Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 15, 2004, but to become
effective as herein provided ("Registration Rights Agreement"), by and between
Kansas City Southern, a Delaware corporation ("KCS"), and Grupo TMM, S.A., a
SOCIEDAD ANONIMA organized under the laws of the United Mexican States ("UMS")
("TMM"), TMM Multimodal, S.A. de C.V., a SOCIEDAD ANONIMA DE CAPITAL VARIABLE
organized under the laws of the UMS, and the Principal Stockholders of TMM who
have executed this Registration Rights Agreement ("Principal Stockholders")
(collectively, the "Parties").
RECITALS
A. Pursuant to an Amended and Restated Acquisition Agreement (the
"Acquisition Agreement") dated the date hereof among certain of the Parties and
others, KCS will acquire from MM all of the issued and outstanding capital stock
of Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., a SOCIEDAD ANONIMA
DE CAPITAL VARIABLE organized under the laws of the UMS ("GTFM") held by MM and
MM will receive from KCS shares of Common Stock (as defined below).
B. As a condition to the consummation of the transactions contemplated by
the Acquisition Agreement, the Parties have entered into this Registration
Rights Agreement to provide TMM, MM and the Principal Stockholders with certain
registration rights with respect to the shares of Registrable Stock (as defined
below).
AGREEMENTS
In consideration of the recitals (which are incorporated herein by
reference), the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. Terms initially capitalized but not otherwise defined
herein shall have the meanings given such terms in the Acquisition Agreement,
except for the following:
"CLOSING DATE" shall have the meaning assigned to such term in the
Acquisition Agreement.
"COMMON STOCK" shall mean the common stock, par value $.01 per share, of
KCS. f
"EFFECTIVE DATE" shall have the meaning set for in Section 16 hereof.
"HOLDERS" means TMM, MM and the Principal Stockholders and, to the extent
designated by TMM, MM or the Principal Stockholders as a "Holder," any Permitted
Transferee who acquires shares of Registrable Stock from a Holder and agrees to
be bound by the terms and conditions of this Registration Rights Agreement. The
term "Holder" shall mean any one of the Holders.
"PERMITTED TRANSFEREE" shall mean those persons to whom TMM, MM and the
Principal Stockholders can transfer Registrable Stock in accordance with the
terms of the Stockholders' Agreement.
"PROSPECTUS" shall mean any prospectus which is a part of a Registration
Statement, together with all amendments or supplements thereto, including any
document incorporated, or deemed to be incorporated, by reference therein.
"REGISTRABLE STOCK" shall consist of the shares of Common Stock (a) issued
by KCS pursuant to the Acquisition Agreement; (b) issued pursuant to the
Consulting Agreement; or (c) otherwise acquired by a Holder upon exercise of
pre-emptive rights in compliance with the Stockholders' Agreement; PROVIDED,
HOWEVER, that Registrable Stock shall not be deemed to include (i) any shares
after such shares have been registered for resale under the Securities Act and
sold pursuant to such registration, (ii) any shares that have been sold without
registration under the Securities Act in compliance with Rule 144, or pursuant
to any other exemption from registration under the Securities Act, and (iii) any
shares which are eligible to be sold without registration under the Securities
Act pursuant to subsection (k) of Rule 144 or a comparable exemption from
registration that enables the sale of all shares held by a Holder without
registration under the Securities Act and without restriction as to the manner
of sale.
"REGISTRATION EXPENSES" shall means all expenses, except Selling Expenses,
incurred by KCS in complying with Sections 2 and 3, including all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for KCS and blue sky fees and expenses.
"REGISTRATION STATEMENT" shall mean any registration statement filed with
the Securities and Exchange Commission in accordance with the Securities Act,
together with all amendments (including any post-effective amendments) or
supplements thereto and any documents incorporated, or deemed to be
incorporated, by reference therein. For purposes of this Registration Rights
Agreement, references to "amend," "amendment" or "supplement," when used in
relation to the Registration Statement or any Prospectus, shall include the
filing of any document that is, or is deemed to be, incorporated by reference
therein.
"REQUEST" shall have the meaning set forth in Section 2(A) hereof.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act.
"RULE 415" shall mean Rule 415 promulgated under the Securities Act.
"SECURITIES" shall mean any debt or equity securities of KCS, whether now
or hereafter authorized, and any instrument convertible into or exchangeable for
Securities or a Security. The term "Security" shall mean any one of the
Securities.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended prior to
or after the Effective Date of this Registration Rights Agreement, or any
federal statute or statutes which shall be enacted to take the place of such
Act, together with all rules and regulations promulgated thereunder.
