiplied by a
fraction of which the numerator shall be the net worth of the Contributing
Guarantor on the date hereof and the denominator shall be the aggregate net
worth of all the Contributing Guarantors on the date hereof (or, in the case of
any Subsidiary Guarantor becoming a party hereto pursuant to Section 12, the
date of the Supplement hereto executed and delivered by such Subsidiary
Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 2 shall be subrogated to the rights of such
Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Subsidiary Guarantors under
Sections 1 and 2 and all other rights of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of all Obligations which are then due and
payable whether at maturity, by acceleration or otherwise. No failure on the
part of Holdings, the Borrower or any Subsidiary Guarantor to make the payments
required by Sections 1 and 2 (or any other payments required under applicable
law or otherwise) shall in any respect limit the obligations and liabilities of
any Guarantor with respect to its obligations hereunder, and each Guarantor
shall remain liable for the full amount of the obligations of such Guarantor
hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the LC Exposure has not been
reduced to zero or any of the Commitments under the Credit Agreement have not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Guarantor
upon the bankruptcy or reorganization of the Borrower, any Guarantor or
otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
Collateral Agent or any Guarantor to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by the
Collateral Agent or any Guarantor preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. None of
the Collateral Agent and the Guarantors shall be deemed to have waived any
rights hereunder unless such waiver shall be in writing and signed by such
parties.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
Holdings, the Guarantors and the Collateral Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be
in writing and given as provided in the Credit Agreement and addressed as
specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the parties that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns. Neither Holdings nor any Guarantor may assign or transfer any of its
rights or obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required Lenders.
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such Guarantee
Agreement and the Credit Agreement, such Guarantor will cease to have any rights
or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by Holdings and each Guarantor herein and in the certificates or
other instruments prepared or delivered in connection with this Agreement or the
other Loan Documents shall be considered to have been relied upon by the
Collateral Agent, the other Secured Parties and each Guarantor and shall survive
the making by the Lenders of the Loans and the issuance of the Letters of Credit
by the Issuing Bank and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loans or any other fee or amount
payable under the Credit Agreement or this Agreement or under any of the other
Loan Documents is outstanding and unpaid or the L/C Exposure does not equal zero
and as long as the Commitments have not been terminated.
(b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor when a counterpart bearing the signature of such
Guarantor shall have been delivered to the Collateral Agent. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 12. Additional Guarantors. Certain additional Subsidiaries may
be required from time to time, under the terms of the Credit Agreement, to enter
into the Guarantee Agreement as a Guarantor. Upon execution and delivery, after
the date hereof, by the Collateral Agent and such a Subsidiary of an instrument
in the form of Annex 1 hereto, such Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor
hereunder. The execution and delivery of any instrument adding an additional
Guarantor as a party to this Agreement shall not require the consent of any
Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
THE CHASE MANHATTAN BANK, as Collateral Agent,
By
----------------------------
Name:
Title:
KANSAS CITY SOUTHERN INDUSTRIES, INC.
By
----------------------------
Name:
Title:
THE KANSAS CITY SOUTHERN RAILWAY COMPANY,
By
----------------------------
Name:
Title:
CAYMEX TRANSPORTATION, INC.,
by
-----------------------------------
Name:
Title:
GATEWAY EASTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GATEWAY WESTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GLOBAL TERMINALING SERVICES, INC.
by
-----------------------------------
Name:
Title:
KCS TRANSPORTATION COMPANY,
by
-----------------------------------
Name:
Title:
KANSAS CITY SOUTHERN LINES, INC.,
by
-----------------------------------
Name:
Title:
SCC HOLDINGS, INC.,
by
-----------------------------------
Name:
Title:
MID-SOUTH MICROWAVE, INC.,
by
-----------------------------------
Name:
Title:
RICE-CARDEN CORPORATION,
by
-----------------------------------
Name:
Title:
SOUTHERN DEVELOPMENT COMPANY,
by
-----------------------------------
Name:
Title:
SOUTHERN INDUSTRIAL SERVICES, INC.,
by
-----------------------------------
Name:
Title:
TRANS-SERVE, INC.,
by
-----------------------------------
Name:
Title:
VEALS, INC.,
by
-----------------------------------
Name:
Title:
Schedule I to the
Indemnity, Subrogation
and Contribution Agreement
SUBSIDIARY GUARANTORS
Guarantor Address
Caymex Transportation, Inc. 114 W. 11th Street
Kansas City, MO 64105
Gateway Eastern Railway Company 114 W. 11th Street
Kansas City, MO 64105
Gateway Western Railway Company 114 W. 11th Street
Kansas City, MO 64105
Global Terminaling Services, Inc. 114 W. 11th Street
Kansas City, MO 64105
KCS Transportation Company 114 W. 11th Street
Kansas City, MO 64105
Kansas City Southern Lines, Inc. 114 W. 11th Street
Kansas City, MO 64105
Mid-South Microwave, Inc. 114 W. 11th Street
Kansas City, MO 64105
Rice-Carden Corporation 114 W. 11th Street
Kansas City, MO 64105
SCC Holdings, Inc. 114 W. 11th Street
Kansas City, MO 64105
Southern Development Company 114 W. 11th Street
Kansas City, MO 64105
Southern Industrial Services, Inc. 114 W. 11th Street
Kansas City, MO 64105
Trans-Serve, Inc. 114 W. 11th Street
Kansas City, MO 64105
Veals, Inc. 114 W. 11th Street
Kansas City, MO 64105
Annex 1 to the
Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the Indemnity,
Subrogation and Contribution Agreement dated as
January 11, 2000, among KANSAS CITY SOUTHERN
INDUSTRIES, INC., a Delaware corporation
("Holdings"), THE KANSAS CITY SOUTHERN RAILWAY
COMPANY, a Missouri Corporation (the "Borrower"),
each Subsidiary of Holdings listed on Schedule I
thereto or becoming a party thereto as provided in
Section 12 thereof (each individually, a "Subsidiary
Guarantor" and, collectively, together with Holdings
and the Borrower, the "Guarantors") and THE CHASE
MANHATTAN BANK ("Chase"), as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as of January
11, 2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Lenders"), and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement. The rules of construction set forth in Section 1.03 of the
Credit Agreement shall apply equally to this Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.
