AMENDMENT NO. 2 TO TRANSACTION AGREEMENT
EXHIBIT 10.2
AMENDMENT NO. 2 TO
TRANSACTION AGREEMENT
TRANSACTION AGREEMENT
THIS AMENDMENT NO. 2 TO TRANSACTION AGREEMENT (this “Amendment”), is made and entered
into as of May 1, 2006, by and among KANSAS CITY SOUTHERN, a Delaware corporation (“KCS”),
THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation (“KCSR”), NORFOLK SOUTHERN
CORPORATION, a Virginia corporation (“NS”), and THE ALABAMA GREAT SOUTHERN RAILROAD
COMPANY, an Alabama corporation and Subsidiary of NS (“AGS”), with reference to the
following facts:
A. KCS, KCSR, NS and AGS are parties to that certain Transaction Agreement entered into as of
December 1, 2005, as amended by Amendment No. 1 thereto, dated as of January 17, 2006 (the
“Transaction Agreement”), pursuant to the terms of which the parties thereto have agreed to
form a joint venture for purposes of owning and operating certain Assets.
B. Pursuant to Section 14.4 of the Transaction Agreement, the Transaction Agreement may be amended
by a written agreement executed by all of the parties thereto.
C. The parties have determined that it is in the best interest of all parties that the Transaction
Agreement and certain exhibits and annexes thereto be amended as set forth herein.
NOW, THEREFORE, with reference to the foregoing facts and in consideration of the mutual
agreements and understanding set forth herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Defined Terms.
Capitalized terms used herein but not otherwise defined herein shall have the meaning assigned to
such terms in the Transaction Agreement.
2. Amendments.
2.1 Clause D of the Preamble to the Transaction Agreement is hereby amended and restated in
its entirety as follows:
| “In connection with the transactions contemplated by this Agreement and the Company Agreement, at the Closing, the parties will enter into, or will cause the Company or their respective Affiliates to enter into, as applicable: (i) an Operating Agreement substantially in the form attached hereto as Exhibit B (the “Operating Agreement”), (ii) an NSR Joint Use Agreement substantially in the form attached hereto as Exhibit C (the “NSR Joint Use Agreement”), (iii) a KCSR Joint Use Agreement substantially in the form attached hereto as Exhibit D (the “KCSR Joint Use Agreement”), (iv) a Western Haulage Agreement substantially in the form attached hereto as Exhibit E, (v) a KCSR Master Interchange Agreement substantially in the form attached hereto as Exhibit F, (vi) a Unified Assignment and Assumption Agreement substantially in the form attached |
| hereto as Exhibit G, (vii) the Vicksburg Assignment Agreement (as defined in Section 3.1(b)), (viii) the Xxxxxxx Assignment Agreement (as defined in Section 3.1(c)), (ix) one or more Notes (as defined in Section 4), (x) the Omnibus Xxxx of Sale attached hereto as Exhibit H, (xi) the Unified Liability Agreement attached hereto as Exhibit I, (xii) the Dallas Terminal Marketing Agreement attached hereto as Exhibit J, (xiii) NSR – KCSR Haulage Agreement (as defined in Section 3.1(c)), (xiv) the Access Agreement (as defined in Section 10.2(c)), (xv) the one or more Tower Licenses substantially in the form attached hereto as Exhibit U and (xvi) the Master Locomotive Agreements attached hereto as Exhibit V (collectively, the “Ancillary Agreements”).” |
2.2 The definition of “KCSR Borrowing Capacity” contained in Section 1.1 of the Transaction
Agreement is hereby amended by replacing the reference to “$300,000,000” contained therein with
“$170,000,0000.”
2.3 The definition of “KCS Credit Agreement” contained in Section 1.1 of the Transaction
Agreement is hereby amended by amending and restating such definition in its entirety to read as
follows:
"KCS Credit Agreement” shall mean the Amended and Restated Credit Agreement, dated as of April
28, 2006, among KCSR, KCS, the Subsidiary Guarantors (as defined therein), the Lenders (as defined
therein), the Issuing Bank (as defined therein), the Swing Line Bank (as defined therein), and The
Bank of Nova Scotia, as collateral and administrative agent, as may be amended, restated, replaced,
supplemented, refinanced or otherwise modified from time to time.”
2.4 The definition of “Officer Certificate’s” contained in Section 1.1 of the Transaction
Agreement is hereby amended by amending and restating such definition in its entirety to read as
follows:
"Officer’s Certificate” shall have the meaning given to that term in Section 2.1(a);
provided, that when delivered pursuant to Section 2.1(b) it shall be as of the applicable
Anniversary Date.”
