Exhibit 4.1
THE KANSAS CITY SOUTHERN RAILWAY COMPANY
8.0% Senior Notes due 2015
UNDERWRITING AGREEMENT
May 27, 2008
May 27, 2008
To the Managers named in Schedule I hereto
for the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The Kansas City Southern Railway Company , a Missouri corporation (the
"Company") and wholly owned subsidiary of Kansas City Southern, a Delaware
corporation (the "Parent"), proposes to issue and sell to the several
underwriters named in Schedule II hereto (the "Underwriters"), for whom you are
acting as managers (the "Managers"), the principal amount of its debt securities
identified in Schedule I hereto (the "Securities"), to be issued under the
indenture specified in Schedule I hereto (the "Indenture") among the Company,
the Parent, the entities named in Schedule III hereto as guarantors
(collectively, and together with the Parent, the "Guarantors") and the Trustee
identified in Schedule I hereto (the "Trustee"). If the firm or firms listed in
Schedule II hereto include only the Managers listed in Schedule I hereto, then
the terms "Underwriters" and "Managers" as used herein shall each be deemed to
refer to such firm or firms.
The Parent has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, (the file number
of which is set forth in Schedule I hereto) on Form S-3, relating to securities
(the "Shelf Securities"), including the Securities, to be issued from time to
time by the Parent or the Company. The registration statement as amended to the
date of this Agreement, including the information (if any) deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 430B under the Securities Act of 1933, as amended (the "Securities Act"),
is hereinafter referred to as the "Registration Statement," and the related
prospectus covering the Shelf Securities dated May 23, 2008 in the form first
used to confirm sales of the Securities (or in the form first made available to
the Underwriters by the Company to meet requests of purchasers pursuant to Rule
173 under the Securities Act) is hereinafter referred to as the "Basic
Prospectus." The Basic Prospectus, as supplemented by the prospectus supplement
specifically relating to the Securities in the form first used to confirm sales
of the Securities (or in the form first made available to the Underwriters by
the Company to meet requests of purchasers pursuant to Rule 173 under the
Securities Act) is hereinafter referred to as the "Prospectus," and the term
"preliminary prospectus" means any preliminary form of the Prospectus. For
purposes of this Agreement, "free writing prospectus" has the meaning set forth
in Rule 405 under the Securities Act, "Time of Sale Prospectus" means the
preliminary prospectus together with the free writing prospectuses, if any, each
identified in Schedule I hereto, and "broadly available road show" means a "bona
fide electronic road show" as defined in Rule 433(h)(5) under the Securities Act
that has been made available without restriction to any person. As used herein,
the
terms "Registration Statement," "Basic Prospectus," "preliminary prospectus,"
"Time of Sale Prospectus" and "Prospectus" shall include the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment," and
"amend" as used herein with respect to the Registration Statement, the Basic
Prospectus, the Time of Sale Prospectus, any preliminary prospectus or free
writing prospectus shall include all documents subsequently filed by or on
behalf of the Parent or the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
deemed to be incorporated by reference therein.
1. Representations and Warranties. Each of the Company and the Guarantors
represents and warrants to and agrees with each of the Underwriters that, as of
the date hereof and as of the Closing Date (as defined in Section 4):
(a) The Registration Statement is an automatic shelf registration statement
as defined in Rule 405 under the Securities Act and the Parent is a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) eligible to
use the Registration Statement as an automatic shelf registration statement and
neither the Company nor the Guarantors has received notice that the Commission
objects to the use of the Registration Statement as an automatic shelf
registration statement. No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose are
pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement as of the
date hereof does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iv) the Registration Statement and the
Prospectus comply, and as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (v) the Time of Sale Prospectus does
not, and at the time of each sale of the Securities in connection with the
offering when the Prospectus is not yet available to prospective purchasers and
at the Closing Date, the Time of Sale Prospectus, as then amended or
supplemented by the Company, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, (vi) each broadly available road show, if
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any, when considered together with the Time of Sale Prospectus, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (vii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to (A) statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Managers expressly for use therein or (B) that part
of the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of the Trustee.
(c) The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule I hereto, and electronic road shows, if any, each
furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, not to be unreasonably
withheld, prepare, use or refer to, any free writing prospectus.