C. Holdings and the Subsidiary Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Lenders
to make Loans and the Issuing Bank to issue Letters of Credit. Certain
additional Subsidiaries may be required from time to time, under the terms of
the Credit Agreement, to enter into the Guarantee Agreement as a Guarantor upon
becoming a Subsidiary Loan Party. Section 12 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries may become
Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Guarantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Indemnity, Subrogation and Contribution Agreement in order to induce
the Lenders to make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation
and Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor. The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
2
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[NAME OF NEW GUARANTOR],
By_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Collateral Agent,
By_______________________________
Name:
Title:
21042580\V-1
Schedule I to Supplement No. [ ]
to the Indemnity, Subrogation and
Contribution Agreement
GUARANTORS
Name Address
EXHIBIT E
PLEDGE AGREEMENT dated as of January 11,
2000, among KANSAS CITY SOUTHERN INDUSTRIES, INC., a
Delaware corporation ("Holdings"), THE KANSAS CITY
SOUTHERN RAILWAY COMPANY, INC., a Missouri
corporation (the "Borrower"), each other Subsidiary
of Holdings listed on Schedule I hereto or becoming a
party hereto as provided in Section 24 (collectively,
the "Subsidiary Pledgors"; Holdings, the Borrower and
the Subsidiary Pledgors being referred to
collectively as the "Pledgors") and THE CHASE
MANHATTAN BANK, ("Chase"), as collateral agent (in
such capacity, the "Collateral Agent"), for the
Secured Parties (as defined in the Credit Agreement
referred to below).
Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement. Capitalized terms used and not otherwise defined herein shall
have meanings assigned to them in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Pledgors of a Pledge Agreement in the
form hereof to secure (a) the due and punctual payment by the Borrowers or the
applicable Loan Parties of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrowers under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties under this Agreement and the other Loan
Documents, (b) the due and punctual payment and performance of all covenants,
agreements, obligations and liabilities of the Loan Parties, monetary or
otherwise, under or pursuant to this Agreement and the other Loan Documents and
(c) unless otherwise agreed to in writing by the applicable Lender thereto, the
due and punctual payment of all obligations of the Borrower under each Hedging
Agreement entered into (i) prior to the date hereof with any counterparty that
is a Lender (or an Affiliate thereof) on the date hereof or (ii) on or after the
date hereof with any counterparty that is a Lender (or an Affiliate thereof) at
the time such Hedging Agreement is entered into, in either case to provide
protection against interest rate fluctuations in either case to provide
protection against interest rate fluctuations (all the obligations referred to
in the preceding clauses (a) through (c) being collectively called the
"Obligations"). Each Pledgor agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that the security interest granted hereunder and the obligations of each Pledgor
will survive any extension or renewal of any Obligation.
Accordingly, the Pledgors and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors and assigns),
hereby agree as follows:
12
21042580\V-1
SECTION 1. Pledge. As security for the payment in full of all
the Obligations, each Pledgor does hereby pledge, transfer, grant, bargain,
sell, convey, hypothecate, set over and deliver and create a security interest
in (collectively, "Pledge") unto the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, all such Pledgor's right, title
and interest in, to and under (i) all the outstanding Equity Interests owned by
it on the date hereof or at any time hereafter in Subsidiaries or other Persons
(but limited to 65% of the outstanding voting Equity Interests and 100% of the
outstanding non-voting Equity Interests in each such Subsidiary that is a
Foreign Subsidiary), including the Equity Interests listed on Schedule II
hereto, (ii) (A) all Indebtedness of Holdings, the Borrower, any other
Subsidiary or any other Person now owned or hereafter acquired by it, including
the Indebtedness listed on Schedule II hereto, and (B) the promissory notes and
other instruments evidencing such Indebtedness, (iii) all payments, whether of
dividends or other distributions, principal or interest or otherwise, and
whether of cash or other assets, from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the conversion of
the Equity Interests or Indebtedness pledged pursuant to clauses (i) and (ii)
above; (iv) subject to Section 5, all rights and privileges of such Pledgor with
respect to the Equity Interests, Indebtedness and other property pledged
pursuant to clauses (i), (ii) and (iii) above; and (v) all proceeds of any of
the foregoing (the collateral referred to in the preceding clauses (i) through
(v) being collectively called the "Collateral").
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral; Perfection. (a) Each
Pledgor agrees promptly to deliver or cause to be delivered to the Collateral
Agent any and all certificates or instruments representing any Equity Interests,
Indebtedness or other assets now or hereafter included in the Collateral
(collectively, the "Pledged Securities"). Upon delivery to the Collateral Agent,
all Pledged Securities shall be accompanied by stock or note powers duly
executed in blank or other instruments of transfer satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request.
(b) Each Pledgor agrees to take from time to time all such other
actions as shall be required under applicable law or reasonably requested by the
Collateral Agent to perfect and maintain the perfection of the Lien created by
this Agreement, including, in the case of any Collateral in which such Lien
cannot be perfected by the possession of certificates or instruments, the filing
of all such financing statements and similar documents, and the obtaining of all
such acknowledgments of clearing corporations, brokers and other intermediaries,
as shall be required for such perfection under the Uniform Commercial Code or
other law of any applicable jurisdiction.
(c) The Equity Interests and Indebtedness initially included in the
Collateral are set forth in Schedule II hereto. At the time any additional
Equity Interests or Indebtedness shall become part of the Collateral, the
Borrower shall deliver to the Collateral Agent a revised Schedule II, which
shall supersede all Schedules previously delivered pursuant to the requirements
of this paragraph.
(d) Each Pledgor will cause any Indebtedness owed to such Pledgor that
is evidenced by a duly executed promissory note to be pledged and delivered to
the Collateral Agent pursuant to the terms hereof. Each Pledgor agrees, without
limiting its obligations under paragraph (a) or (b) above, that to the extent it
is required to pledge any limited liability or limited partnership interest in
any Domestic Subsidiary hereunder, it will (i) make or cause to be made all
filings and take all other actions required under paragraph (b) above for the
perfection of the Collateral Agent's Lien in the limited liability company or
limited partnership interests of such Subsidiary under Article 9 of the Uniform
Commercial Code as in effect in each applicable jurisdiction and (ii) deliver to
the Collateral Agent any certificates issued to such Pledgor representing Equity
Interests of any Domestic Subsidiary that is a limited liability company or
limited partnership if such Subsidiary's limited liability company or limited
partnership agreement, as the case may be, provides that the Equity Interests of
such Subsidiary are to be represented by certificates. Each Pledgor represents
and warrants to the Collateral Agent that as of the date hereof none of the
Equity Interests of any of its Domestic Subsidiaries which are limited liability
companies or limited partnerships are represented by certificates.
