Exhbit 4.3
REGISTRATION RIGHTS AGREEMENT
Dated June 5, 2002
between
THE KANSAS CITY SOUTHERN RAILWAY COMPANY
and
THE GUARANTORS NAMED HEREIN
and
MORGAN STANLEY & CO. INCORPORATED
J.P. MORGAN SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
SCOTIA CAPITAL (USA) INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into June 5, 2002, by and among THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a
Missouri corporation (the "Company"), KANSAS CITY SOUTHERN ("Parent") and the
companies named in Schedule A hereto as guarantors (collectively, and together
with Parent, the "Guarantors"), and MORGAN STANLEY & CO. INCORPORATED, J.P.
MORGAN SECURITIES INC., DEUTSCHE BANK SECURITIES INC., BANC ONE CAPITAL MARKETS,
INC. and SCOTIA CAPTIAL (USA) INC. (the "Placement Agents").
This Agreement is made pursuant to the Placement Agreement, dated June 5,
2002 by and among the Company, the Guarantors and the Placement Agents (the
"Placement Agreement"), which provides for the sale by the Company to the
Placement Agents of an aggregate of $200,000,000 principal amount of the
Company's 7.5 % Senior Notes Due 2009 (the "Securities") to be jointly and
severally guaranteed on an unsecured senior basis by the Guarantors. In order to
induce the Placement Agents to enter into the Placement Agreement, the Company
and the Guarantors have agreed to provide to the Placement Agents and their
direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Closing Date" shall mean the Closing Date as defined in the Placement
Agreement.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" shall mean securities issued by the Company and the
Guarantors under the Indenture containing terms identical to the Securities
(except that (i) interest thereon shall accrue from the last date on which
interest was paid on the Securities or, if no such interest has been paid, from
June 12, 2002 and (ii) the Exchange Securities will not contain restrictions on
transfer) and to be offered to Holders of Securities in exchange for Securities
pursuant to the Exchange Offer.
"Guarantors" shall have the meaning set forth in the preamble and shall
also include any Guarantor's successor.
"Holder" shall mean the Placement Agents, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Securities dated as of
June 12, 2002 between the Company, the Guarantors and U.S. Bank National
Association, as trustee, and as the same may be amended from time to time in
accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided that whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
any of its affiliates (as such term is defined in Rule 405 under the 1933 Act)
(other than the Placement Agents or subsequent Holders of Registrable Securities
if such subsequent Holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Placement Agents" shall have the meaning set forth in the preamble.
"Placement Agreement" shall have the meaning set forth in the preamble.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided, however, that
the Securities shall cease to be Registrable Securities (i) when a Registration
Statement with respect to such Securities shall have been declared effective
under the 1933 Act and such Securities shall have been disposed of pursuant to
such Registration Statement, (ii) when such Securities have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the 1933 Act or (iii) when such Securities shall have ceased to
be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including, without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities),
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the performance of
and compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and
its counsel, (vii) the fees and disbursements of counsel for the Company and the
Guarantors and, in the case of a Shelf Registration Statement, the fees and
disbursements of one counsel for the Holders (which counsel shall be selected by
the Majority Holders and which counsel may also be counsel for the Placement
Agents) and (viii) the fees and disbursements of the independent public
accountants of the Company and the Guarantors, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding fees and expenses of counsel to the
underwriters (other than fees and expenses set forth in clause (ii) above) or
the Holders and underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Guarantors pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders whose Registrable Securities are
covered by such Shelf Registration Statement) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
"Underwriter" shall have the meaning set forth in Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
2. REGISTRATION UNDER THE 1933 ACT.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company and the Guarantors
shall use their reasonable best efforts to cause to be filed an Exchange
Offer Registration Statement covering the offer by the Company and the
Guarantors to the Holders to exchange all of the Registrable Securities for
Exchange Securities and to have such Registration Statement remain
effective until the closing of the Exchange Offer. The Company and the
Guarantors shall commence the Exchange Offer promptly after the Exchange
Offer Registration Statement has been declared effective by the SEC and use
their reasonable best efforts to have the Exchange Offer consummated not
later than 60 days after such effective date. The Company and the
Guarantors shall commence the Exchange Offer by mailing the related
exchange offer Prospectus and accompanying documents to each Holder
stating, in addition to such other disclosures as are required by
applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 20 business days from the date such notice is
mailed) (the "Exchange Dates");
(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Security, together with the enclosed letters of
transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the notice
prior to the close of business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last Exchange Date, by sending
to the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for
exchange and a statement that such Holder is withdrawing his election
to have such Securities exchanged.