2.5 The parties hereby acknowledge that, notwithstanding anything in Section 2.1(a) or Section
3.1(a) to the contrary, as of the Closing the NS Interest shall be 10% (subject to adjustment
pursuant to Section 2.1(b)) and the KCS Interest shall be 90% (subject to adjustment pursuant to
Section 2.1(b)).
2.6 Section 3.1(e) of the Transaction Agreement is hereby amended by amending and restating
such section in its entirety to read as follows:
“The parties hereto acknowledge that some of the Owned Properties may include adjoining land,
buildings, structures and other improvements that are not included in the Assets and that, to the
extent that is the case, must be subdivided into separate lots. In such event, KCS shall promptly,
and at KCS’ sole expense, take all steps necessary (including, without limitation, recording all
required deeds, performing all required surveys and obtaining all necessary planning and zoning
approvals) to subdivide and obtain a separate tax lot/parcel for the portion
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of each such Owned Property that is included in the Assets, distinct from any adjoining land,
buildings, structures or other improvements that are not included in the Assets.”
2.7 Section 4 of the Transaction Agreement is hereby amended by amending and restating such
section in its entirety to read as follows:
“Promptly following the Closing, KCS and NS shall cause the Company to loan to KCS an amount
not to exceed the Excess Proceeds and thereafter to KCS and NS from time to time upon such party’s
request up to an amount equal to the Excess Capital less the aggregate amount of any outstanding
loans made pursuant to this Section 4 (such loans, the “Partner Financing”) to be evidenced by one
or more notes substantially in the form attached hereto as Exhibit N (collectively, the “Notes”);
provided, however, that in no event shall (i) the aggregate amount of Partner
Financing outstanding to KCS at any one time exceed $170,000,000 and (ii) the Company shall not
provide any Partner Financing to KCS unless the Administrative Agent (as such term is defined in
the KCS Credit Agreement) shall have approved in writing the terms of such loan as set forth in the
Form of Note attached hereto as Exhibit N. All such Partner Financing shall first be made
available to KCS and, if KCS elects not to borrow such amounts, subsequently to NS and shall in
each case be structured so as to not violate, in the reasonable opinion of counsel to KCS, any
provision of the Indentures or the KCS Credit Agreement.”
2.8 Section 8 of the Transaction Agreement is hereby amended by adding the following text to
the end of such section:
“8.16 KCS Credit Agreement. As of the Closing Date, (i) the “Effective Date” under
the KCS Credit Agreement has occurred, (ii) the Company is not a “Subsidiary” or a “Subsidiary
Guarantor” for purposes thereof and (iii) the book value of the Assets is not more than
$170,000,000.”
2.9 Section 10.5 of the Transaction Agreement is hereby amended by adding the following text
to the end of such section:
“From and after the Closing, in the event it is discovered that any Lien (other than Permitted
Liens or Liens arising after the Closing and resulting from the Company’s operation of its
business) exists on any of the Assets, without prejudice to any rights or remedies which NS may
have hereunder or under any of the Ancillary Agreements and without impact on any representation,
warranty, covenant or obligation of KCS hereunder, KCS shall secure the release of such Lien and
make the filings reasonably necessary to evidence such release as promptly as practicable. From
and after the Closing, upon and after such time as (a) the Line or any portion thereof shall
permanently cease to be subject to the Line Option, (b) the Line Option has expired, as to any
portion of the Line, pursuant to the terms and conditions as set forth in Section 10.10 of the
Transaction Agreement, or (c) the Terminal or any portion thereof shall permanently cease to be
subject to the option set forth in the Dallas Terminal Marketing Agreement, in each case, in
accordance with the terms thereof, NS shall, upon the written request of KCS and within thirty (30)
days of its receipt of such notice, reasonably cooperate with KCS to make such filings, including
but not limited to executing a satisfactory release in recordable form, as may be reasonably
necessary to evidence such cessation or expiration.”
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2.10 Section 11.2(g) of the Transaction Agreement is hereby deleted in its entirety.
2.11 The cover page to Annex A to the Transaction Agreement, the cover page to Appendix A to
Exhibit B to the Transaction Agreement (Operating Agreement), the cover page to Appendix A to
Exhibit F to the Transaction Agreement (Master Interchange Agreement) and the cover page to Exhibit
A to Exhibit O to the Transaction Agreement (Temporary Access Agreement) are hereby amended by
amending and restating such pages in their entirety to read as set forth on Exhibit A attached
hereto.