"SECURITIES AND EXCHANGE COMMISSION" shall mean the United States
Securities and Exchange Commission or any successor to the functions of such
agency.
"SELLER" shall mean each Holder of Registrable Stock as to which KCS could
be required to file a Registration Statement or which could be registered under
the Securities Act at the request of such Holder pursuant to any of the
provisions of this Registration Rights Agreement.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the sale of the Registrable
Stock and expenses of all marketing and promotional efforts of the underwriters
in connection with an underwritten offering of Registrable Stock in a
transaction covered by a Registration Statement effected pursuant to Section 2.
2. REQUIRED REGISTRATIONS.
(A) Subject to the terms of this Registration Rights Agreement, upon the
written request (the "Request") to register any number of shares of Registrable
Stock under the Securities Act made at any time prior to the five year
anniversary of the Effective Date of this Registration Rights Agreement by
Holders of not less than 10% of the shares of Registrable Stock specifying the
intended method of disposition thereof, KCS will use commercially reasonable
efforts to effect the registration of Registrable Stock under the Securities Act
for disposition in accordance with the intended method of disposition stated in
the Request, to the extent requisite to permit the disposition (in accordance
with the intended method set forth in the Request) of the Registrable Stock to
be so registered, but only to the extent provided for in the following
provisions of this Registration Rights Agreement. Whenever KCS shall, pursuant
to this Section 2(A), be requested to effect the registration of any Registrable
Stock under the Securities Act, KCS shall, within ten (10) Business Days after
receipt of the Request, give written notice of such proposed registration to all
Holders of Registrable Stock, stating that such Holders have the right to
request that any or all of the Registrable Stock owned by them be included in
such registration and specifying the intended filing date of the Registration
Statement relating to such Request (which date shall be at least ten (10)
Business Days after the date such notice is sent to the Holders). KCS shall
include in such registration all Registrable Stock with respect to which KCS
receives written requests from the Holders thereof for inclusion therein
(stating the intended method of disposition of such Registrable Stock) within
the ten (10) Business Days prior to the filing of the Registration Statement
relating to such request. KCS will use commercially reasonable efforts to file
the Registration Statement relating to the Request to permit the disposition of
all Registrable Stock as to which KCS has received notices from Holders in
accordance with the intended methods of disposition set forth in such notices
not later than thirty (30) Business Days after receipt by KCS of the initial
Request; provided that KCS shall not be required to file a Registration
Statement prior to the 180th day after the consummation of the Acquisition (it
being understood that if a Request is made prior to such time the filing of such
Registration Statement shall be deferred until such 180th day). Thereafter, KCS
shall use its commercially reasonable efforts to have the Registration Statement
declared effective at the earliest practicable time and shall use its
commercially reasonable efforts to keep such Registration Statement effective
for the period of time required to effect the disposition by such Holders in
accordance with the intended method of disposition described in the requests of
such Holders, all to the extent requisite to permit such sale or other
disposition by such Holders of the Registrable Stock so registered. So long as
KCS is eligible to use Form S-3 (or any successor form) under the Securities
Act, any Request may specify that the Registration Statement be a "shelf
registration" permitting the offering of Registrable Stock registered thereby on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act (or
any successor
rule), in which case, KCS shall use its commercially reasonable efforts to
maintain such Registration Statement continuously effective and usable for sales
thereunder for a period of not more than one year; provided that KCS shall not
be required hereunder to file more than one "shelf registration".
(B) The foregoing registration rights of Holders of Registrable Stock shall
be deemed satisfied by KCS when six Registration Statements covering shares of
Registrable Stock which KCS has been requested to register pursuant to Section
2(A) hereof shall have been filed by KCS with and made effective by the
Securities and Exchange Commission under the Securities Act. To the extent an
underwritten public offering is the intended method of distribution of
Registrable Stock with respect to any Request submitted, the Holders
participating in such offering shall have the right to select the investment
banker or bankers who shall serve as the manager and/or co-managers for the
offering of Securities covered by such Registration Statement, subject to the
approval by KCS of such selection, which approval shall not be unreasonably
withheld.
(C) Any registration under this Section 2 shall be on such appropriate
registration form of the Securities and Exchange Commission (i) as shall be
selected by KCS and (ii) as shall permit the disposition of the Registrable
Stock in accordance with the intended method or methods of disposition specified
in Holders' requests for such registration.