SECTION 3. Representations, Warranties and Covenants. Each
Pledgor hereby represents, warrants and covenants, as to itself and the
Collateral pledged by it hereunder, to and with the Collateral Agent that:
(a) the Equity Interests pledged hereunder represent the
percentages set forth on Schedule II of the issued and outstanding
Equity Interests of each class of the issuers thereof;
(b) except for the security interest granted hereunder and
except for Permitted Encumbrances, such Pledgor (i) is and will at all
times continue to be the direct owner, beneficially and of record, of
the Collateral listed in Schedule II as being owned by it, except to
the extent permitted by Section 6.02 of the Credit Agreement, (ii)
holds the same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit
to exist any security interest in or other Lien on, the Collateral,
other than pursuant hereto, and (iv) subject to Section 5, will cause
any and all Collateral, whether for value paid by such Pledgor or
otherwise, to be forthwith deposited with the Collateral Agent and
pledged or assigned hereunder;
(c) such Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will
defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Agreement), however arising,
of all Persons whomsoever;
(d) no consent of any other Person (including equity holders
or creditors of any Pledgor) and no consent or approval of any
Governmental Authority or any securities exchange was or is necessary
to the validity of the pledge effected hereby other than such as have
been obtained;
(e) by virtue of the execution and delivery by the Pledgors of
this Agreement and the other actions that have been taken pursuant to
this Agreement, the Collateral Agent will obtain a valid and perfected
first Lien upon and security interest in the Collateral as security for
the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Secured Parties, the rights of the
Collateral Agent in the Collateral as set forth herein;
(g) all of the Equity Interests pledged hereunder have been
duly authorized and validly issued and are fully paid and
nonassessable; and
(h) all information set forth herein relating to the
Collateral is accurate and complete in all material respects as of the
date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Equity Interests pledged hereunder in
its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or
the name of the Pledgors, endorsed or assigned in blank or in favor of the
Collateral Agent. Each Pledgor will promptly give to the Collateral Agent copies
of any notices or other communications received by it with respect to pledged
Equity Interests registered in the name of such Pledgor. The Collateral Agent
shall at all times have the right to exchange any certificates representing
pledged Equity Interests for certificates of smaller or larger denominations for
any purpose consistent with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a)
Unless and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
pledged Equity Interests or any part thereof for any purpose consistent
with the terms of this Agreement, the Credit Agreement and the other
Loan Documents; provided such Pledgor will not be entitled to exercise
any such right if the result thereof would be prohibited by the Credit
Agreement or would reasonably be expected to materially and adversely
affect the rights or the rights and remedies of any of the Secured
Parties under this Agreement or the Credit Agreement or any other Loan
Document or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all
such proxies, powers of attorney and other instruments as such Pledgor
may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Pledgor shall be entitled to receive and retain any
and all cash dividends, interest and principal paid on the Equity
Interests or Indebtedness pledged hereunder to the extent and only to
the extent that such cash dividends, interest and principal are
permitted by, and otherwise paid in accordance with, the terms and
conditions of the Credit Agreement, the other Loan Documents and
applicable laws. All noncash dividends, interest and principal, and all
dividends, interest and principal paid or payable in cash or otherwise
in connection with a partial or total liquidation or dissolution,
return of capital, capital surplus or paid-in surplus, and all other
distributions (other than distributions referred to in the preceding
sentence) made on or in respect of the pledged Equity Interests and
Indebtedness, whether paid or payable in cash or otherwise, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any thereof or received
in exchange for such Equity Interests or Indebtedness or any part
thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Pledgor, shall not be commingled by
such Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of
the Collateral Agent and shall be forthwith delivered to the Collateral
Agent in the same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest or principal. All dividends, interest or
principal received by the Pledgor contrary to the provisions of this Section 5
shall be held in trust for the benefit of the Collateral Agent, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
delivered to the Collateral Agent upon demand in the same form as so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 7. After all
Events of Default have been cured or waived, the Collateral Agent shall, within
five Business Days after all such Events of Default have been cured or waived,
repay to each Pledgor all cash dividends, interest or principal (without
interest), that such Pledgor would otherwise be permitted to retain pursuant to
the terms of paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default and upon notice to the applicable Pledgor as set forth in Section 15,
all rights of any Pledgor to exercise the voting and consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section
5, and the obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 5, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
exercise such voting and consensual rights and powers. Unless otherwise directed
by the Required Lenders, the Collateral Agent shall have the right from time to
time following and during the continuance of an Event of Default to permit the
Pledgors to exercise such rights. After all Events of Default have been cured or
waived, such Pledgor will have the right to exercise the voting and consensual
rights and powers that it would otherwise be entitled to exercise pursuant to
the terms of paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, subject to applicable regulatory
and legal requirements, the Collateral Agent may sell the Collateral, or any
part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Pledgor, and, to the extent permitted by
applicable law, the Pledgors hereby waive all rights of redemption, stay,
valuation and approval any Pledgor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior written notice
(which each Pledgor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of such Pledgor's Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice of such sale. At any such sale, the Collateral, or portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured Party
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of any Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to it from such Pledgor
as a credit against the purchase price, and it may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to such Pledgor therefor. For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto (other than any
proceeds remaining after the Obligations have been paid in full),
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose upon the Collateral and to sell the Collateral or
any portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.