As soon as practicable after the last Exchange Date, the Company and
the Guarantors shall:
(i) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so
accepted for exchange by the Company and the Guarantors and issue, and
cause the Trustee to promptly authenticate and mail to each Holder, an
Exchange Security equal in principal amount to the principal amount of
the Registrable Securities surrendered by such Holder.
The Company and the Guarantors shall use their best efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does
not violate applicable law or any applicable interpretation of the Staff of
the SEC. The Company and the Guarantors shall inform the Placement Agents
of the names and addresses of the Holders to whom the Exchange Offer is
made, and the Placement Agents shall have the night, subject to applicable
law, to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company and the Guarantors determine
that the Exchange Offer Registration provided for in Section 2(a) above is
not available or may not be consummated as soon as practicable after the
last Exchange Date because it would violate applicable law or the
applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer
is not for any other reason consummated by 210 days after the Closing Date
or (iii) the Exchange Offer has been completed and in the opinion of
counsel for the Placement Agents a Registration Statement must be filed and
a Prospectus must be delivered by the Placement Agents in connection with
any offering or sale of Registrable Securities, the Company and the
Guarantors shall use their reasonable best efforts to cause to be filed as
soon as practicable after such determination, date or notice of such
opinion of counsel is given to the Company and the Guarantors, as the case
may be, a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities and to have such Shelf
Registration Statement declared effective by the SEC. In the event the
Company and the Guarantors are required to file a Shelf Registration
Statement solely as a result of the matters referred to in clause (iii) of
the preceding sentence, the Company and the Guarantors shall use their
reasonable best efforts to file and have declared effective by the SEC both
an Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities and a Shelf Registration Statement
(which may be a combined Registration Statement with the Exchange Offer
Registration Statement) with respect to offers and sales of Registrable
Securities held by the Initial Purchasers after completion of the Exchange
Offer. The Company and the Guarantors agree to use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective
until the expiration of the period referred to in Rule 144(k) with respect
to the Registrable Securities or such shorter period that will terminate
when all of the Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement. The
Company and the Guarantors further agree to supplement or amend the Shelf
Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company and
the Guarantors for such Shelf Registration Statement or by the 1933 Act or
by any other rules and regulations thereunder for shelf registration or if
reasonably requested by a Holder with respect to information relating to
such Holder, and to use their reasonable best efforts to cause any such
amendment to become effective and such Shelf Registration Statement to
become usable as soon as thereafter practicable. The Company and the
Guarantors agree to furnish to the Holders of Registrable Securities copies
of any such supplement or amendment promptly after its being used or filed
with the SEC.
(c) The Company and the Guarantors shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) and Section
2(b). Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that, if, after it has been
declared effective, the offering of Registrable Securities pursuant to a
Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed
not to have become effective during the period of such interference until
the offering of Registrable Securities pursuant to such Registration
Statement may legally resume. In the event the Exchange Offer is not
consummated and the Shelf Registration Statement is not declared effective
on or prior to 210 days after the Closing Date, the interest rate on the
Securities will be increased on each day thereafter by 0.5% per annum until
the Exchange Offer is consummated or the Shelf Registration Statement is
declared effective by the SEC. Upon the consummation of the Exchange Offer
or the effectiveness of the Shelf Registration Statement, the interest rate
borne by the Securities from the date of such consummation or
effectiveness, as the case may be, will be reduced to the original interest
rate.