(D) Notwithstanding the foregoing, KCS shall be permitted to delay the
filing of any Registration Statement pursuant to this Section 2: (i) if KCS is
not eligible to use Form S-3 (or a comparable or successor form) to effect such
registration; (ii) if KCS, within ten (10) days of the receipt of the Request,
gives notice to the Holders of its bona fide intention to effect the filing of a
Registration Statement with the Securities and Exchange Commission within thirty
(30) days of receipt of the Request (other than a Registration Statement on Form
S-8), in which case KCS's obligation to file the Registration Statement pursuant
to this Section 2 shall be deferred for a period not to exceed ninety (90) days
from the date of the Request; or (iii) if KCS shall furnish to Holders a
resolution adopted by the Board of Directors of KCS to the effect that in the
good faith judgment of KCS it would be seriously detrimental to KCS for a
Registration Statement to be filed at that time, specifying with particularity
the basis therefor (subject to the Holders entering into appropriate
non-disclosure agreements) in which case KCS's obligation to file a Registration
Statement shall be deferred for a period not to exceed sixty (60) days from the
receipt of the Request. KCS shall not be required to effect any registration
pursuant to this Section 2 once it has effected six (6) registrations in
accordance with Section 2.
(E) In determining the number of registrations effected pursuant to this
Section 2, such registrations shall not include any registration if (i) the
Registration Statement did not become effective or remain in effect as required
by this Section 2; or (ii) the Registration Statement is withdrawn at the
request of the Holders and the Holders agree to pay the Registration Expenses
associated with such Registration Statement.
(F) KCS shall not permit any securities of any other person to be included
in any Registration Statement filed pursuant to this Section 2, other than
securities sold for the account of KCS, without the consent of the Holders whose
Registrable Stock is included in such Registration Statement, which consent
shall not be unreasonably withheld.
(G) KCS shall use its commercially reasonable efforts to qualify for
eligibility to use Form S-3 with respect to registrations requested pursuant to
this Section 2.
3. INCIDENTAL REGISTRATION.
(A) If KCS, at any time after the 180 days following the date of
consummation of the transactions contemplated by the Acquisition Agreement,
proposes or is required to file a registration statement under the Securities
Act related to the offer or sale of shares of Common Stock on a form which
permits inclusion of the Registrable Stock (other than a registration on Form
S-4 or S-8 or any successor or similar forms), it will give written notice to
all Holders of then existing Registrable Stock of its intention so to do. Upon
the written request of any such Holder given to KCS within fifteen Business Days
after receipt of any such notice, KCS will, subject to the provisions of this
Registration Rights Agreement, use commercially reasonable efforts to cause all
such Registrable Stock which such Holders shall have requested be registered to
be registered under the Securities Act, to the extent required to permit the
disposition by such Holders of the Registrable Stock so registered.
Registrations of Registrable Stock under this Section 3 shall not constitute a
registration effected pursuant to Section 2. To the extent an underwritten
public offering is the intended method of distribution of Registrable Stock
included in a registration pursuant to this Section 3, KCS shall have the right,
in its sole discretion, to select the investment banker or bankers who shall
serve as the manager and/or co-managers for all registrations of offerings of
Registrable Stock under this Section 3.
(B) Except as provided in Sections 2 and 3 hereof, KCS shall have no
obligation to register any Securities held by any Holder under the Securities
Act or under any foreign, state or other securities laws.
4. REGISTRATION PROCEDURES. Whenever KCS is required by the provisions of
this Registration Rights Agreement to use its commercially reasonable efforts to
effect the registration of any Registrable Stock under the Securities Act, KCS
will:
(A) Prepare and file (within the period required by Section 2 for all
registrations pursuant to such Section) with the Securities and Exchange
Commission a Registration Statement with respect to such Registrable Stock and
use commercially reasonable efforts to cause such Registration Statement to
become and remain continuously effective for a period necessary to effect the
sale of the Registrable Stock in accordance with the intended method of
disposition and the requirements of this Registration Rights Agreement, provided
that before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, KCS will furnish to counsel for the Holders of Registrable
Stock included in such Registration Statement copies of all such documents
proposed to be filed, which documents (other than the documents incorporated by
reference therein) will be subject to the review of such counsel.
KCS's obligations under this Section 4 shall be subject to the following:
(i) If, prior to the effectiveness of a Registration Statement
relating to Registrable Stock, KCS shall furnish to the Holders a
resolution of its Board of Directors stating that KCS has determined in its
good faith judgment that the sale of Registrable Stock by such Holders
pursuant to the Registration Statement would require disclosure of material
non-public information, the current disclosure of which would, in the sole
judgment of the Board of
Directors of KCS, be materially detrimental to KCS (an "Information
Blackout"), then KCS's obligation to file the Registration Statement and to
use its commercially reasonable efforts to have such Registration Statement
declared effective shall be deferred for a period not to exceed the earlier
of (x) the date upon which such material information is disclosed to the
public or (y) sixty (60) days after the Board of Directors of KCS makes
such good faith determination (such period being the "Information Blackout
Period").