SECTION 7. Application of Proceeds of Sale. The proceeds of any sale of
Collateral pursuant to Section 6, as well as any Collateral consisting of cash,
shall be applied by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with such sale or otherwise in
connection with this Agreement, any other Loan Document or any of the
Obligations, including all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Pledgor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the applicable Secured Parties pro
rata in accordance with the amounts of such Obligations owed to them on
the date of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent. (a) Each Pledgor
agrees to pay upon demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by such
Pledgor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Pledgor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, other charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated thereby or (ii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto, provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a final, non-appealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) Any amounts payable under this Section shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8 shall remain operative and in full force and effect regardless
of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 8 shall be payable on written demand therefor and shall bear
interest at the rate specified in clause (c)(ii) of Section 2.13 of the Credit
Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Upon
the occurrence of and during the existence of an Event of Default each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, to ask for, demand,
sue for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral, to endorse checks, drafts,
orders and other instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Pledgor in any case shall entitle such Pledgor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Collateral Agent and the Pledgor or Pledgors with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.02 of the Credit Agreement. Each Pledgor
acknowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and such Pledgor, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Pledgor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 11. Securities Act, etc. In view of the position of
the Pledgors in relation to the Pledged Securities, or because of other current
or future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Collateral, and might also limit
the extent to which or the manner in which any subsequent transferee of any
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Collateral under applicable Blue Sky or other
state securities laws or similar laws analogous in purpose or effect. Each
Pledgor recognizes that in light of such restrictions and limitations the
Collateral Agent may, with respect to any sale of the Collateral, limit the
purchasers to those who will agree, among other things, to acquire such
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges and agrees that in
light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion, (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Collateral or part
thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale.
Each Pledgor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part of
the Collateral at a price that the Collateral Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
11 will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Collateral Agent sells.
SECTION 12.. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the grant of a security interest in the Collateral
and all obligations of each Pledgor hereunder, shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the foregoing,
(c) any exchange, release or nonperfection of any other collateral, or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Pledgor in
respect of the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 13. Releases and Termination. This Agreement and the
security interest granted hereby shall terminate when all the Obligations have
been indefeasibly paid in full, the Lenders have no further commitment to lend,
the LC Exposure has been reduced to zero and the Issuing Bank has no further
commitment to issue Letters of Credit under the Credit Agreement. Upon such
Termination, the Collateral Agent shall execute and deliver to the Pledgors, at
the Pledgors' expense, all Uniform Commercial Code termination statements and
similar documents which the Pledgors shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section 13 shall be without recourse to or warranty by the
Collateral Agent. A Subsidiary Pledgor shall automatically be released from its
obligations hereunder and the security interest in the Collateral of such
Subsidiary Pledgor shall be automatically released in the event that all the
Equity Interests of such Subsidiary Pledgor shall be sold, transferred or
otherwise disposed of to a person other than Holdings, the Borrower or an
Affiliate of Holdings in a transaction permitted under the terms of the Credit
Agreement. Any Collateral granted hereunder shall be released (automatically and
without further action on the part of the Collateral Agent) upon the sale,
transfer or other disposition of such Collateral to a transferee other than
Holdings, the Borrower or an Affiliate of Holdings, to the extent that such
sale, transfer or other disposition is permitted under the Credit Agreement.
SECTION 14. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Pledgor
shall be given to it in care of the Borrower.
SECTION 15. Further Assurances. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 16. Successors and Assigns; Binding Effect; Several
Agreement; Assignments. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of any Pledgor that are contained in this Agreement shall bind and inure
to the benefit of its successors and assigns. This Agreement shall become
effective as to any Pledgor when a counterpart hereof executed on behalf of such
Pledgor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Pledgor and the Collateral Agent and their
respective successors and assigns, and shall inure to the benefit of such
Pledgor, the Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Pledgor shall have the right
to assign its rights hereunder or any interest herein or in the Collateral (and
any such attempted assignment shall be void), except as expressly contemplated
by this Agreement or the other Loan Documents. This Agreement shall be construed
as a separate agreement with respect to each Pledgor and may be amended,
modified, supplemented, waived or released with respect to any Pledgor without
the approval of any other Pledgor and without affecting the obligations of any
other Pledgor hereunder.
SECTION 17. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by each Pledgor
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Issuing Bank, regardless of any
investigation made by the Secured Parties or on their behalf, and shall continue
in full force and effect until this Agreement shall terminate.
(b) Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties to this Agreement shall endeavor in good-faith negotiations to replace
any invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 19. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which, when taken together,
shall constitute a single contract, and shall become effective as provided in
Section 16. Delivery of an executed counterpart of a signature page to this
Agreement by telecopy shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 20. Rules of Interpretation. The rules of
interpretation specified in Sections 1.03 of the Credit Agreement shall be
applicable to this Agreement. Section headings used herein are for convenience
of reference only, are not part of this Agreement and shall not to affect the
construction of, or be taken into consideration in interpreting this Agreement.
SECTION 21. Jurisdiction; Consent to Service of Process. (a)
Each Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County or the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that, to the
extent permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against any Pledgor or its properties in the courts of any jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
court referred to in paragraph (a) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 14. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 22. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 23. Additional Pledgors. Pursuant to Section 5.12 of
the Credit Agreement, certain additional Significant Subsidiaries may be
required under the terms of the Credit Agreement from time to time to enter into
this Agreement as Subsidiary Pledgors. Upon execution and delivery by the
Collateral Agent and a Subsidiary of an instrument in the form of Annex 1, such
Subsidiary shall become a Subsidiary Pledgor hereunder with the same force and
effect as if originally named as a Subsidiary Pledgor herein. The execution and
delivery of such instrument shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Subsidiary Pledgor
as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by
Name:
Title:
THE KANSAS CITY SOUTHERN RAILWAY COMPANY,
by
Name:
Title:
CAYMEX TRANSPORTATION, INC.,
by
-----------------------------------
Name:
Title:
GATEWAY WESTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GLOBAL TERMINALING SERVICES, INC.
by
-----------------------------------
Name:
Title:
KCS TRANSPORTATION COMPANY,
by
-----------------------------------
Name:
Title:
KANSAS CITY SOUTHERN LINES, INC.,
by
-----------------------------------
Name:
Title:
SCC HOLDINGS, INC.,
by
-----------------------------------
Name:
Title:
RICE-CARDEN CORPORATION,
by
-----------------------------------
Name:
Title:
SOUTHERN INDUSTRIAL SERVICES, INC.,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
Name:
Title:
- -------------------------------------- -------------- ------------ -------
- ---------------------------- ------------------------- ------------------------
- ---------------------------- ------------------------- ----------------------
Schedule I to the
Pledge Agreement
SUBSIDIARY PLEDGORS
Caymex Transportation, Inc.
Global Terminaling Services, Inc.
KCS Transportation Company
The Kansas City Southern Railway Company
Rice-Carden Corporation
SCC Holdings, Inc.
Southern Industrial Services, Inc.
