VAT NOTE
US $40,000,000 New York, New York
Effective as of , 2005
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WHEREAS, Kansas City Southern, a Delaware corporation ("Obligor") as
contemplated by the Amended and Restated Acquisition Agreement among Obligor, MM
(defined below), and the other parties named therein dated December 15, 2004
(the "Acquisition Agreement"), promises to pay to the order of TMM Multimodal,
S.A. de C.V., a SOCIEDAD ANONIMA DE CAPITAL VARIABLE organized under the laws of
the United Mexican States ("MM"), an unsecured promissory debt obligation in the
principal amount of Forty Million U.S. Dollars (US $40,000,000) (this "Note");
WHEREAS, Xxxxxxx and MM each desire to evidence such debt obligation with
the issuance of this Note upon the terms and conditions set forth herein; and
WHEREAS, capitalized terms used but not defined herein shall have the
meaning assigned to them in the Acquisition Agreement.
NOW, THEREFORE, in consideration of the recitals (which are deemed to be a
part of this Note) and agreements contained herein, the parties hereto agree as
follows:
I. PROMISE TO PAY. For value received and subject to reduction pursuant to
Section II below, Obligor hereby promises to pay to the order of MM in the
manner set forth in Section III below, on the date that is five (5) years
following the date hereof or upon such earlier date following the date that is
two (2) years following the date hereof as may be determined by KCS in its sole
discretion (the "Payment Date"), the principal sum of Forty Million U.S. Dollars
(USD $40,000,000).
II. REDUCTION OF PRINCIPAL AMOUNT. The principal amount of this Note shall
be subject to reduction in accordance with the terms and conditions of the VAT
Escrow Agreement dated as of the date hereof, by and among by and among Obligor,
Kara Sub, Inc., KCS Investment I, Ltd., KCS Acquisition Subsidiary, Inc., Caymex
Transportation, Inc., Grupo MM, S.A., MM Holdings, S.A. de C.V., MM Multimodal,
S.A. de C.V. and the Escrow Agent named therein (the "VAT Escrow Agreement").
III. PAYMENT, CONVERSION INTO SHARES. On the Payment Date, this Note shall
automatically be converted into the right to receive that number of shares of
KCS Common Stock as, valued at the Volume Weighted Price, shall equal the
remaining principal amount of this Note as of the Payment Date.
IV. INTEREST RATE/PAYMENT. This Note shall bear no interest.
V. PREPAYMENT. Obligor shall have the right to prepay the indebtedness
evidenced by this Note, in whole or in part, without premium or penalty, upon
not less than thirty (30) days notice to the holder thereof.
VI. ASSIGNMENT. MM's rights under this Note may not be negotiated or
assigned.
VII. OBLIGATIONS OF OTHERS. Obligor's obligations under this Note will also
be binding on Xxxxxxx's successors and assigns and shall only be assigned,
transferred or otherwise conveyed to a person or entity that consents in writing
to be so bound.
VIII. WAIVER; GOVERNING LAW. Obligor hereby waives notice presentment for
payment, demand, notice of dishonor and protest of this Note, and further agrees
that this Note shall be deemed to have been made under and shall be governed by
the laws of the State of Delaware without giving effect to the choice of law
principles of that state, in all respects, including matters of construction,
validity and performance, and that none of its terms or provisions may be
waived, altered, modified or amended except as may be consented to in a duly
signed writing by MM.
VIII. CANCELLATION OF NOTE. This Note shall be automatically cancelled upon
the delivery by Obligor of the shares of KCS Common Stock in accordance with
Section 5(b) of the VAT Escrow Agreement.
IN WITNESS WHEREOF, Xxxxxxx has executed and delivered this Note as of the
date first above written.
Kansas City Southern
By:
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Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and General
Counsel