(ii) If prior to the effectiveness of a Registration Statement
relating to Registrable Stock, KCS shall furnish to the Holders a
certificate stating that the Board of Directors of KCS has determined in
its good faith judgment that KCS is required to file financial statements
with the Securities and Exchange Commission in connection with a material
acquisition or other event (a "Financial Statement Blackout"), then KCS's
obligation to file the Registration Statement and to use its commercially
reasonable efforts to have such Registration Statement declared effective
shall be deferred for a period not to exceed the earlier of (x) the date
upon which such financial statements are filed with the Securities and
Exchange Commission (it being understood that KCS shall use its
commercially reasonable efforts to file such financial statements as soon
as practicable, or (y) sixty (60) days after KCS makes such good faith
determination (such period being the "Financial Statement Blackout
Period"). Any such determination shall be accompanied by a certificate or
letter from KCS's independent auditors to the effect that such auditors
agree that such financial statements are required to be included or
incorporated by reference in such Registration Statement to permit such
Registration Statement to become effective under the Securities Act or to
permit continued sales thereunder, as the case may be.
(iii) If a Registration Statement relating to Registrable Stock is
effective, upon written notice of an Information Blackout or Financial
Statement Blackout from KCS to the Holders, KCS may request suspension of
and the Holders shall suspend sales of Registrable Stock by Holders
pursuant to such Registration Statement for the Information Blackout Period
or the Financial Statement Blackout Period.
(iv) KCS shall use commercially reasonable efforts to ensure that the
aggregate number of days in any period of twelve consecutive months in
which an Information Blackout or Financial Statement Blackout or a deferral
pursuant to Section 2(D) is in effect shall not be more than ninety (90).
(B) Prepare and file with the Securities and Exchange Commission such
amendments and supplements to such Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective for a period necessary to effect the sale of the Registrable
Stock thereunder, which shall in no event exceed 120 days (or the period
specified in Section 2 in the case of a shelf registration) and to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Stock covered by such Registration Statement during such period in
accordance with the intended method or methods of disposition by the Sellers
thereof set forth in such Registration Statement;
(C) Furnish to each Seller such number of copies of such Registration
Statement and the exhibits thereto, each amendment and supplement thereto, the
Prospectus included in the Registration Statement (including each preliminary
Prospectus), all documents incorporated by reference or deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, and such other documents, as such Seller may reasonably request in
order to facilitate the disposition of the Registrable Stock owned by such
Seller covered by the Registration Statement in accordance with the intended
method of disposition;
(D) Use commercially reasonable efforts to register or qualify the
Registrable Stock covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions in the United States of
America as each Seller shall reasonably request, to keep such registrations or
qualifications in effect for so long as such Registration Statement remains in
effect, and do any and all other acts and things which may be necessary under
such securities or blue sky laws to enable such Seller to consummate the
disposition in such jurisdictions of the Registrable Stock owned by such Seller
covered by such Registration Statement (provided, however, that KCS will not be
required to (i) in the case of a registration pursuant to Section 3, register or
qualify such Seller's Registrable Stock in any jurisdiction where shares to be
sold by KCS or any other Person initiating such registration are not to be
registered or qualified, (ii) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (iii) subject itself to taxation in any
jurisdiction or (iv) consent to general service of process in any jurisdiction);
(E) Notify each Seller, at any time when a Prospectus relating to the
Registrable Stock of such Seller covered by such Registration Statement is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the Prospectus included in such Registration Statement, as
then in effect, contains an untrue statement of a material fact or omits to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances then existing, and at the request of any such
Seller, promptly prepare a supplement or amendment to such Prospectus so that,
as thereafter delivered to the purchasers of the Registrable Stock covered by
such Registration Statement, such Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances then
existing;
(F) Cause all Registrable Stock covered by such Registration Statement to
be listed on the principal securities exchange on which Securities of the same
class are then listed;
(G) Make available for inspection by any Seller, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by Sellers holding at least a
majority of the Registrable Stock included in such registration pursuant to the
provisions of this Registration Rights Agreement such financial and other
records, pertinent corporate documents and properties of KCS as may be
reasonably requested by such party in connection with such Registration
Statement solely for the purpose of effecting sales of Registrable Stock
included in such registration; and
(H) In connection with any underwritten offering pursuant to Section 2,
Sellers shall (i) enter into an underwriting agreement in customary form with
the underwriters participating in the offering; and (ii) provide reasonable
cooperation to the underwriters and the Holders in marketing the Registrable
Stock; provided, that not more than one KCS officer (the chief financial officer
or other appropriate officer) shall be required to participate in any "road
show" or similar presentation in connection with such offering and any such
participation shall be subject to such officer's availability, shall be at the
Holders' expense and shall be limited to offerings with an aggregate offering
price of at least $100 million.