2
- - 2 -
21042580\V-1
21042580\V-1
Schedule II to the
Pledge Agreement
EQUITY INTERESTS
- ------------------------------------------------------------------------------------------------------------------
Registered Ownership Percent
Name of Entity Whose Entity Interests are Owner of Class of Number of Represented by
being Pledged (and jurisdiction of Equity Equity Cert Equity Equity Interests
organization) Interests Interests No. Interests Being Pledged
being pledged
Caymex Transportation, Inc. (Cayman KCSR Common 4 100 100%
Islands, domesticated in Delaware)
Gateway Eastern Railway Company (Illinois) GWRC Common 1 1,000 100%
Gateway Western Railway Company (Illinois) KCS-T Common A-4 21,060,413 100%
Global Terminaling Services, Inc. (d/b/a SIS Common 6 100 100%
Pabtex, Inc.) (Delaware)
The Kansas City Northern Railway Company KCSR Common 3 10 100%
(Delaware)
Kansas City Southern Lines, Inc. KCSI Common 1 1,000 100%
(Delaware)
The Kansas City Southern Railway Company KCSL Preferred KP 445 57 100%
(Missouri) KCSL Common KC 418 9,840,000 100%
The Kansas City Southern Railway Company
(Con't)
KCS Transportation Company (Delaware) KCSR Common 4 500 100%
Mexrail, Inc. (Delaware) KCSR Common 4 4,900 49% see Contr Agmt
Mid-South Microwave, Inc. (Delaware) KCSR Common 5 1,000 100%
Rice-Carden Corporation (Missouri) KCSR Common 31 1,000 100%
SCC Holdings, Inc. (Delaware) KCSR Common 1 10 100%
Registered Ownership Percent
Name of Entity Whose Entity Interests are Owner of Class of Number of Represented by
being Pledged (and jurisdiction of Equity Equity Cert Equity Equity Interests
organization) Interests Interests No. Interests Being Pledged
being pledged
Southern Capital Corporation, LLC SCC Holdings, Membership __ __ 50% Jt Ven/GATX
(Colorado) Inc. Interests
Southern Development Company (Missouri) KCSR Common 19 100 100%
Southern Industrial Services, Inc. KCSL Common 4 110 100%
(Delaware)
Trans-Serve, Inc. (Delaware) SIS Common A5 1,000 100%
Veals, Inc. (Delaware) KCSL Common 8 100 100%
Wyandotte Garage Corporation (Missouri) KCSL Common 34 100 80%
35 14,400
INDEBTEDNESS
Pledgor Issuer Principal Amount Balance 1/11/00
None.
21042580\V-1
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. dated as of [ ], to the
PLEDGE AGREEMENT dated as of January 11, 2000 (the
"Pledge Agreement"), among KANSAS CITY SOUTHERN
INDUSTRIES, INC., a Delaware corporation
("Holdings"), THE KANSAS CITY SOUTHERN RAILWAY
COMPANY, INC., a Missouri corporation (the
"Borrower"), each other Subsidiary of Holdings listed
on Schedule I thereto or becoming a party thereto as
provided in Section 24 thereof (collectively, the
"Subsidiary Pledgors"; Holdings, the Borrower and the
Subsidiary Pledgors being referred to collectively as
the "Pledgors") and THE CHASE MANHATTAN BANK,
("Chase"), as collateral agent (in such capacity, the
"Collateral Agent"), for the Secured Parties (as
defined in the Credit Agreement referred to below).
A. Reference is made to the Credit Agreement dated as of
January 11, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Holdings, the Borrower, the lenders from
time to time party thereto (the "Lenders"), and Chase, as administrative agent
(in such capacity, the "Administrative Agent"), collateral agent (in such
capacity, the "Collateral Agent") and issuing bank (in such capacity, the
"Issuing Bank").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
C. The Pledgors have entered into the Pledge Agreement in
order to induce the Lenders to make Loans and the Issuing Bank to issue Letters
of Credit. Pursuant to Section 5.12 of the Credit Agreement, certain additional
Subsidiaries may be required to enter into the Pledge Agreement as Subsidiary
Pledgors. The undersigned Subsidiary (the "New Pledgor") is executing this
Supplement in accordance with the requirements of the Credit Agreement and the
Pledge Agreement to become a Subsidiary Pledgor under the Pledge Agreement in
order to induce the Lenders to make additional Loans and the Issuing Bank to
issue additional Letters of Credit and as consideration for Loans previously
made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Pledgor agree as follows:
SECTION 1. In accordance with Section 24 of the Pledge
Agreement, the New Pledgor by its signature below becomes a Pledgor under the
Pledge Agreement with the same force and effect as if originally named therein
as a Pledgor and the New Pledgor hereby agrees (a) to all the terms and
provisions of the Pledge Agreement applicable to it as a Pledgor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Pledgor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Pledgor, as security for the payment and
performance in full of the Obligations (as defined in the Pledge Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Pledgor's right, title and
interest in and to the Collateral (as defined in the Pledge Agreement) of the
New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the
Pledge Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Pledgor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by telecopy shall be
as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants that
Schedule II attached hereto includes a true and correct listing of all the
Equity Interests and intercompany Indebtedness owned by it (and such Schedule
shall be substituted for Schedule II to the Pledge Agreement as heretofore in
effect).
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Any provision of this Supplement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality, or
unenforceability without affecting the validity, legality, and enforceability of
the remaining provisions hereof and the Pledge Agreement; and the invalidity of
a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. The Parties shall endeavor in good-faith
negotiations to replace any invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 15 of the Pledge Agreement. All
communications and notices hereunder to the New Pledgor shall be given to it in
care of the Borrower.
SECTION 9. The New Pledgor agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly
executed this Supplement to the Pledge Agreement as of the day and year first
above written.
[Name of New Pledgor],
by
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
Name:
Title:
EXHIBIT F
SECURITY AGREEMENT dated as of
January 11, 2000, among KANSAS CITY SOUTHERN
INDUSTRIES, INC., a Delaware corporation
("Holdings"), THE KANSAS CITY SOUTHERN RAILWAY
COMPANY, INC., a Missouri corporation (the
"Borrower"), each other Subsidiary of Holdings listed
on Schedule I hereto or becoming a party hereto as
provided in Section 7.15 (collectively, the
"Subsidiary Grantors"; Holdings, the Borrower and the
Subsidiary Grantors being referred to collectively as
the "Grantors") and THE CHASE MANHATTAN BANK,
("Chase"), as collateral agent (in such capacity, the
"Collateral Agent"), for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in the
Credit Agreement. The obligations of the Lenders to make such Loans and of the
Issuing Bank to issue such Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Grantors of an agreement in the form
hereof to secure the Obligations.