2.12 Exhibit A to the Transaction Agreement (Form of Company Agreement) is hereby amended by
amending and restating such Exhibit in its entirety to read as set forth on Exhibit B attached
hereto.
2.13 The parties hereto acknowledge and agree that any payment by the Company for the reasons
set forth in Section 2.4 of the Company Agreement shall not be taken into consideration in the
calculation of the assumed operating ratio set forth in Section 7(a) of the Operating Agreement.
2.14 Pages 7, 8, 9, 10, 11A, 16, 17A and 20 of the “slic maps” attached as part of Annex A to
the Transaction Agreement, as part of Appendix A to Exhibit B to the Transaction Agreement
(Operating Agreement), as part of to Appendix A to Exhibit F to the Transaction Agreement (Master
Interchange Agreement) and as part of Exhibit A to Exhibit O to the Transaction Agreement
(Temporary Access Agreement) are hereby amended by amending and restating such pages 7, 8, 9, 10,
11A, 16, 17A and 20 in their entirety to read as set forth on Exhibit C attached hereto.
2.15 The Transaction Agreement is hereby amended by inserting the schedule of communications
equipment included in the Assets attached hereto as Exhibit D as a new Annex D thereto.
2.16 Exhibit E to the Transaction Agreement (the Western Haulage Agreement) is hereby amended
by amending and restating such Exhibit in its entirety to read as set forth on Exhibit E attached
hereto.
2.17 Exhibit L to the Transaction Agreement (the Xxxxxxx Assignment Agreement) is hereby
amended by amending and restating such Exhibit in its entirety to read as set forth on Exhibit F
attached hereto.
2.18 Exhibit N to the Transaction Agreement (Form of Promissory Note) is hereby amended by
amending and restating such Exhibit in its entirety to read as set forth on Exhibit G attached
hereto.
2.19 Exhibit S to the Transaction Agreement (NS Legal Opinion) is hereby amended by amending
and restating such Exhibit in its entirety to read as set forth on Exhibit H attached hereto.
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2.20 The Transaction Agreement is hereby amended by inserting the form of Tower License
attached as Exhibit I to this Amendment as a new Exhibit U thereto.
2.21 The Transaction Agreement is hereby amended by inserting the form of Master Locomotive
Agreement attached as Exhibit J to this Amendment as a new Exhibit V thereto.
2.22 Schedule 3.1(d) to the Transaction Agreement and Exhibit A to the form of Unified
Assignment and Assumption Agreement (attached as Exhibit G to the Transaction Agreement) are each
hereby amended by adding the following additional agreements to the list of agreements to be
assigned to the Company at Closing (except with respect the licenses referenced in clause (f) below
which shall be assigned as soon as practicable after the Closing upon receipt of the consent of the
applicable Governmental Authority or other regulatory body): (a) Right of Way Lease made and
entered into March 23, 1989, by and between the Board of Trustees of the Vicksburg Warrant School
District and The Kansas City Southern Railway Corporation (as successor in interest by merger with
MidSouth Rail Corporation); (b) Railroad Industrial Lease Contract dated January 11, 1988, by and
between Xxxxx County Board of Education and The Kansas City Southern Railway Corporation (as
successor in interest by merger with MidSouth Rail Corporation); (c) Commercial Lease Contract of
Sixteenth Section Lands dated April 24, 1990, by and between Xxxxxx County Board of Education and
The Kansas City Southern Railway Corporation (as successor in interest by merger with MidSouth Rail
Corporation); (d) the Corridor Agreement dated June 22, 2004 by and between The Kansas City
Southern Railway Company and the Mississippi Transportation Commission solely with respect to those
projects described on Exhibit A thereto along the Line; (e) the Corridor Agreement dated June 22,
2004 by and between The Kansas City Southern Railway Company and the Louisiana Department of
Transportation solely with respect to those projects described on Exhibit A thereto along the Line;
and (f) licenses for the frequencies used for train operations on the Line, including, but not
limited to (i) dispatch of the Vicksburg sub district using AAR 86 and AAR 60 (161.400MHz and
161.010MHz), (ii) dispatch of the Meridian sub district using AAR 97 and AAR 29 (161.565MHz and
160.545MHz), (iii) EOT repeaters using AAR 404 and AAR 415 (452.9375MHz and 457.9375MHz) and (iv)
data radio using ATCS channel pair # 5 (936.9375MHz and 897.9375MHz).