In connection with any registration hereunder, each Seller shall furnish
KCS such information regarding such Seller, the Registrable Stock and the
intended plan of distribution thereof as KCS may from time to time reasonably
request in writing and, if any Seller does not furnish such information prior to
the filing of the Registration Statement, KCS may exclude the Registrable Stock
of such Holder from such Registration Statement.
Each Seller shall be deemed to have agreed by acquisition of the
Registrable Stock that, upon receipt of any notice from KCS of the occurrence of
any event of the kind described in Subsection (E) of this Section 4, such Seller
will forthwith discontinue its disposition of the Registrable Stock pursuant to
the Registration Statement relating thereto until Seller's receipt of the copies
of the supplemented or amended Prospectus contemplated by Subsection (E) of this
Section 4 and, if so directed by KCS, will deliver to KCS (at KCS's expense) all
copies, other than permanent file copies, then in Seller's possession of the
Prospectus relating to the Registrable Stock current at the time of receipt of
such notice.
5. EXPENSES. With respect to the first four registrations effected pursuant
to the provisions of Section 2 and registrations which include Registrable Stock
pursuant to Section 3, KCS shall pay all Registration Expenses. With respect to
any registrations effected pursuant to Section 2 beyond the first four
registrations, the Holders whose shares of Registrable Stock are included in the
applicable registration shall pay all Registration Expenses.
6. INDEMNIFICATION.
(A) In the event of a registration of any Registrable Stock pursuant to
this Registration Rights Agreement, KCS shall indemnify and hold harmless each
Seller, each underwriter (in the case of any underwritten offering) and each
person, if any, who controls such Seller or underwriter within the meaning of
the Securities Act, and each officer, director, employee and advisor of each of
the foregoing (each a "Seller Indemnitee"), against any expenses, losses,
claims, damages or liabilities, joint or several, to which such Seller
Indemnitee may become subject under the Securities Act, any state securities law
or otherwise, including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, insofar as such expenses, losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such shares are registered
under the Securities Act, any preliminary Prospectus or final Prospectus
contained therein, any summary Prospectus used in connection with any securities
being registered, or any amendment or supplement thereto; or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii) any violation
by KCS of the Securities Act or rules of the Securities and Exchange Commission
thereunder or any blue sky laws or any rules promulgated thereunder, and shall
reimburse each such Seller Indemnitee for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that KCS shall
not be liable in any such case to the extent that any such expense, loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement, said preliminary Prospectus or said Prospectus or
summary Prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished to KCS by or on behalf of the
Seller or any underwriter specifically for use in the
preparation thereof; and PROVIDED, FURTHER, that if any expenses, losses,
claims, damages or liabilities arise out of or are based upon an untrue
statement, alleged untrue statement, omission or alleged omission contained in
any preliminary Prospectus which did not appear in the final Prospectus, KCS
shall not have any liability with respect thereto to any Seller Indemnitee if
any Seller Indemnitee delivered a copy of the preliminary Prospectus to the
person alleging such expenses, losses, claims, damages or liabilities and failed
to deliver a copy of the final Prospectus as amended or supplemented if it has
been amended or supplemented, to such person at or prior to the written
confirmation of the sale to such person.
(B) In the event of a registration of any Registrable Stock pursuant to
this Registration Rights Agreement, each Holder shall, jointly and severally,
indemnify and hold harmless KCS and each person, if any, who controls KCS within
the meaning of the Securities Act, each officer of KCS who signs the
Registration Statement, each director of KCS and each underwriter and each
person who controls any underwriter within the meaning of the Securities Act
(each a "Company Indemnitee"), against any and all such expenses, losses,
claims, damages or liabilities referred to in Section 6(A) if the statement,
alleged statement, omission or alleged omission in respect of which such
expense, loss, claim, damage or liability is asserted was made in reliance upon
and in conformity with information furnished in writing to KCS by or on behalf
of a Holder of Registrable Stock specifically for use in connection with the
preparation of such registration Statement, preliminary Prospectus, Prospectus,
summary Prospectus, amendment or supplement.