Accordingly, the Grantors and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. (a) Unless the context
otherwise requires, all capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Credit Agreement and all references to
the Uniform Commercial Code shall mean the Uniform Commercial Code in effect in
the State of New York as of the date hereof.
(b) As used herein, the following terms shall have the following
meanings:
"Account Debtor" shall mean any person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"Account Rights" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including payments due from Affiliates of the Grantors.
24
21042580\V-1
"Chattel Paper" shall mean (a) a writing or writings which evidence
both a monetary obligation and a security interest in or a lease of specific
Equipment and (b) all other property now or hereafter constituting "chattel
paper" under the Uniform Commercial Code as in effect in the State of New York
or its equivalent in other jurisdictions, in each case that are now or hereafter
owned by Grantor.
"Collateral" shall mean all (a) Account Rights, (b) Documents, (c)
Inventory, (d) Chattel Paper, (e) Contract Rights, (f) Equipment, (g) General
Intangibles, (h) cash and cash accounts, (i) Intellectual Property, (j)
Investment Property and (k) Proceeds; provided that "Collateral" shall not
include any Excluded Asset.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried for a Commodity Customer.
"Commodity Contract" shall mean a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" shall mean a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Contract Rights" shall mean the rights of any Grantor to bill and
receive payment for completed work under any and all contracts, agreements or
purchase orders.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office or
any similar offices in any other country.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Documents" shall mean all instruments, certificates representing
shares of capital securities, files, records, ledger sheets and documents
covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such person is the
Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings and all
tangible personal property similar to any of the foregoing, including Rolling
Stock, tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, that are now or hereafter
owned by any Grantor. The term Equipment shall include Fixtures.
"Excluded Asset" means (i) any asset listed on Schedule II hereto and
(ii) any other asset subject to a Lien permitted pursuant to Section 6.02(viii)
of the Credit Agreement to the extent the agreement creating such Lien or the
Indebtedness secured by such Lien prohibits the granting of a second Lien on
such asset; provided that upon the termination of all prior Liens on any of the
foregoing assets, such asset shall cease to be an excluded asset.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in property or
an enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all choices in action and causes of
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than Account Rights) now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims and
contract rights (including (a) rights under leases, whether entered into as
lessor or lessee (but excluding real estate leases), (b) rights under any
Hedging Agreement, (c) any intercompany payment obligations not evidenced by any
instrument, (d) any written agreement, now or hereafter in effect, granting any
right to any third party under any Copyright now or hereafter owned by any
Grantor or which such Grantor otherwise has the right to license, and all rights
of such Grantor under any such agreement, (e) any written agreement, now or
hereafter in effect, granting to any third party any right to make, use or sell
any invention on which a Patent, now or hereafter owned by any Grantor or which
any Grantor otherwise has the right to license, is in existence, and all rights
of any Grantor under any such agreement, (f) any written agreement, now or
hereafter in effect, granting any right to any third party to use any Trademark
now or hereafter owned by any Grantor or which such Grantor otherwise has the
right to license, and all rights of such Grantor under any such agreement, and
(g) other agreements, goodwill, registrations, franchises, tax refund claims and
any letter of credit, guarantee, claim, security interest or other security held
by or granted to any Grantor to secure payment by an Account Debtor of any of
the Account Rights).
"Intellectual Property" shall mean all intangible, intellectual and
similar property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any
of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated
or uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter
acquired by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party, other
than those licenses or license agreements which by their terms prohibit (or as
to which applicable law prohibits) assignment or a grant of a security interest
by such Grantor.
"Obligations" shall mean (a) the due and punctual payment of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Loans, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made under the Credit
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
Holdings, the Borrower or any other Subsidiary to the Secured Parties under the
Credit Agreement or any other Loan Document, (b) the due and punctual payment
and performance of all covenants, agreements, obligations, and liabilities of
the Loan Parties, monetary or otherwise, under or pursuant to the Credit
Agreement and the other Loan Documents and (c) the due and punctual payment of
all obligations of the Borrower under each Hedging Agreement entered into (i)
prior to the date hereof with any counterparty that is a Lender (or an Affiliate
thereof) on the date hereof or (ii) on or after the date hereof with any
counterparty that is a Lender, in either case to provide protection against
interest rate fluctuations (or an Affiliate thereof) at the time such Hedging
Agreement is entered into in either case to provide protection against interest
rate fluctuations.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any Grantor any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any third party, is in existence, and
all rights of any Grantor under any such agreement.
"Patents" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof and all applications for
letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Exhibit C to the Credit Agreement or any other form approved by the
Collateral Agent, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer and the chief
legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any Collateral and any payment received from any insurer or other Person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include, (a) any claim of any Grantor against any third
party for (and the right to sue and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor or
licensed to any Grantor under a Patent License, (ii) past, present or future
infringement or dilution of any Trademark now or hereafter owned by any Grantor
or licensed under a Trademark License or injury to the goodwill associated with
or symbolized by any Trademark now or hereafter owned by any Grantor, (iii)
past, present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
to a Grantor under a Copyright License and (b) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Rolling Stock" shall mean any gondola, boxcar, tanker, locomotive or
railcar of any type.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code (other than as
expressly excluded by Section 8-103(c), (e), and (f) of such Article).
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Securities Intermediary" shall mean (a) a clearing corporation or (b)
a person, including a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Trademark License" shall mean any written agreement, now or hereafter
in effect, granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office, any
State of the United States or any similar offices in any other country or any
political subdivision thereof, and all extensions or renewals thereof, (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.
SECTION 1.02. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations and any extensions,
renewals, modifications or refinancings of the Obligations, each Grantor hereby
mortgages and pledges to the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregoing, the Collateral Agent is hereby authorized to file one or more
financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as Secured Party.
SECTION 2.02. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other person other
than any consent or approval which has been obtained.
SECTION 3.02. Filings. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in Schedule 6 to the Perfection Certificate,
which are all the filings, recordings and registrations that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Collateral in which
the Security Interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or, the change of any Grantor's name, location,
identity or corporate structure, with respect to the filing of financing
statements or amendments to filed financing statements.