(e) Without limiting the remedies available to the Placement Agents
and the Holders, the Company and the Guarantors acknowledge that any
failure by the Company and the Guarantors to comply with its obligations
under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Placement Agents or the Holders for which there
is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such
failure, the Placement Agents or any Holder may obtain such relief as may
be required to specifically enforce the Company's and the Guarantors'
obligations under Section 2(a) and Section 2(b) hereof.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company and the Guarantors with
respect to the Registration Statements pursuant to Section 2(a) and Section 2(b)
hereof, the Company and the Guarantors shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and the Guarantors and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use its
best efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary (i) to keep
such Registration Statement effective for the applicable period and cause
each Prospectus to be supplemented by any required prospectus supplement
and, as so supplemented, to be filed pursuant to Rule 424 under the 1933
Act and (ii) to keep each Prospectus current during the period described
under Section 4(3) and Rule 174 under the 1933 Act that is applicable to
transactions by brokers or dealers with respect to the Registrable
Securities or Exchange Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Placement Agents, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or Underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and the Company and the
Guarantors consent to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the selling
Holders of Registrable Securities and any such Underwriters in connection
with the offering and sale of the Registrable Securities covered by and in
the manner described in such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(d) use their reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Securities covered
by a Registration Statement shall reasonably request in writing by the time
the applicable Registration Statement is declared effective by the SEC, to
cooperate with such Holders in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company and the Guarantors shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (ii) file any general consent to service of process or
(iii) subject itself to taxation in any such jurisdiction if it is not so
subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the
Placement Agents promptly and, if requested by any such Holder or counsel,
confirm such advice in writing (i) when a Registration Statement has become
effective and when any post-effective amendment thereto has been filed and
becomes effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company and the Guarantors contained
in any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and correct in
all material respects or if the Company and the Guarantors receive any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, (v) of the happening of any event during
the period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes
in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the
Company and the Guarantors that a post-effective amendment to a
Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide immediate notice to each Holder of the
withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and enable such Registrable Securities
to be in such denominations (consistent with the provisions of the
Indenture) and registered in such names as the selling Holders may
reasonably request at least one business day prior to the closing of any
sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use their best efforts to
prepare and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (the Company and the Guarantors agree to notify the
Holders to suspend use of the Prospectus as promptly as practicable after
the occurrence of such an event, and the Holders hereby agree to suspend
use of the Prospectus until the Company and the Guarantors have amended or
supplemented the Prospectus to correct such misstatement or omission);
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Placement Agents and their counsel (and, in the case of a
Shelf Registration Statement, the Holders and their counsel) and make such
of the representatives of the Company and the Guarantors as shall be
reasonably requested by the Placement Agents or their counsel (and, in the
case of a Shelf Registration Statement, the Holders or their counsel)
available for discussion of such document, and shall not at any time file
or make any amendment to the Registration Statement, any Prospectus or any
amendment of or supplement to a Registration Statement or a Prospectus or
any document which is to be incorporated by reference into a Registration
Statement or a Prospectus, of which the Placement Agents and their counsel
(and, in the case of a Shelf Registration Statement, the Holders and their
counsel) shall not have previously been advised and furnished a copy or to
which the Placement Agents or their counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) shall object;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts
to cause the Trustee to execute, all documents as may be required to effect
such changes and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for inspection
by a representative of the Holders of the Registrable Securities, any
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all financial and
other records, pertinent documents and properties of the Company and the
Guarantors, and cause the respective officers, directors and employees of
the Company and the Guarantors to supply all information reasonably
requested by any such representative, Underwriter, attorney or accountant
in connection with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, use its reasonable best
efforts to cause all Registrable Securities to be listed on any securities
exchange or any automated quotation system on which similar securities
issued by the Company are then listed if requested by the Majority Holders,
to the extent such Registrable Securities satisfy applicable listing
requirements;
(o) use its reasonable best efforts to cause the Exchange Securities
or Registrable Securities, as the case may be, to be rated by two
nationally recognized statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the 1933 Act);
(p) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as the Company and the Guarantors
have received notification of the matters to be incorporated in such
filing; and
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith
(including those requested by the Holders of a majority of the Registrable
Securities, being sold) in order to expedite or facilitate the disposition
of such Registrable Securities including, but not limited to, an
Underwritten Offering and in such connection (i) to the extent possible,
make such representations and warranties to the Holders and any
Underwriters of such Registrable Securities with respect to the business of
the Company and the Guarantors and their subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested, (ii) obtain opinions
of counsel to the Company and the Guarantors (which counsel and opinions,
in form, scope and substance, shall be reasonably satisfactory to the
Holders and such Underwriters and their respective counsel) addressed to
each selling Holder and Underwriter of Registrable Securities, covering the
matters customarily covered in opinions requested in underwritten
offerings, (iii) obtain "cold comfort" letters from the independent
certified public accountants of the Company and the Guarantors (and, if
necessary, any other certified public accountant of any subsidiary of the
Company or the Guarantors, or of any business acquired by the Company or
the Guarantors for which financial statements and financial data are or are
required to be included in the Registration Statement) addressed to each
selling Holder and Underwriter of Registrable Securities, such letters to
be in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with underwritten offerings, and
(iv) deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in principal amount of the Registrable
Securities being sold or the Underwriters, and which are customarily
delivered in underwritten offerings, to evidence the continued validity of
the representations and warranties of the Company and the Guarantors made
pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company and the
Guarantors may require each Holder of Registrable Securities to furnish to the
Company and the Guarantors such information regarding the Holder and the
proposed distribution by such Holder of such Registrable Securities as the
Company and the Guarantors may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company and the Guarantors of the happening
of any event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company and the Guarantors, such Holder will deliver to the
Company and the Guarantors (at their expense) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company and the Guarantors shall give any such notice to
suspend the disposition of Registrable Securities pursuant to a Registration
Statement, the Company and the Guarantors shall extend the period during which
the Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days during the period from and including the date of
the giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions. The Company and the Guarantors may give any such notice only
twice during any 365-day period and any such suspensions may not exceed 30 days
for each suspension and there may not be more than two suspensions in effect
during any 365-day period.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.
