EXHIBIT 10.28
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as
January 11, 2000, among KANSAS CITY SOUTHERN INDUSTRIES, INC., a
Delaware corporation ("Holdings"), THE KANSAS CITY SOUTHERN
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RAILWAY COMPANY, a Missouri Corporation (the "Borrower"), each
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other Subsidiary of Holdings listed on Schedule I hereto or
becoming a party hereto as provided in Section 12 hereof (each
individually, a "Subsidiary Guarantor" and, collectively,
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together with Holdings and the Borrower, the "Guarantors") and
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THE CHASE MANHATTAN BANK ("Chase"), as collateral agent (the
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"Collateral Agent") for the Secured Parties (as defined in the
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Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of January 11, 2000
(as amended, supplemented or otherwise modified from time to time, the "Credit
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Agreement"), among Holdings, the Borrower, the lenders from time to time party
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thereto (the "Lenders") and Chase, as administrative agent (in such capacity,
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the "Administrative Agent"), collateral agent (in such capacity, the "Collateral
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Agent") and issuing bank (in such capacity, the "Issuing Bank"), and (b) the
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Guarantee Agreement and the other Loan Documents referred to in the Credit
Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing Bank
has agreed to issue Letters of Credit for the accounts of the Borrower, pursuant
to and upon the terms and subject to the conditions specified in the Credit
Agreement. The Guarantors have guaranteed such Loans and the other Obligations
(as defined in the Guarantee Agreement) of the Borrower under the Credit
Agreement pursuant to the Guarantee Agreement; certain Guarantors have granted
Liens on and security interests in certain of their assets to secure such
guarantees. The obligations of the Lenders to make Loans are conditioned on,
among other things, the execution and delivery by the Borrower and the
Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral Agent agree as
follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
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indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), Holdings and the Borrower agree that (a) in the event a
payment shall be made by any Subsidiary Guarantor under the Guarantee Agreement,
Holdings and the Borrower shall jointly and severally indemnify such Subsidiary
Guarantor for the full amount of any such payment and such Subsidiary Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Subsidiary Guarantor shall be sold pursuant to any Security Document to satisfy
a claim of any Secured Party, Holdings and the Borrower shall jointly and
severally indemnify such Subsidiary
Guarantor in an amount equal to the greater of the book value or the fair market
value of the assets so sold in respect of Obligations.
SECTION 2. Contribution and Subrogation. Each Subsidiary Guarantor (a
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"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
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payment shall be made by any other Subsidiary Guarantor under the Guarantee
Agreement or assets of any other Subsidiary Guarantor shall be sold pursuant to
any Security Document to satisfy a claim of any Secured Party and such other
Subsidiary Guarantor (the "Claiming Guarantor") shall not have been fully
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indemnified by Holdings and the Borrower as provided in Section 1, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment or the greater of the book value or the fair
market value of such assets, as the case may be, in each case multiplied by a
fraction of which the numerator shall be the net worth of the Contributing
Guarantor on the date hereof and the denominator shall be the aggregate net
worth of all the Contributing Guarantors on the date hereof (or, in the case of
any Subsidiary Guarantor becoming a party hereto pursuant to Section 12, the
date of the Supplement hereto executed and delivered by such Subsidiary
Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 2 shall be subrogated to the rights of such
Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this Agreement
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to the contrary, all rights of the Subsidiary Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of all Obligations which are then due and payable whether at maturity,
by acceleration or otherwise. No failure on the part of Holdings, the Borrower
or any Subsidiary Guarantor to make the payments required by Sections 1 and 2
(or any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor with respect to
its obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full force
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and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the LC Exposure has not been
reduced to zero or any of the Commitments under the Credit Agreement have not
been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Guarantor
upon the bankruptcy or reorganization of the Borrower, any Guarantor or
otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
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Collateral Agent or any Guarantor to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by the
Collateral Agent or any Guarantor preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. None of
the Collateral Agent and the
Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between
Holdings, the Guarantors and the Collateral Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be in
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writing and given as provided in the Credit Agreement and addressed as specified
therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement any
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of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the parties that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
Neither Holdings nor any Guarantor may assign or transfer any of its rights or
obligations hereunder (and any such attempted assignment or transfer shall be
void) without the prior written consent of the Required Lenders.
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such Guarantee
Agreement and the Credit Agreement, such Guarantor will cease to have any rights
or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
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agreements made by Holdings and each Guarantor herein and in the certificates or
other instruments prepared or delivered in connection with this Agreement or the
other Loan Documents shall be considered to have been relied upon by the
Collateral Agent, the other Secured Parties and each Guarantor and shall survive
the making by the Lenders of the Loans and the issuance of the Letters of Credit
by the Issuing Bank and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loans or any other fee or amount
payable under the Credit Agreement or this Agreement or under any of the other
Loan Documents is outstanding and unpaid or the L/C Exposure does not equal zero
and as long as the Commitments have not been terminated.