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations and (b) a perfected
security interest in all Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable law in such jurisdictions. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Liens expressly
permitted to be prior to the Security Interest pursuant to Section 6.02 of the
Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement. No Grantor has filed or
consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
SECTION 3.05 Intellectual PropertySECTION 3.05 Intellectual Property.
(a) On the date hereof, all material Intellectual Property is valid, subsisting,
unexpired and enforceable, has not been abandoned and does not infringe the
intellectual property rights of any other person.
(b) None of the Intellectual Property is the subject of any licensing
or franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(c) No holding decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(d) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
(e) Fully executed security agreements in the form hereof and
containing a description of all Collateral consisting of Intellectual Property
shall have been received and recorded within three months after the execution of
this Agreement with respect to United States Patents and United States
registered Trademarks (and Trademarks for which United States registration
applications are pending) and within one month after the execution of this
Agreement with respect to United States registered Copyrights by the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the
regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction, to protect the validity of and
to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business. (a) Each Grantor agrees promptly to notify the Collateral Agent in
writing of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or corporate structure or (iv) in its Federal Taxpayer
Identification Number. Each Grantor agrees within 30 days of the occurrence of
any change referred to in the preceding sentence to make all filings under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Collateral. Each
Grantor agrees promptly to notify the Collateral Agent if any material portion
of the Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Collateral, and, at such time or times as the Collateral Agent
may reasonably request, promptly to prepare and deliver to the Collateral Agent
a duly certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Collateral.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement and which
has a material adverse effect on the value of the Collateral.
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable to
any Grantor under or in connection with any of the Collateral shall be or become
evidenced by any promissory note or other instrument, such note or instrument
shall be immediately pledged and delivered to the Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by adding additional schedules hereto to specifically
identify any asset or item that may constitute Collateral; provided, however,
that any Grantor shall have the right, exercisable within 10 days after it has
been notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its best efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.04. Inspection and Verification. The Collateral Agent and
such persons as the Collateral Agent may reasonably designate shall have the
right, upon reasonable notice and at reasonable times at the Grantors' own cost
and expense, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors' affairs with the officers of the
Grantors and their independent accountants and to verify under reasonable
procedures, in accordance with Section 5.09 of the Credit Agreement, the
validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Collateral, including, in the case of Accounts or
Collateral in the possession of any third person, by contacting Account Debtors
or the third person possessing such Collateral for the purpose of making such a
verification. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.
SECTION 4.05. Taxes; Encumbrances. At its option and after notice
pursuant to Section 7.01, the Collateral Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted pursuant to
Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Collateral to the extent any Grantor fails to do so as
required by the Credit Agreement or this Agreement, and each Grantor jointly and
severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.06 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest.
SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor
shall remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by Section 6.02 of the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral and each
Grantor shall remain at all times in possession of the Collateral owned by it,
except that (a) Inventory may be sold in the ordinary course of business and (b)
unless and until the Collateral Agent shall notify the Grantors that an Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory with an aggregate fair market value in excess of $100,000 to be in the
possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have agreed in writing to hold the
Inventory subject to the Security Interest and the instructions of the
Collateral Agent and to waive and release any Lien held by it with respect to
such Inventory, whether arising by operation of law or otherwise..
SECTION 4.09. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Account Rights, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
SECTION 4.10. Insurance. (a) The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Inventory and Equipment in accordance with Section 5.07 of the Credit
Agreement.
(b) Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.10, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Obligations secured
hereby.
(c) Each Grantor agrees to cause all insurance policies related to the
insurance described in clause (a) of this Section 4.10 to be endorsed or
otherwise amended to include a lender's loss payable endorsement, in form and
substance reasonably satisfactory to the Collateral Agent.
SECTION 4.11. Legend. Each Grantor shall legend, in form and manner
satisfactory to the Collateral Agent, its books, records and documents
evidencing or pertaining to Account Rights with an appropriate reference to the
fact that such Account Rights have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.
SECTION 4.12. Intellectual Property. (a) Each Grantor agrees that it
will not, nor will it permit any of its licensees to, do any act, or omit to do
any act, whereby any Patent which is material to the conduct of such Grantor's
business may become invalidated or dedicated to the public, and agrees that it
shall continue to mark any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent, and, upon request of the Collateral Agent, executes and
delivers any and all agreements, instruments, documents and papers as the
Collateral Agent may request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
ARTICLE V
Power of Attorney
SECTION 5.01. Power of Attorney. Each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent and attorney-in-fact, and in such capacity the Collateral Agent shall have
the right, with power of substitution for each Grantor and in each Grantor's
name or otherwise, for the use and benefit of the Collateral Agent and the
Secured Parties, upon the occurrence and during the continuance of an Event of
Default (a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading
relating to any of the Collateral; (d) to send verifications of Account Rights
to any Account Debtor; (e) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors
to make payment directly to the Collateral Agent; and (h) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent or any Secured Party to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any other
Loan Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained) and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral, exercise any Grantor's right to bill and receive payment for
completed work, and, generally, to exercise any and all rights afforded to a
Secured Party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing any Collateral which constitutes a "security" under
applicable securities law for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such sale
the Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which such
Grantor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix and state in the notice (if any)
of such sale. At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral Agent shall
apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent or the Collateral Agent (in its capacity as
such hereunder or under any other Loan Document) in connection with
such collection or sale or otherwise in connection with this Agreement
or any of the Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
may be exercised, at the option of the Collateral Agent, upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Grantor shall be given to Holdings.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect until this Agreement shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter this Agreement shall be binding upon such Grantor and the
Collateral Agent and their respective successors and assigns and shall inure to
the benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement (including the customary fees and charges
of the Collateral Agent for any audits conducted by it or on its behalf with
respect to the Account Rights or Inventory), (ii) the custody or preservation
of, or the sale of, collection from or other realization upon any of the
Collateral, (iii) the exercise, enforcement or protection of any of the rights
of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform
or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of counsel,
incurred by or asserted against any of them arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating hereto
or to the Collateral, whether or not any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 7.06 shall be payable on written demand therefor and shall bear
interest at the rate specified in clause (c)(ii) of Section 2.13 of the Credit
Agreement.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Issuing Bank, the Administrative Agent and the
Lenders under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.11 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 7.04),
and shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Grantor or its properties in the courts of
any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 7.14. Termination. This Agreement and the Security Interest
shall terminate when all the Obligations (other than wholly contingent
indemnification obligations) have been indefeasibly paid in full, the Lenders
have no further commitment to lend, the LC Exposure has been reduced to zero and
the Issuing Bank has no further commitment to issue Letters of Credit under the
Credit Agreement, at which time the Collateral Agent shall execute and deliver
to the Grantors, at the Grantors' expense, all Uniform Commercial Code
termination statements, terminations and reassignments for mortgages and
assignments of copyrights, patents and trademarks, and similar documents which
the Grantors shall reasonably request to evidence such termination. Any
execution and delivery of termination statements or documents pursuant to this
Section 7.14 shall be without recourse to or warranty by the Collateral Agent.
