Exhibit 5.1
[Sonnenschein Nath & Rosenthal Letterhead}
June 18, 2001
Kansas City Southern Industries, Inc.
114 West 11th Street
Kansas City, Missouri 64105
Re: Kansas City Southern Industries, Inc. Registration Statement on Form
S-3
Ladies and Gentlemen:
We have acted as special counsel to Kansas City Southern Industries, Inc.,
a Delaware corporation (the Company"), The Kansas City Southern Railway Company,
a Missouri corporation and wholly owned subsidiary of the Company ("KCSR"), and
each of the wholly owned subsidiaries of the Company set forth on the attached
EXHIBIT A (the "Subsidiary Guarantors") in connection with the preparation and
filing with the U.S. Securities and Exchange Commission (the "Commission") of:
o a Registration Statement on Form S-3 as filed on May 16, 2001 and
Amendment No. 1 to that Form S-3 as filed on June 5, 2001 (together,
the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the proposed offering and
issuance from time to time of up to $450,000,000 aggregate principal
amount of securities;
o the Common Stock Prospectus Supplement as filed on June 5, 2001 (the
"Common Stock Prospectus Supplement"), relating to 4,000,000 shares of
common stock of the Company, par value $0.01 per share (the "Common
Stock") that are to be initially offered (with an additional 600,000
shares of Common Stock reserved for the underwriters' over-allotment
option);
o the Mandatory Convertible Unit Preliminary Prospectus Supplement as
filed on June 5, 2001 (the "Mandatory Convertible Unit Prospectus
Supplement") relating to 4,600,000 Mandatory Convertible Units, as
defined in the Mandatory Unit Prospectus Supplement (with an
additional 690,000 Mandatory Convertible Units reserved for the
underwriters' over-allotment option), each of which will initially
consist of
o a senior note due 2007 in the principal amount of $25 of KCSR
(collectively, the "Debt Securities") and
o stock purchase contracts (the "Stock Purchase Contracts") under each
of which on August 17, 2004, for $25, the holder will purchase a
number of newly issued shares of Common Stock of the Company
calculated according to a formula based on the market price in the
period before the purchase date (such initial form of the Mandatory
Convertible Units is a "Corporate Unit");
o Guarantees of the Debt Securities (the "Guarantees") by KCSI and all
the Subsidiary Guarantors (collectively, the "Guarantors").
o Up to 9,000,000 shares of Common Stock that are to be reserved for
issuance pursuant to those Stock Purchase Contracts which are
components of the Mandatory Convertible Units, with up to an
additional 1,350,000 shares of Common Stock reserved for the
underwriters' over-allotment option;
The Common Stock Prospectus Supplement and the Mandatory Convertible Unit
Prospectus Supplement are referred to collectively as the "Prospectus
Supplements."
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.
The Debt Securities are to be issued pursuant to the Indenture in the form
filed as Exhibit 4.2 to the Registration Statement (the "Indenture"), by and
between KCSR, the Guarantors, and the Bank of New York, as trustee.
In connection with rendering this opinion, we have examined and relied on
the following: (i) the Registration Statement and exhibits thereto as filed with
the Commission, including the form of Indenture and the form of Underwriting
Agreements for the offerings pursuant to the Prospectus Supplements, (ii) the
Prospectus Supplements, (iii) organizational documents of KCSI, KCSR and each of
the Subsidiary Guarantors, (iv) the minutes and records of the corporate
proceedings relating to the issuance of securities covered by the Prospectus
Supplements of KCSI, KCSR and the Subsidiary Guarantors and (v) such documents,
certificates and records of public officials and the Company and its officers
and other documents and legal matters as we have deemed necessary for the
purpose of rendering this opinion.
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 legal capacity of all natural persons, the authority of
such persons signing on behalf of the parties thereto other than KCSI, KCSR and
the Subsidiary Guarantors and the due authorization, execution and delivery of
all documents by, and the enforceability against, the parties thereto other than
KCSI, KCSR, and the Subsidiary Guarantors. As to questions of fact material to
such opinions we have relied upon certificates of officers and other
representatives of the Company 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.
