Exhibit 4.2
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
No. $_________
7 1/2% Senior Note due 2009
CUSIP No.____
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation, promises
to pay to Cede & Co., or its registered assigns, the principal sum of Dollars
listed on the Schedule of Increases or Decreases in Global Security attached
hereto on June 15, 2009.
Interest Payment Dates: June 15 and December 15.
Record Dates: June I and December 1.
Additional provisions of this Security are set forth on the other side of
this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
The Kansas City Southern Railway Company
By:
_________________________________
Name:
Title:
By:
_________________________________
Name:
Title:
Exh. B-2
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U. S. Bank National Association,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
By:
_____________________________
Authorized Signatory
*/ If the Security is to be issued in global form, add the Global
Securities Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO
GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
Exh. B-3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
7 1/2% Senior Note due 2009
1. Interest
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
shall pay interest semiannually on June 15 and December 15 of each year.
Interest on the Securities shall accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from June 12, 2002 until the principal hereof is due.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders at the close of business on
the June 1 and December 1 next preceding the interest payment date even if the
Securities are cancelled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company or any successor depositary.
The Company will make all payments in respect of a certificated Security
(including principal, premium, if any, and interest) at the office of the Paying
Agent, except that, at the option of the Company, payment of interest may be
made by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, U.S. Bank National Association, a New York banking corporation
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent or Registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or Registrar.
Exh. B-4
4. Indenture
The Company issued the Securities under an Indenture dated as of June 12,
2002 (the "Indenture") among the Company, the Note Guarantors and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and Holders (as defined in the Indenture) are referred to the
Indenture and the TIA for a statement of such terms and provisions.
The Securities are senior unsecured obligations of the Company unlimited in
aggregate principal amount at any one time outstanding, subject to the
conditions and in compliance with the covenants set forth in the Indenture. This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Original Securities, the Additional Securities and any
Exchange Securities and Private Exchange Securities issued in exchange for
Initial Securities pursuant to the Indenture. The Original Securities, the
Additional Securities, Exchange Securities and the Private Exchange Securities
are treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of the Parent, the Company and the
Parent's Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make Asset Sales. The Indenture also imposes limitations on the ability of the
Parent, the Company and each Note Guarantor to consolidate or merge with or into
any other Person or convey, transfer or lease all or substantially all of its
property.
To guarantee the due and punctual payment of the principal and interest, if
any, on the Securities and all other amounts payable by the Company under the
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Note Guarantors have, jointly and severally,
unconditionally guaranteed the Guaranteed Obligations on a senior basis pursuant
to the terms of the Indenture.
5. Optional Redemption
Except as set forth in this paragraph, the Company may not redeem the
Securities. Prior to June 15, 2005, the Company may, on one or more occasions,
redeem up to a maximum of 35% of the original aggregate principal amount of the
Securities (calculated giving effect to any issuance of Additional Securities)
with the Net Cash Proceeds of one or more Equity Offerings (i) by the Company or
(ii) by Parent to the extent the Net Cash Proceeds thereof are contributed to
the Company or used to purchase Capital Stock (other than Disqualified Stock) of
the Company from the Company, at a redemption price equal to 107.5% of the
principal amount thereof, plus accrued and unpaid interest and liquidated
damages thereon, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that after giving effect to
Exh. B-5
any such redemption, at least 65% of the original aggregate principal amount of
the Securities remains outstanding. Any such redemption shall be made within 60
days of such Equity Offering and must be made in accordance with the procedures
set forth in the Indenture.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 maybe redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of, and
accrued and unpaid interest and liquidated damages, if any, on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of Control and
Asset Dispositions
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest and liquidated damages, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on or
prior to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
In accordance with Section 4.06 of the Indenture, the Company will be
required to offer to purchase Securities upon the occurrence of certain events.
9. Denominations Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to the
mailing of a notice of redemption of Securities or 15 days before an interest
payment date.
Exh. B-6
10. Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered Holder of this
Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and the Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and the Paying Agent
shall have no further liability with respect to such money.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of and interest on, the Securities to redemption or maturity, as
the case may be.
13. Amendments, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended without prior notice to any Holder but with the
written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities and (ii) any default may be waived with the
written consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company, the Note Guarantors
and the Trustee may amend the Indenture or the Securities (i) to cure any
ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5 of
the Indenture; (iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities; (iv) to add Note Guarantees with respect to
the Securities; (v) to secure the Securities; (vi) to add additional covenants
or to surrender rights and powers conferred on the Company; (vii) to comply with
the requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA; (viii) to make any change that does not adversely
affect the rights of any Holder; or (ix) to provide for the issuance of the
Exchange Securities, Private Exchange Securities or Additional Securities.
14. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company) and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities may declare the principal of, and accrued but unpaid
interest on, all the Securities to be due and payable. If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company occurs, the principal of, and interest on, all the Securities shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders. Under certain circumstances, the Holders of
a majority in principal
Exh. B-7
amount of the outstanding Securities may rescind any such acceleration with
respect to the Securities and the consequences of any such acceleration.
If an Event of Default occurs and is continuing, the Trustee shall be under
no obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee indemnity or security satisfactory to it in its reasonable
discretion against any loss, liability or expense and certain other conditions
are complied with. Except to enforce the right to receive payment of principal,
premium (if any) or interest when due, no Holder may pursue any remedy with
respect to the Indenture or the Securities unless (i) such Holder has previously
given the Trustee notice that an Event of Default is continuing, (ii) Holders of
at least 25% in principal amount of the outstanding Securities have requested
the Trustee in writing to pursue the remedy, (iii) such Holders have offered the
Trustee security or indemnity satisfactory to it in its reasonable discretion
against any loss, liability or expense, (iv) the Trustee has not complied with
such request within 60 days after the receipt of the request and the offer of
security or indemnity and (v) the Holders of a majority in principal amount of
the outstanding Securities have not given the Trustee a direction inconsistent
with such request within such 60-day period. Subject to certain restrictions,
the Holders of a majority in principal amount of the outstanding Securities are
given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. The Trustee, however, may refuse to follow any
direction that conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other Holder or that would
involve the Trustee in personal liability. Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Parent, the Company or its Affiliates and may otherwise deal with
the Parent, the Company or its Affiliates with the same rights it would have if
it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Parent, the
Company or any Note Guarantor shall not have any liability for any obligations
of the Company under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By accepting a
Security, each Holder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
Exh. B-8
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with rights of survivorship and not as tenants in common),
CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors Act).
19. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
The Company has caused CUSIP numbers to be printed on the Securities and
has directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company will furnish to any Holder of Securities, upon written request
and without charge to the Holder, a copy of the Indenture which has in it the
text of this Security.
Exh. B-9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Date:___________________ Your Signature:______________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
Exh. B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Disposition [ ] Change of Control [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
($1,000 or an integral multiple thereof):
$_______________________
Date:____________________ Your Signature:______________________________________
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee:
____________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
Exh. B-11
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ]. The following
increases or decreases in this Global Security have been made:
Amount of decrease Amount of increase Principal amount of Signature of
Date of Exchange in Principal Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase Securities Custodian
Exh. B-12