SECTION 7.15. Additional Grantors. Pursuant to Section 5.12 of the
Credit Agreement, each Significant Subsidiary (other than any Foreign
Subsidiary) that was not in existence or was not a Significant Subsidiary on the
date of the Credit Agreement is required to enter into this Agreement as a
Grantor upon becoming such a Subsidiary. Upon execution and delivery by the
Collateral Agent and such a Subsidiary of a Supplement in the form of Annex 1
hereto, such Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor herein. The execution and delivery of
any such instrument shall not require the consent of any Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Agreement.
SECTION 7.16. Releases and Termination. This Agreement and the security
interest granted hereby shall terminate when all the Obligations have been
indefeasibly paid in full, the Lenders have no further commitment to lend, the
LC Exposure has been reduced to zero and the Issuing Bank has no further
commitment to issue Letters of Credit under the Credit Agreement. Upon such
Termination, the Collateral Agent shall execute and deliver to the Grantors, at
the Grantors' expense, all Uniform Commercial Code termination statements and
similar documents which the Grantors shall reasonably request to evidence such
termination. Any execution and delivery of termination statements or documents
pursuant to this Section 7.15 shall be without recourse to or warranty by the
Collateral Agent. A Subsidiary Grantor shall automatically be released from its
obligations hereunder and the security interest in the Collateral of such
Subsidiary Grantor shall be automatically released in the event that all the
Equity Interests of such Subsidiary Grantor shall be sold, transferred or
otherwise disposed of to a person other than Holdings, the Borrower or an
Affiliate of Holdings in a transaction permitted under the terms of the Credit
Agreement. Any Collateral granted hereunder shall be released (automatically and
without further action on the part of the Collateral Agent) upon the sale,
transfer or other disposition of such Collateral to a transferee other than
Holdings, the Borrower or an Affiliate of Holdings, to the extent that such
sale, transfer or other disposition is permitted under the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by
--------------------------
Name:
Title:
THE KANSAS CITY SOUTHERN RAILWAY COMPANY,
by
--------------------------
Name:
Title:
CAYMEX TRANSPORTATION, INC.,
by
-----------------------------------
Name:
Title:
GATEWAY EASTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GATEWAY WESTERN RAILWAY COMPANY,
by
-----------------------------------
Name:
Title:
GLOBAL TERMINALING SERVICES, INC.
by
-----------------------------------
Name:
Title:
KCS TRANSPORTATION COMPANY,
by
-----------------------------------
Name:
Title:
KANSAS CITY SOUTHERN LINES, INC.,
by
-----------------------------------
Name:
Title:
SCC HOLDINGS, INC.,
by
-----------------------------------
Name:
Title:
MID-SOUTH MICROWAVE, INC.,
by
-----------------------------------
Name:
Title:
RICE-CARDEN CORPORATION,
by
-----------------------------------
Name:
Title:
SOUTHERN DEVELOPMENT COMPANY,
by
-----------------------------------
Name:
Title:
SOUTHERN INDUSTRIAL SERVICES, INC.,
by
-----------------------------------
Name:
Title:
TRANS-SERVE, INC.,
by
-----------------------------------
Name:
Title:
VEALS, INC.,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
------------------------
Name:
Title:
21042580\V-1
Schedule 1 to the
Security Agreement
SUBSIDIARY GRANTORS
Caymex Transportation, Inc.
Gateway Eastern Railway Company
Gateway Western Railway Company
Global Terminaling Services, Inc.
KCS Transportation Company
Kansas City Southern Lines, Inc.
Mid-South Microwave, Inc.
Rice-Carden Corporation
SCC Holdings, Inc.
Southern Development Company
Southern Industrial Services, Inc.
Trans-Serve, Inc.
Veals, Inc.
Schedule II to the
Security Agreement
None.
Annex 1 to the
Security Agreement
SUPPLEMENT NO. dated as of [ ] to the
Security Agreement dated as of January 11, 2000,
among THE KANSAS CITY SOUTHERN INDUSTRIES, INC., a
Delaware corporation ("Holdings"), KANSAS CITY
SOUTHERN RAILWAY COMPANY, INC., a Delaware
corporation (the "Borrower"), each other Subsidiary
of Holdings listed on Schedule I thereto or becoming
a party thereto as provided in Section 7.15 thereof
(collectively, the "Subsidiary Grantors"; Holdings,
the Borrower and the Subsidiary Grantors being
referred to collectively as the "Grantors") and THE
CHASE MANHATTAN BANK, ("Chase"), as collateral agent
(in such capacity, the "Collateral Agent"), for the
Secured Parties (as defined in the Credit Agreement
referred to below).
A. Reference is made to (a) the Credit Agreement dated as of January
11, 2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Lenders"), and Chase, as administrative agent (in such
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.15 of the Security Agreement provides that additional
Subsidiaries may become Grantors under the Security Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary (the "New Grantor") is executing this Supplement in accordance with
the requirements of the Credit Agreement to become a Grantor under the Security
Agreement in order to induce the Lenders to make additional Loans and the
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment and
performance in full of the Obligations (as defined in the Credit Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Grantor's right, title and
interest in and to the Collateral (as defined in the Security Agreement) of the
New Grantor. Each reference to a "Grantor" in the Security Agreement shall be
deemed to include the New Grantor. The Security Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
3
[NYCorp;971826.3:4443C:01/27/2000--2:42p]
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it in
care of the Borrower.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[NYCorp;971826.3:4443C:01/27/2000--2:42p]
[Name of New Grantor],
by
Name:
Title:
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
Name:
Title:
- - 3 -
1/ Consents to be included to the extent required by Section 9.04(b) of the
Credit Agreement.