3. Limitation of Amendments.
The amendments set forth in Section 2 above are effective for the purposes set forth herein and
will be limited precisely as written and will not be deemed to (a) be a consent to any amendment,
waiver or modification of any other term or condition of the Transaction Agreement, (b) otherwise
prejudice any right or remedy that any party to the Transaction Agreement may now have or may have
in the future under or on in connection with the Transaction Agreement, or (c) be a consent to any
future amendment, waiver or modification of any other term or condition of the Transaction
Agreement.
4. Entire Agreement.
This Amendment, together with the Transaction Agreement, the Company Agreement, the Ancillary
Agreements and the Confidentiality Agreement, in each case including any attached
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exhibits and schedules, contain the sole and entire agreement and understanding of the parties with
respect to the entire subject matter contained herein and therein, and any and all prior
discussions, negotiations, commitments and understandings, whether oral or otherwise, related to
the subject matter contained herein and therein are hereby merged herein and therein. Nothing in
this amendment, express or implied, is intended to confer upon any Person other than the parties
hereto any rights or remedies under or by way of this Amendment.
5. Assignment.
No party may assign its rights or obligations under this Amendment, and any attempted or purported
assignment or any delegation of any party’s duties or obligations arising under this Amendment to
any third party or entity shall be deemed to be null and void, and shall constitute a material
breach by such party of its duties and obligations under this Amendment; provided that NS may
assign its rights to any wholly-owned Subsidiary of NS.
6. Governing Law.
THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION OF
ITS TERMS AND THE INTERPRETATION OF THE RIGHTS AND DUTIES ARISING HEREUNDER.
7. Severability.
Whenever possible each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision of this Amendment shall be or become
prohibited or invalid under applicable Law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Amendment.
8. Captions.
The various captions of this Amendment are for reference only and shall not be considered or
referred to in resolving questions of interpretation of this Amendment.
9. Counterparts.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same instrument.
10. Judicial Interpretation.
Should any provision of this Amendment require judicial interpretation, it is agreed that a court
or other tribunal, as described in Section 14.13 of the Transaction Agreement, interpreting or
construing the same shall not apply a presumption that the terms hereof shall be more strictly
construed against any Person by reason of the rule of construction that a document is to be
construed more strictly against the Person who itself or through its agent prepared the same, it
being agreed that all parties have participated in the preparation of this Amendment.
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11. Dispute Resolution.
Each of the parties hereto stipulates and agrees that the dispute resolution procedures set forth
in Section 14.13 of the Transaction Agreement shall apply to any dispute, controversy or claim
arising out of or relating to this Amendment or the breach, termination or validity thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to Transaction Agreement as
of the date first above written.
| KANSAS CITY SOUTHERN | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: Xxxxx X. Xxxxxxxx | ||||
| Title: Senior Vice President and Assistant to the Chairman | ||||
| THE KANSAS CITY SOUTHERN RAILWAY COMPANY | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: Senior Vice President and General Counsel | ||||
| NORFOLK SOUTHERN CORPORATION | ||||
| By: | /s/ Xxxxxxx X. XxXxxxx | |||
| Name: Xxxxxxx X. XxXxxxx | ||||
| Title: Executive Vice President Planning and Chief Information Officer |
||||
| THE ALABAMA GREAT SOUTHERN RAILROAD COMPANY | ||||
| By: | /s/ Xxxxxxx X. XxXxxxx | |||
| Name: Xxxxxxx X. XxXxxxx | ||||
| Title: Vice President | ||||
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EXHIBIT A
COVER PAGE TO ANNEX A OF TRANSACTION AGREEMENT / COVER PAGE TO
ANNEX A TO EXHIBIT B TO THE TRANSACTION AGREEMENT (OPERATING
AGREEMENT)
ANNEX A TO EXHIBIT B TO THE TRANSACTION AGREEMENT (OPERATING
AGREEMENT)
General Guidelines — Asset Identification
KCSR / NSR Joint Venture
KCSR / NSR Joint Venture
KCS will contribute the following assets to the Joint Venture subject to the following
restrictions:
The single main line track highlighted in “green” on the attached SLIC charts, extending between
Meridian, MS., at Milepost 0.0, and Shreveport, LA., at Milepost V — 169.85, and on the attached
track charts the right of way extending from the center point of the track to the prevailing right
of way line for that location on either side of the track, including locations highlighted in
“blue” that are beyond the prevailing right of way line.