(b) In case any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed in counterparts
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(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall be effective with respect to any
Guarantor when a counterpart bearing the signature of such Guarantor shall have
been delivered to the Collateral Agent. Delivery of an executed signature page
to this Agreement by facsimile transmission shall be as effective as delivery of
a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation
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specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 12. Additional Guarantors. Certain additional Subsidiaries may be
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required from time to time, under the terms of the Credit Agreement, to enter
into the Guarantee Agreement as a Guarantor. Upon execution and delivery, after
the date hereof, by the Collateral Agent and such a Subsidiary of an instrument
in the form of Annex 1 hereto, such Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor
hereunder. The execution and delivery of any instrument adding an additional
Guarantor as a party to this Agreement shall not require the consent of any
Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
THE CHASE MANHATTAN BANK, as
Collateral Agent,
By /s/ Xxxxxx X. Xxxxxx
____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
KANSAS CITY SOUTHERN INDUSTRIES,
INC.
By /s/ Xxxxxxx X. Xxxxxxxx
____________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: VP and Corporate
Secretary
THE KANSAS CITY SOUTHERN RAILWAY
COMPANY,
By Xxxxxxx X. Xxxxxxxx
____________________________
Name: /s/ Xxxxxxx X. Xxxxxxxx
Title: Designated Person
CAYMEX TRANSPORATION, INC.,
by /s/ Xxxxxxx X. XxXxxxxx
____________________________
Name: Xxxxxxx X. XxXxxxxx
Title: Designated Person
GATEWAY EASTERN RAILWAY
COMPANY,
by /s/ Xxxxxxx X. Xxxxxxxx
____________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President &
Secretary
GATEWAY WESTERN RAILWAY
COMPANY,
by /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: VP & Secretary
GLOBAL TERMINALING SERVICES, INC.
by /s/ Xxxxxxx X. XxXxxxxx
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Name: Xxxxxxx X. XxXxxxx
Title: Designated Person
KCS TRANSPORTATION COMPANY,
by /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: VP & Secretary
KANSAS CITY SOUTHERN LINES, INC.,
by /s/ Xxxxxxx X. XxXxxxxx
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Name: Xxxxxxx X. XxXxxxxx
Title: Designated Person
SCC HOLDINGS, INC.,
by /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: VP & Treasurer
MID-SOUTH MICROWAVE, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: VP & Secretary
XXXX-XXXXXX CORPORATION,
by /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: VP & Treasurer
SOUTHERN DEVELOPMENT COMPANY,
by /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: VP & Treasurer
SOUTHERN INDUSTRIAL SERVICES,
INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: VP & Secretary
TRANS-SERVE, INC.,
by /s/ Xxxxxxx X. XxXxxxxx
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Name: Xxxxxxx X. XxXxxxxx
Title: Designated Person
XXXXX, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: VP & Secretary
Annex 1 to the
Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the Indemnity,
Subrogation and Contribution Agreement dated as January 11, 2000,
among KANSAS CITY SOUTHERN INDUSTRIES, INC., a Delaware
corporation ("Holdings"), THER KANSAS CITY SOUTHERN RAILWAY
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COMPANY, a Missouri Corporation (the "Borrower"), each Subsidiary
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of Holdings listed on Schedule I thereto or becoming a party
thereto as provided in Section 12 thereof (each individually, a
"Subsidiary Guarantor" and, collectively, together with Holdings
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and the Borrower, the "Guarantors") and THE CHASE MANHATTAN BANK
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("Chase"), as collateral agent (the "Collateral Agent") for the
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Secured Parties (as defined in the Credit Agreement referred to
below).
A. Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
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party thereto (the "Lenders"), and Chase, as administrative agent (in such
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capacity, the "Administrative Agent"), collateral agent (in such capacity, the
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"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
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(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement. The rules of construction set forth in Section 1.03 of the
Credit Agreement shall apply equally to this Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.
C. Holdings and the Subsidiary Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Certain additional
Subsidiaries may be required from time to time, under the terms of the Credit
Agreement, to enter into the Guarantee Agreement as a Guarantor upon becoming a
Subsidiary Loan Party. Section 12 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries may become
Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Guarantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Indemnity, Subrogation and Contribution Agreement in order to induce
the Lenders to make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation and
Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor. The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together,
bear the signatures of the New Guarantor and the Collateral Agent. Delivery of
an executed signature page to this Supplement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-
faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly
executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[NAME OF NEW GUARANTOR],
By_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
By_______________________________
Name:
Title:
Schedule I to Supplement No. [ ]
to the Indemnity, Subrogation and
Contribution Agreement
GUARANTORS
Name Address
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