4. PARTICIPATION OF BROKER-DEALERS IN EXCHANGE OFFER.
(a) The Staff of the SEC has taken the position that any broker-dealer
that receives Exchange Securities for its own account in the Exchange Offer
in exchange for Securities that were acquired by such broker-dealer as a
result of market-making or other trading activities (a "Participating
Broker-Dealer") may be deemed to be an "underwriter" within the meaning of
the 1933 Act and must deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such Exchange Securities.
The Company and the Guarantors understand that it is the Staff's
position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing a
statement to the above effect and the means by which Participating
Broker-Dealers may resell the Exchange Securities, without naming the
Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the
1933 Act in connection with resales of Exchange Securities for their own
accounts, so long as the Prospectus otherwise meets the requirements of the
1933 Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company and the Guarantors agree that the provisions of
this Agreement as they relate to a Shelf Registration shall also apply to
an Exchange Offer Registration to the extent, and with such reasonable
modifications thereto as may be, reasonably requested by the Placement
Agents or by one or more Participating Broker-Dealers, in each case as
provided in clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above;
provided that:
(i) the Company and the Guarantors shall not be required to amend
or supplement the Prospectus contained in the Exchange Offer
Registration Statement, as would otherwise be contemplated by Section
3(i), for a period exceeding 90 days after the last Exchange Date (as
such period may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement) and Participating Broker-Dealers shall
not be authorized by the Company and the Guarantors to deliver and
shall not deliver such Prospectus after such period in connection with
the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer
Registration, to the extent not required by the positions of the Staff
of the SEC or the 1933 Act and the rules and regulations thereunder,
will be in conformity with the reasonable request to the Company by
the Placement Agents or with the reasonable request in writing to the
Company by one or more broker-dealers who certify to the Placement
Agents, the Company and the Guarantors in writing that they anticipate
that they will be Participating Broker-Dealers; provided that, in
connection with such application of the Shelf Registration procedures
set forth in Section 3 to an Exchange Offer Registration, the Company
and the Guarantors shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be Morgan
Stanley & Co. Incorporated unless it elects not to act as such
representative, (y) to pay the fees and expenses of only one counsel
representing the Participating Broker-Dealers which shall be counsel
to the Placement Agents unless such counsel elects not to so act, and
(z) to cause to be delivered only one, if any, "cold comfort" letter
with respect to the Prospectus in the form existing on the last
Exchange Date and with respect to each subsequent amendment or
supplement, if any, effected during the period specified in clause (i)
above.
(c) The Placement Agents shall have no liability to the Company, the
Guarantors or any Holder with respect to any request that it may make
pursuant to Section 4(b) above.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless the Placement Agents, each Holder
and each Person, if any, who controls any Placement Agent or any Holder
within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act, or is under common control with, or is controlled by, any
Placement Agent or any Holder, from and against all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred by the Placement Agent, any Holder or any such
controlling or affiliated Person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Securities
or Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (as amended or supplemented if the Company
and the Guarantors shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Placement Agents or any Holder furnished to the
Company and the Guarantors in writing through Morgan Stanley & Co.