Sidings connected to and adjacent to the single main line track that are within the prevailing
right of way line on either side of the track and whose primary use is to meet and pass trains will
be included. Sidings can generally be identified on the Track Charts by the Control Point (CP)
designation at each end of the siding. They may also be identified by their SLIC number, and are
highlighted in “green” on the SLIC Charts)
All KCS owned tracks including but not limited to yard (see additional explanation below), branch
line, industrial lead, intermodal or strip, interchange, mechanical, car repair or rip, and storage
tracks; and all industry and privately owned tracks or leased branch lines that connect to the
single main line are excluded. The Joint Venture will be responsible for maintaining to the
clearance point any switches connecting such tracks to the single main line track. The attached
SLIC charts and the MCS Track Identification Table below will be used to determine the status of
each track along the route.
Where the single main line track runs through a yard only the single main line track will be
included (Highlighted in “green” on the attached SLIC charts). Through yards the right of way line
for the single main line track will be defined as the imaginary line running between the clearance
points of switches connecting to the single main line track.
MCS Track Identification Table |
|||
1 – 199
|
Yard tracks | ||
200 – 299
|
Intermodal / Strip tracks | ||
300 – 399
|
Interchange tracks | ||
400 – 499
|
Mechanical / Rip tracks | ||
500 – 599
|
Main line / Main tracks | ||
600 – 699
|
Sidings | ||
700 – 799
|
Industry tracks | |
800 – 899
|
Storage tracks |
The communications equipment included in the Assets to be contributed by KCS to the Company
pursuant to the terms and conditions hereof is set forth in Annex D hereto.
EXHIBIT B
FORM OF COMPANY AGREEMENT
[See Attached]
EXHIBIT C
REVISED SLIC MAP PAGES 7, 8, 9, 10, 11A, 16, 17A AND 20
EXHIBIT D
ANNEX D TO TRANSACTION AGREEMENT
The following communications sites in their entirety, including property (whether or not on the
right-of-way), tower, equipment shelter, dispatch radios, data radios, EOT repeaters, antenna
systems, and appurtenances:
Arcadia, LA
Ruston, LA
Xxxxxxx, LA
Bee Bayou, LA
Tallulah, LA
Mt. Alban, XX
Xxxxxx, MS
Pelahatchie, MS
Forest, MS
Ruston, LA
Xxxxxxx, LA
Bee Bayou, LA
Tallulah, LA
Mt. Alban, XX
Xxxxxx, MS
Pelahatchie, MS
Forest, MS
Equipment at the following sites as designated below:
KCS general office in Shreveport, LA: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
KCS communications site in Ringgold, LA: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
KCS yard in Minden, LA: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
Data radio Base Communications Package and antenna system necessary
for dispatching and operation of traffic along the Line |
||||
EOT repeater and antenna system necessary for dispatching and
operation of traffic along the Line |
||||
Ouachita River bridge in Monroe, LA: |
||||
Local railroad radio and antenna necessary for dispatching and
operation of traffic along the Line |
||||
Marine radio and antenna necessary for dispatching and operation of traffic along
the Line |
||||
KCS yard in Monroe, LA: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
Data radio Base Communications Package and antenna system necessary
for dispatching and operation of traffic along the Line |
||||
EOT repeater and antenna system necessary for dispatching and
operation of traffic along the Line |
||||
KCS High Oak office in Xxxxxxx (Pearl), MS: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
Data radio Base Communications Package and antenna system necessary
for dispatching and operation of traffic along the Line |
||||
KCS yard in Xxxxxx, MS: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
Data radio Base Communications Package and antenna system necessary
for dispatching and operation of traffic along the Line |
||||
KCS TV Hill communications site in Meridian, MS: |
||||
Dispatch radio base and antenna system necessary for dispatching and operation of
traffic along the Line |
||||
Data radio Base Communications Package and antenna system necessary
for dispatching and operation of traffic along the Line |
||||
EXHIBIT E
FORM OF WESTERN HAULAGE AGREEMENT
[See attached]
EXHIBIT F
FORM OF XXXXXXX ASSIGNMENT AGREEMENT
[See attached]
EXHIBIT G
FORM OF PROMISSORY NOTE
[See attached]
EXHIBIT H
FORM OF NS LEGAL OPINION
[See attached]
EXHIBIT I
FORM OF TOWER LICENSE
[See attached]
EXHIBIT J
FORM OF MASTER LOCOMOTIVE AGREEMENT
[See attached]