(C) Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Article 6 or to the extent that
it has not been prejudiced as a proximate result of such failure. In case any
such action shall be brought against any indemnified party, and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select one separate counsel to assert
such legal defenses (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties). Upon the permitted assumption by the indemnifying party of the defense
of such action, the indemnifying party shall not be liable to such indemnified
party under this Article 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) the indemnified party shall have
employed one separate counsel (together with any local counsel) in connection
with the assertion of legal defenses in accordance with the proviso to the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time, (iii) the indemnifying party and its counsel do
not actively and vigorously pursue the defense of such action or (iv) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may participate
in any underwritten registration hereunder unless such Holder (i) agrees to sell
such Holder's Registrable Stock on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; PROVIDED, HOWEVER, that no
Holder of Registrable Stock shall be required to make any representations or
warranties or to provide information in the Registration Statement relating to
such registration except, in either case, with respect to itself and its
intended method of disposition of Registrable Stock.
8. UNDERWRITING CUT-BACKS.
(A) If
(1) any Holder of Registrable Stock is entitled and wishes to register
any Registrable Stock in a registration made pursuant to Section 2 hereof,
and
(2) the offering proposed to be made by the Holder or Holders for whom
such registration is to be made is to be an underwritten public offering,
and
(3) KCS wishes to register Securities in such registration, and
(4) the managing underwriters of such public offering furnish a
written opinion that the total amount of Securities to be included in such
offering would exceed the maximum amount of Securities (as specified in
such opinion) which can be marketed at a price reasonably related to the
then current market value of such Securities and without otherwise
materially and adversely affecting such offering,
then the relative rights to participate in such offering of the Holders of
Registrable Stock, the holders of other Securities having the right to include
such Securities in such registration, and KCS shall be in the following order of
priority:
First: The Holders of Registrable Stock shall be entitled to
participate in accordance with the number of shares of Registrable Stock
which each such Holder shall request to be registered, such participation
to be pro rata in accordance with the number of shares which each such
Holder shall request be registered if, pursuant to clause 4 of this
Subsection (A), the total amount of Securities to be included in the
offering will be less than the number of shares of Registrable Stock that
all of such Holders shall request be registered; and then
Second: KCS shall be entitled to participate; and then
Third: All holders of other Securities having the right to include
such Securities in such registration shall be entitled to participate in
accordance with the relative priorities, if any, as shall exist among them.
(B) If
(1) any Holder of Registrable Stock entitled to do so requests
registration of Registrable Stock under Section 3 hereof, and
(2) the offering proposed to be made is to be an underwritten public
offering, and
(3) the managing underwriters of such public offering furnish a
written opinion that the total amount of Securities to be included in such
offering would exceed the maximum amount of Securities (as specified in
such opinion) which can be marketed at a price reasonably related to the
then current market value of such Securities and without materially and
adversely affecting such offering,
then the relative rights to participate in such offering of the Holders of
Registrable Stock, the holders of other Securities having the right to include
such Securities in such registration, and KCS shall be in the following order of
priority:
First: KCS or the persons requesting such registration (if other than
KCS) shall be entitled to participate in accordance with the relative
priorities, if any, as shall exist among them; and then
Second: All other holders of Securities having the right to include
such Securities in such registration (including the Holders of the
Registrable Stock) shall be entitled to participate pro rata in accordance
with the number of shares requested by such holders to be included in such
registration.
9. MARKET STANDOFF. Each Holder hereby agrees that, during the 10 days
prior to, and during the period of duration (up to, but not exceeding, 90 days)
specified by KCS and an underwriter of Common Stock or Securities of KCS
convertible into Common Stock, following the effective date of a Registration
Statement (or, to the extent applicable, a Prospectus filed pursuant to Rule
424(b)) covering Common Stock or Securities of KCS convertible into Common Stock
that are being offered solely for the account of KCS, the Holder shall not, to
the extent requested by KCS and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including, short sale), enter into any put
equivalent position (as defined by Rule 16a-1), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any Registrable Stock, or in any economic interest therein, held by the
Holder at any time during such period except Registrable Stock covered by such
Registration Statement; provided, that (i) no Holder shall be subject to such
restriction to the extent that KCS or any of its officers or directors are not
subject to any such restriction and (ii) if KCS, any of its officers or
directors or any other person subject to any such restriction is released from
any such restriction then such restriction shall expire with respect to all of
the Registrable Stock held by the Holders. In order to enforce the foregoing
covenant, KCS may impose stop-transfer instructions with respect to the
Registrable Stock of each Holder until the end of such period, and each Holder
agrees that, if so requested, such Holder will execute an agreement in the form
provided by the underwriter containing terms which are essentially consistent
with the provisions of this Section 9.