Incorporated or any selling Holder expressly for use therein. In connection
with any Underwritten Offering permitted by Section 3, the Company and the
Guarantors will also jointly and severally indemnify the Underwriters, if
any, selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each
Person who controls such Persons (within the meaning of the 1933 Act and
the 1934 Act) to the same extent as provided above with respect to the
indemnification of the Holders, if requested in connection with any
Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Guarantors, the Placement Agents and the
other selling Holders, and each of their respective directors, officers who
sign the Registration Statement and each Person, if any, who controls the
Company or the Guarantors, any Placement Agent and any other selling Holder
within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the same extent as the foregoing indemnity from the Company
and the Guarantors to the Placement Agents and the Holders, but only with
reference to information relating to such Holder furnished to the Company
and the Guarantors in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may
be sought pursuant to either paragraph (a) or paragraph (b) above, such
Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Placement Agents and all Persons, if any, who control any Placement
Agent within the meaning of either Section 15 of the 1933 Act or Section 20
of the 1934 Act, (b) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company and the Guarantors,
their directors and officers who sign the Registration Statement and each
Person, if any, who controls the Company or the Guarantors within the
meaning of either such Section and (c) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Holders and
all Persons, if any, who control any Holders within the meaning of either
such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In such case involving the Placement Agents and Persons
who control the Placement Agents, such firm shall be designated in writing
by Morgan Stanley & Co. Incorporated. In such case involving the Holders
and such Persons who control Holders, such firm shall be designated in
writing by the Majority Holders. In all other cases, such firm shall be
designated by the Company and the Guarantors. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent but, if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which such indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company, the Guarantors and the Holders shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Guarantors or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to contribute
pursuant to this Section 5(d) are several in proportion to the respective
principal amount of Registrable Securities of such Holder that were
registered pursuant to a Registration Statement.
(e) The Company, the Guarantors and each Holder agree that it would
not be just or equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5, no
Holder shall be required to indemnify or contribute any amount in excess of
the amount by which the total price at which Registrable Securities were
sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of the Placement Agents, any Holder or any Person controlling any Placement
Agent or any Holder, or by or on behalf of the Company or the Guarantors,
their officers or directors or any Person controlling the Company or the
Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any
sale of Registrable Securities pursuant to a Shelf Registration Statement.
6. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company and the Guarantors have
not entered into, and on or after the date of this Agreement will not enter
into, any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The rights granted to the Holders hereunder do
not in any way conflict with and are not inconsistent with the rights
granted to the holders of the Company's and the Guarantors' other issued
and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company and the Guarantors have obtained
the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or consent; provided, however,
that no amendment, modification, supplement, waiver or consent to any
departure from the provisions of Section 5 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing
by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such
Holder to the Company and the Guarantors by means of a notice given in
accordance with the provisions of this Section 6(c), which address
initially is, with respect to the Placement Agents, the address set forth
in the Placement Agreement, and (ii) if to the Company and the Guarantors,
initially at the Company's address set forth in the Placement Agreement and
thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of
the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Placement
Agreement. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such
Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person
shall be entitled to receive the benefits hereof. The Placement Agents (in
their capacity as Placement Agents) shall have no liability or obligation
to the Company or the Guarantors with respect to any failure by a Holder to
comply with, or any breach by any Holder of, any of the obligations of such
Holder under this Agreement.
(e) Purchases and Sales of Securities. The Company and the Guarantors
shall not, and shall use their best efforts to cause their affiliates (as
defined in Rule 405 under the 1933 Act) not to, purchase and then resell or
otherwise transfer any Securities.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Placement Agents, on the other hand,
and shall have the right to enforce such agreements directly to the extent
they deem such enforcement necessary or advisable to protect their rights
or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by the laws of the
State of New York.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
KANSAS CITY SOUTHERN
By: /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Senior Vice President & CFO
THE KANSAS CITY SOUTHERN RAILWAY
COMPANY
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Senior Vice President & CFO
GATEWAY EASTERN RAILWAY COMPANY
By /s/ Jay M. Nadlman
-----------------------------------
Name: Jay M. Nadlman
Title: Vice President & Secretary
MID-SOUTH MICROWAVE, INC.
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
PABTEX GP, LLC
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Authorized Representative
PABTEX L.P.
BY: PABTEX, GP, LLC
By: /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Authorized Representative
RICE-CARDEN CORPORATION
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
SIS BULK HOLDING, INC.
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
SOUTHERN DEVELOPMENT COMPANY
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
SOUTHERN INDUSTRIAL SERVICES, INC.
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
TRANS-SERVE, INC.
By /s/ Robert H. Berry
-----------------------------------
Name: Robert H. Berry
Title: Vice President & Treasurer
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
J.P. MORGAN SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
SCOTIA CAPITAL (USA) INC.
By: MORGAN STANLEY & CO. INCORPORATED
By /s/ Bryan Andrzejewski
-----------------------------------
Name: Bryan Andrzejewski
Title: Executive Director
SCHEDULE A
Gateway Eastern Railway Company
Mid-South Microwave, Inc.
PABTEX GP, LLC
PABTEX L.P.
Rice-Carden Corporation
SIS Bulk Holding, Inc.
Southern Development Company
Southern Industrial Services, Inc.
Trans-Serve, Inc.