Exhibit 5.1
July 24, 2002
Kansas City Southern
427 West 12th Street
Kansas City, Missouri 64105
The Kansas City Southern Railway Company
427 West 12th Street
Kansas City, Missouri 64105
The Subsidiaries of Kansas City Southern
Listed on Exhibit A attached hereto
Re: The Kansas City Southern Railway Company/Kansas City Southern
Registration Statement on Form S-4 (Reg. No. 333-92360)
Ladies and Gentlemen:
We have acted as special counsel to The Kansas City Southern Railway
Company, a Missouri corporation (the "Issuer"), Kansas City Southern, a Delaware
corporation and parent corporation of the Issuer ("Parent"), and each of the
wholly owned subsidiaries of Parent set forth on the attached Exhibit A (the
"Subsidiary Guarantors") in connection with the proposed registration under the
Securities Act of 1933, as amended (the "Act") by the Issuer of its offer to
exchange (the "Exchange Offer") up to $200,000,000 in aggregate principal amount
of its 7 1/2% Senior Notes due 2009 (the "new notes") for and in replacement of
a like aggregate principal amount of the Issuer's privately placed 7 1/2% Senior
Notes due 2009 (the "outstanding notes"). The new notes will be issued pursuant
to an Indenture, dated as of June 12, 2002, among the Issuer, the Guarantors
(defined below) and U.S. Bank National Association, as trustee (the
"Indenture"). The obligations of the Issuer under the new notes will be
guaranteed (collectively, the "Guarantees") pursuant to the terms of the
Indenture by Parent and the Subsidiary Guarantors (collectively, the
"Guarantors"). The terms of the Exchange Offer are described in the Registration
Statement on Form S-4 (Registration No. 333-92360) originally filed with the
Securities and Exchange Commission (the "Commission") on July 12, 2002 (such
Registration Statement, as amended or supplemented, is hereinafter referred to
as the "Registration Statement"). This opinion is being delivered in accordance
with the requirement of Item 601(b)(5) of Regulation S-K under the Act.
Capitalized terms used but not otherwise defined herein have the meanings
ascribed to them in the Registration Statement.
In connection with this opinion, we have examined originals or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments as we have deemed necessary for the
purposes of this opinion, including (i) the certificate or articles of
incorporation or other organizational documents, and the bylaws or regulations
of the Issuer and each of the Guarantors, (ii) minutes and records of the
corporate proceedings of the Issuer with respect to the issuance of the new
notes, (iii) the Registration Statement, (iv) the Indenture, (v) the form of new
note, and (vi) the Registration Rights Agreement, dated as of June 5, 2002, by
and among the Issuer, the Guarantors and Morgan Stanley & Co. Incorporated, J.P.
Morgan Securities Inc., Deutsche Bank Securities, Inc., Banc One Capital
Markets, Inc., and Scotia Capital (USA) Inc. (the "Registration Rights
Agreement").
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of the
signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Issuer and the Guarantors and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Issuer and the Guarantors. As to any facts material to the
opinions expressed herein which we have not independently established or
verified, we have relied upon the statements and representations of officers and
other representatives of the Issuer, the Guarantors and others. We have also
assumed that each of the Subsidiary Guarantors has the power and authority to
enter into and perform its obligations under its Guarantee, and that neither
entering into or performing its Guarantee is in contradiction of the applicable
laws of the jurisdiction of formation of the respective Subsidiary Guarantors.
Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
applicable bankruptcy, insolvency, reorganization, moratorium, arrangement and
other laws affecting creditor's rights, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances, fraudulent
transfers and preferential transfers, (ii) the limitations imposed by general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief regardless of whether considered in a
proceeding in equity or at law; and (iii) public policy considerations which may
limit the rights of parties to obtain certain remedies.
We render no opinion herein as to matters involving the laws of any
jurisdiction other than the present laws of the United States of America, the
present laws of the State of Missouri (excluding local laws), the present laws
of the State of New York (excluding local laws), the General Corporation Law of
the State of Delaware and the present judicial interpretations thereof. We
advise you that the issues addressed by this opinion may be governed in whole or
in part by other laws, and we express no opinion as to whether any relevant
difference exists between the laws upon which our opinion is based and any other
laws that may actually govern. We note that the enforceability of the Guarantees
may be governed in part by the laws of the jurisdictions under which each of the
Guarantors is formed. Because we are not admitted to practice in each such
jurisdiction, we have assumed for purposes of our opinion that the laws of these
jurisdictions with respect to enforceability are not materially different than
the laws of the State of New York.
Based upon and subject to the assumptions, qualifications, exclusions and
other limitations contained in this letter, we are of the opinion that when: (i)
the Registration Statement has become effective under the Act, (ii) the
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended, (iii) the outstanding notes have been validly tendered to the Issuer in
the Exchange Offer, and (iv) the new notes and the Guarantees have been duly
executed and authenticated in accordance with the provisions of the Indenture
and duly delivered to the purchasers thereof in exchange for the outstanding
notes in accordance with the terms of the Exchange Offer and the Registration
Rights Agreement, the new notes will be validly issued and binding obligations
of the Issuer and the Guarantees will be validly issued and binding obligations
of the Guarantors.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. This
opinion shall not be construed as or deemed to be a guaranty or insuring
agreement. This opinion is rendered on the date hereof and we have no continuing
obligation hereunder to inform you of changes of law, including judicial
interpretations of law, or fact subsequent to the date hereof or of facts which
we become aware of after the date hereof.
This opinion is solely for your benefit and may not be furnished to, or
relied upon by, any other person or entity without the express written consent
of the undersigned. However, we hereby consent to the filing of this opinion
with the Commission as Exhibit 5.1 to the Registration Statement. We also
consent to the reference to our firm under the heading "Legal Matters" in the
Registration Statement. In giving this consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission.
Sincerely,
/s/ Sonnenschein Nath & Rosenthal
Exhibit A
---------
Jurisdiction of
Incorporation
Name or Organization
- ---- ----------------
Gateway Eastern Railway Company ......................... Illinois
Mid-South Microwave, Inc. ............................... Delaware
PABTEX GP, LLC .......................................... Texas
PABTEX, L.P. ............................................ Delaware
Rice-Carden Corporation ................................. Missouri
SIS Bulk Holding, Inc. .................................. Delaware
KCS Transportation Company .............................. Delaware
Southern Development Company ............................ Missouri
Southern Industrial Services, Inc. ...................... Delaware
Trans-Serve, Inc. ....................................... Delaware