10. CONFIDENTIAL INFORMATION. Each Holder of Registrable Stock agrees that
any information obtained pursuant to this Registration Rights Agreement which
is, or would reasonably be perceived to be, proprietary to KCS or otherwise
confidential will not be disclosed without the prior written consent of KCS,
unless required to be included, and until such inclusion, in any Registration
Statement being filed pursuant to this Registration Rights
Agreement. Notwithstanding the foregoing, each Holder of Registrable Stock may
disclose such information, on a need to know basis, to their employees,
accountants or attorneys (so long as each such person to whom confidential
information is disclosed agrees to keep such information confidential) or in
compliance with a court order. Each Holder of Registrable Stock further
acknowledges, understands and agrees that any confidential information will not
be utilized (a) in connection with purchases and/or sales of KCS's Securities
except in compliance with applicable state and federal antifraud statutes or (b)
for any other purpose.
11. NOTICE OF PROPOSED TRANSFERS. The Holder of each certificate
representing Registrable Stock by acceptance thereof agrees to comply in all
respects with the provisions of this Section 11. Each certificate evidencing the
Registrable Stock transferred as above provided shall bear the appropriate
restrictive legend set forth in Section 9.9 of the Stockholders' Agreement,
except that such certificate shall not bear such restrictive legend if in the
opinion of counsel for such Holder and counsel for KCS such legend is not
required in order to establish compliance with any provision of the Securities
Act.
12. SUCCESSORS AND ASSIGNS. This Registration Rights Agreement shall inure
to the benefit of and be binding upon the successors of any of the parties
hereto; PROVIDED, HOWEVER, the rights and benefits of TMM, MM and the Principal
Stockholders with respect to their ability to cause the Registrable Stock to be
covered by a Registration Statement pursuant to Section 2 and Section 3 hereof
may be assigned only to transferees who are Permitted Transferees; PROVIDED,
HOWEVER that such assignee shall be entitled to such rights and benefits only
upon becoming party to this Registration Rights Agreement as to any Registrable
Stock held by such Permitted Transferee, with all the rights and obligations of
its assignor under this Registration Rights Agreement, by delivering an executed
joinder to the other parties to this Registration Rights Agreement in a form
satisfactory to the parties thereto.
13. SEVERABILITY. Whenever possible, each provision of this Registration
Rights Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Registration Rights Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Registration Rights Agreement.
14. DESCRIPTIVE HEADINGS. The descriptive headings of this Registration
Rights Agreement are inserted for convenience only and do not constitute a part
of this Registration Rights Agreement.
15. NOTICES. All communications provided for hereunder shall be in writing
and delivered by hand, by facsimile or by a recognized overnight delivery
service to the following addresses, or such other addresses as shall be given by
notice delivered hereunder, and shall be deemed to have been received on the day
of personal delivery thereof if by hand, upon transmission if sent by facsimile
(with request of assurance of receipt in a manner customary for communication of
such type) or on the next Business Day after deposit if sent by a recognized
overnight delivery service:
If to any Holders of Registrable Stock, addressed to such Holders at their
addresses as shown on the books of KCS or its transfer agent;
With a copy (which shall not constitute notice) to:
Milbank, Tweed, Hadley & McCloy LLP
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Thomas Janson, Esq.
CT Corporation
1209 Orange Street
Wilmington, Delaware 19801
If to KCS, to:
Kansas City Southern
P.O. Box 219335
427 West 12th Street
Kansas City, MO 64121-9335
Attention: President
Fax: (816) 816-983-1297
with a copy (which shall not constitute notice ) to:
Sonnenschein Nath & Rosenthal LLP
4520 Main Street, Suite 1100
Kansas City, Missouri 64111
Attention: John Marvin, Esq.
Fax: 816-531-7545
or, as to KCS, to such other persons or at such other addresses as shall be
furnished by KCS by like notice to the other parties.
16. EFFECTIVE DATE. This Registration Rights Agreement shall become
effective on and as of the Closing Date provided for in the Acquisition
Agreement (the "Effective Date").