Our opinions as herein expressed are subject to the following
qualifications and limitations: (i) the effect of Federal and state bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance,
fraudulent transfer and other laws relating to or affecting the rights of
secured or unsecured creditors generally (or affecting the rights of only
creditors of specific types of debtors), with respect to which we express no
opinion; (ii) limitations imposed by general principles of equity or public
policy upon the enforceability of any of the remedies, covenants or other
provisions of the documents upon which we have relied, including, without
limitation, concepts of materiality, good faith and fair dealing and upon the
availability of injunctive relief or other equitable remedy, and the application
of principles of equity (regardless of whether enforcement is considered in
proceedings at law or in equity) and (iii) we express no opinion as the laws of
any jurisdiction other than the laws of the State of Missouri, the State of New
York (excluding local laws), the State of Illinois (excluding local laws), the
laws of the State of Texas with respect to the Subsidiary Guarantors organized
in Texas (with respect to which we have relied solely on the opinion of Jenkens
& Gilchrist, a copy of which is attached hereto as Exhibit B) and, based solely
upon a review of the statutes, the General Corporation Law of the State of
Delaware and the Delaware Revised Uniform Limited Partnership Act. 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 are familiar with the proceedings heretofore taken and proposed to be
taken by you in connection with the authorization, registration, issuance and
sale of the securities covered by the Prospectus Supplements (including, among
other things, the contemplated execution and delivery of the Indenture relating
to the Debt Securities and the Underwriting Agreements covering the sale of the
Common Stock and the Mandatory Convertible Units, which initially consist of the
Corporate Units) and for the purposes of this opinion, have assumed such
proceedings will be timely completed in the manner presently proposed.
Subject to the proposed additional proceedings being taken as now
contemplated prior to the issuance of the securities covered by the Prospectus
Supplements and the terms of such securities being otherwise in compliance with
then-applicable law, and based on and subject to our examination described
herein and the assumptions, exceptions, qualifications and limitations stated
herein, we are of the opinion, having due regard for such legal considerations
as we deem relevant, that:
1. The Mandatory Convertible Units, initially consisting of the Debt
Securities and the Stock Purchase Contracts, upon the issuance thereof (when
duly executed and, in the case of the Debt Securities, authenticated in
accordance with the terms of the Indenture) and sale (delivered by or on behalf
of the Company against payment therefor) in accordance with the terms of the
Underwriting Agreement relating thereto and as contemplated by the Mandatory
Convertible Unit Prospectus Supplement, will be validly issued and binding
obligations of the Company, and with respect to the Debt Securities, of KCSR;
2. Those shares of Common Stock that are to be issued in accordance with
the terms of the Stock Purchase Contracts that are components of the Mandatory
Convertible Units, when such Mandatory Convertible Units are sold in accordance
with the terms of the Underwriting Agreement relating thereto and as
contemplated by the Mandatory Convertible Unit Prospectus Supplement, and when
such shares have been issued (delivered by or on behalf of the Company against
payment therefor) in accordance with the terms of the Mandatory Convertible Unit
Prospectus Supplement and the Stock Purchase Contracts, will be validly issued,
fully paid and nonassessable;
3. Those shares of Common Stock covered by the Common Stock Prospectus
Supplement, when issued and sold (delivered by or on behalf of the Company
against payment therefor) in accordance with the terms of the Underwriting
Agreement relating thereto and as contemplated by such Prospectus Supplement,
will be validly issued, fully paid and nonassessable;
4. The Guarantees that are to be issued in accordance with the terms of the
Indenture, of the Debt Securities that are components of the Mandatory
Convertible Units, when such Mandatory Convertible Units are sold (delivered by
or on behalf of the Company against payment therefor) in accordance with the
terms of the Underwriting Agreement relating thereto and as contemplated by the
Mandatory Convertible Unit Prospectus Supplement, and upon the issuance of the
Guarantees (when duly executed and when the Debt Securities are duly executed
and authenticated, each in accordance with the terms of the Indenture) and
delivery by each of the Guarantors in connection with the issuance of the Debt
Securities, will be validly issued and binding obligations of the Guarantors in
accordance with their terms;
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 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 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 yours,
SONNENSCHEIN NATH & ROSENTHAL
/s/ Sonnenschein Nath & Rosenthal
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EXHIBIT A
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JURISDICTION OF
NAME INCORPORATION OR
ORGANIZATION
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Gateway Eastern Railway Company Illinois
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Gateway Western Railway Company Illinois
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PABTEX GP, LLC Texas
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PABTEX, L.P. Delaware
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SIS Bulk Holding, Inc. Delaware
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KCS Transportation Company Delaware
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Mid-South Microwave, Inc. Delaware
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Rice-Carden Corporation Missouri
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Southern Development Company Missouri
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Southern Industrial Services, Inc. Delaware
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Trans-Serve, Inc. Delaware
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EXHIBIT B
[JENKENS AND GILCHRIST LETTERHEAD]
June 18, 2001
Sonnenschein Nath & Rosenthal
4520 Main Street, Suite 1100
Kansas City, Missouri 64111
Attn: Diane Bono
Re: PABTEX GP, LLC
Ladies and Gentlemen:
We have acted as special counsel to PABTEX GP, LLC, a Texas limited
liability company (the "Guarantor"), in connection with its proposed guaranty of
the obligations of The Kansas City Southern Railway Company, a Missouri
corporation (the "Issuer") for those senior notes due 2007 of the Issuer (the
"Debt Securities") to be registered in connection with the proposed offering by
Kansas City Southern Industries, Inc., the parent of the Issuer (the "Parent"),
of up to $450,000,000 aggregate amount of securities pursuant to a Registration
Statement on Form S-3 as filed on May 16, 2001 and Amendment No. 1 to that Form
S-3 as filed on June 5, 2001 (together, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") and pursuant to the
Indenture with respect to the Debt Securities in the form filed as Exhibit 4.2
to the Registration Statement (the "Indenture"), among Guarantor, SIS Bulk
Holdings, Inc., the Issuer, Parent, Gateway Eastern Railway Company, Gateway
Western Railway Company, KCS Transportation Company, Mid-South Microwave, Inc.,
PABTEX, L.P., Rice-Carden Corporation, Southern Development Company, Southern
Industrial Services, Inc. and Trans-Serve, Inc., and The Bank of New York, as
trustee under the Indenture (the "Guaranty"). The Debt Securities are components
of units that are to be traded on the New York Stock Exchange (the "Exchange")
by Parent. Such units (the "Corporate Units") initially consist of (i) the Debt
Securities and (ii) Stock Purchase Contracts under each of which the holder will
purchase a number of newly issued shares of Common Stock of the Parent according
to a formula based on the market price in the period before the purchase date
(the "Stock Purchase Contracts"). Capitalized terms used but not otherwise
defined herein have the meanings ascribed to them in the Registration Statement.