17. TERMINATION. All rights under this Registration Rights Agreement shall
terminate as to any Holder on the earliest to occur of (i) the date which is
five (5) years after the Effective Date hereof and (ii) at such time as such
Holder is free to sell all shares of Registrable Stock held by such Holder
pursuant to Rule 144(k) under the Securities Act or a comparable exemption from
registration that enables the Holder to sell all shares of Registrable Stock
held by such Holder without registration under the Securities Act and without
restriction as to the manner of sale. Notwithstanding the foregoing, the
provisions of Section 6 hereof and the rights and obligations thereunder shall
survive the termination of this Registration Rights Agreement.
18. COUNTERPARTS. This Registration Rights Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same document.
19. ENTIRE AGREEMENT. This Registration Rights Agreement constitutes the
entire agreement by and among the parties hereto with respect to the subject
matter hereof. There are no promises, warranties or undertakings, other than
those set forth herein, with respect to the registration rights granted by KCS
with respect to the Registrable Stock. This Registration Rights Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof; provided that, in the event of any
conflict between this Registration Rights Agreement and the Stockholders'
Agreement or the Acquisition Agreement, the provisions of those other agreements
shall control.
20. AMENDMENTS, GOVERNING LAW, JURISDICTION AND VENUE. This Registration
Rights Agreement may be amended, modified or supplemented only by a written
instrument executed by KCS and Holders of not less than a majority of the then
existing shares of Registrable Stock. Any term, covenant, agreement or condition
in this Registration Rights Agreement may be waived (either generally or in
particular instances and either retroactively or prospectively) by written
instruments signed by KCS and Holders of not less than a majority of the
existing shares of Registrable Stock. Any such waiver shall be limited to its
express terms and shall not be termed a waiver of any other term, covenant,
agreement or condition. This Registration Rights Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in that state without giving any effect to
any choice or conflict of law provision or rule (whether in the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware. Each party hereto hereby
agrees that any proceeding relating to this Registration Rights Agreement shall
be brought in a state court of New York or a federal court located in New York.
Each party hereto hereby consents to personal jurisdiction in any such action
brought in any such New York state or federal court, consents to service of
process by registered mail made upon such party and such party's agent and
waives any objection to venue in any such New York state or federal court and
any claim that any such New York state or federal court is an inconvenient
forum.
21. SERVICE OF PROCESS. Each of the parties hereto irrevocably appoints CT
Corporation (the "Process Agent"), at 111 Eighth Avenue, New York, New York
10011 (212-894-8940) as its agent and true and lawful attorney-in-fact in its
name, place and stead to accept on behalf of each of the parties and their
respective properties and revenues, service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding brought in the State of New York, and each of the parties hereto
agrees that failure of the Process Agent to give any notice of any such service
of process to any of the parties hereto shall not impair or affect the validity
of such service or the enforcement of any judgment based thereon.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Registration Rights Agreement as of the day and year first written above.
GRUPO TMM, S.A. KANSAS CITY SOUTHERN
By: /s/ Jose F. Serrano Segovia By: /s/ Michael R. Haverty
----------------------------- ----------------------------
Name: Jose F. Serrano Segovia Name: Michael R. Haverty
Title: Attorney in Fact Title: Chairman, President & CEO
By: /s/ Javier Sergovia Serrano PRINCIPAL STOCKHOLDERS
-----------------------------
Name: Javier Sergovia Serrano
Title: Attorney in Fact /s/ Jose F. Serrano Segovia
--------------------------------
TMM MULTIMODAL, S.A. de C.V. Jose F. Serrano Segovia
By: /s/ Jose F. Serrano Segovia /s/ Ramon Serrano Segovia
----------------------------- --------------------------------
Name: Jose F. Serrano Segovia Ramon Serrano Segovia
Title: Attorney in Fact
By: /s/ Javier Sergovia Serrano /s/ Terese Serrano Segovia
----------------------------- --------------------------------
Name: Javier Sergovia Serrano Teresa Serrano Segovia
Title: Attorney in Fact
SERVICIONS DIRECTIVOS SERVIA, PROMOTORA SERVIA,
S.A. DE C.V. S.A. de C.V.
By: /s/ Jose F. Serrano Segovia By: /s/ Jose F. Serrano Segovia
----------------------------- ----------------------------
Name: Jose F. Serrano Segovia Name: Jose F. Serrano Segovia
Title: Attorney in Fact Title: Attorney in Fact
By: /s/ Javier Sergovia Serrano By: /s/ Javier Sergovia Serrano
----------------------------- ----------------------------
Name: Javier Sergovia Serrano Name: Javier Sergovia Serrano
Title: Attorney in Fact Title Attorney in Fact