We have considered such questions of law as we deem necessary for the
purpose of rendering the opinions set forth herein. We have assumed and this
opinion is subject to the genuineness of all signatures, the authenticity of all
documents, certificates and records submitted to us as originals, the conformity
to the originals of all documents, certificates and records submitted to us as
certified or reproduction copies and the authenticity of the originals of such
documents, certificates and records, the legal capacity of all natural persons
executing documents, certificates and records, and the completeness and accuracy
as of the date of this opinion letter of the information contained in such
documents, certificates and records. In rendering the opinions contained herein,
we have relied solely upon representations, certifications and other statements
of the officers and other representatives of the Guarantor. We have not made or
undertaken to make any independent investigation of our own to establish or
verify the accuracy or completeness of such factual representations,
certifications and other information, and we have assumed in rendering the
opinions contained herein that none of such representations, certifications and
other information contains any untrue statement of material fact or omits to
state a material fact necessary to render the statements made, in light of the
circumstances in which they were made, not misleading.
We do not opine or represent as to any issues save the specific issues
addressed herein, and no opinion may be inferred or implied beyond that
expressly stated herein. We express no opinion as to the enforceability of the
Guaranty under the laws of any jurisdictions other than the State of Texas and
the federal laws of the United States. Notwithstanding anything herein to the
contrary, we express no opinion as to matters governed by any laws other than
the laws of the State of Texas.
Based upon and subject to the assumptions, qualifications, exclusions and
other limitations contained in this opinion letter, we are of the opinion that
subject to: (i) the Indenture having been duly qualified under the Trust
Indenture Act of 1939, as amended, (ii) the Registration Statement having been
declared effective under the Securities Act, and (iii) the Guaranty having been
duly executed and authenticated in accordance with the provisions of the
Indenture, the Guaranty will be duly authorized by all corporate action
necessary under Texas law and the Guarantor's organizational documents and will
be enforceable against the Guarantor in accordance with its terms.
The opinion incorporates by reference the Other Common Qualifications and
the Other Common Texas Qualifications contained in the Report of the Legal
Opinion Committee Regarding Legal Opinions in Business Transactions (the "TEXAS
REPORT") of the Business Law Section of the State Bar of Texas (1992), and the
opinion should be read in conjunction with the Texas Report.
You are hereby notified that (a) we do not consider you to be our client in
the matters to which this opinion letter relates, (b) neither the Texas Code of
Professional Responsibility nor current case law clearly articulates the
circumstances under which an attorney may give a legal opinion to a person other
than the attorney's own client, and (c) a court might uphold this opinion or it
might determine that it is improper for us to issue, and for you to rely upon, a
legal opinion issued by us when we have acted as counsel to the Guarantor in
connection with the transaction contemplated in the initial paragraph of this
opinion letter.
Except as otherwise provided herein, this opinion letter and the matters
addressed herein are as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise you of any change in any matter set forth
herein occurring after the date hereof or the date referred to herein, as the
case may be. This opinion letter is limited to the matters stated herein and no
opinion is implied or may be inferred beyond the matters expressly stated.
This opinion letter is solely for your benefit for the purpose of your
opinion regarding the above described transactions to be delivered in accordance
with the requirements of the Item 601(b)(5) of Regulation S-K under the Act, 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 as an attachment to Exhibit 5.1 to 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.
Respectfully submitted,
/s/ Bryan W. Lee
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Bryan W. Lee