(d) Each of the Parent and the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own,
lease and operate its property and to conduct its business as described in the
Time of Sale Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company, the Guarantors and their respective
subsidiaries, taken as a whole.
(e) Each subsidiary of the Company and the Guarantors has been duly
organized, is validly existing and in good standing (to the extent applicable)
under
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the laws of the jurisdiction of its organization, has the power and authority to
own, lease and operate its property and to conduct its business as described in
the Time of Sale Prospectus and is duly qualified to transact business and is in
good standing (to the extent applicable) in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing (to the extent applicable) would not have a material adverse
effect on the Company, the Guarantors and their respective subsidiaries, taken
as a whole; all of the issued shares of capital stock of each corporate
subsidiary of the Company and the Guarantors held by the Company or such
Guarantors, as applicable, have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by the
Company or Guarantor, as applicable, free and clear of all liens, encumbrances,
equities or claims.
(f) This Agreement has been duly authorized, executed and delivered by the
Company.
(g) The authorized capital stock and capitalization of the Company conforms
as to legal matters to the description thereof contained in the Time of Sale
Prospectus.
(h) The Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized by the Company and each Guarantor and, when executed
and delivered by the Company, the Guarantors and the Trustee, will be a valid
and binding obligation of the Company and the Guarantors, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and equitable principles of
general applicability.
(i) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company and the
Guarantors, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and equitable principles of general applicability, and will be entitled to the
benefits of the Indenture.
(j) The execution and delivery by the Company and the Guarantors of, and
the performance by the Company and the Guarantors of their respective
obligations under, this Agreement, the Indenture and the Securities, and the
consummation of the transactions contemplated therein have been duly authorized
by the Company and the Guarantors; the Company and the Guarantors have all power
and authority to execute, deliver and perform their respective obligations under
this Agreement, the Indenture and the Securities; and the execution,
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delivery and performance by the Company and the Guarantors of their respective
obligations under this Agreement, the Indenture and the Securities will not (i)
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or the Guarantors or any agreement or other instrument
binding upon the Company or the Guarantors or any of their subsidiaries that are
material to the Company, the Guarantors and their subsidiaries, taken as a
whole, (ii) result in an event or condition which gives the holder of any notes,
debenture, or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company, the Guarantors or any of
their subsidiaries, or (iii) contravene, conflict with or constitute a breach
of, or default under any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, the Guarantors or any of
their subsidiaries and their respective operations, except to the extent that
such contravention, violation, breach or default described in items (i) or (iii)
above would not have a material adverse effect on the Company, the Guarantors
and their subsidiaries, taken as a whole.
(k) No consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the Company
or the Guarantors of their respective obligations under this Agreement, the
Indenture or the Securities, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of the
Securities.
(l) The Company, the Guarantors and each of their subsidiaries own, possess
or has obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate their properties and to carry on their business as conducted as
of the date hereof and as described in the Time of Sale Prospectus, except to
the extent that the failure to own, possess or obtain such licenses, permits,
certificates, consents, orders, approvals and other authorizations would not
have a material adverse effect on the Company, the Guarantors and their
subsidiaries, taken as a whole; and neither the Company, the Guarantors nor any
of their subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization.
(m) The historical audited consolidated financial statements and notes of
the Parent included or incorporated by reference in the Time of Sale Prospectus
(i) have been prepared in accordance with U.S. generally accepted accounting
principles ("U.S. GAAP"), (ii) present fairly in all material respects the
financial
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condition, results of operations and cash flows of the Company, the Guarantors
and each of their subsidiaries taken as a whole, and (iii) comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act. No other financial statements are required to be included in the
Time of Sale Prospectus.
(n) The Company, the Guarantors and each of their subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) all transactions are recorded as
necessary to permit preparation of financial statements in U.S. GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(o) The Company, the Guarantors and each of their subsidiaries has filed
all tax returns (foreign, national, local or other) required to be filed and has
paid all taxes required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith.
(p) There has not occurred any material adverse change, or to the Company's
knowledge, any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company, the Guarantors and their subsidiaries, taken as a
whole, from that set forth in the Time of Sale Prospectus.
(q) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company, the Guarantors or any of
their subsidiaries is a party or to which any of the properties of the Company,
the Guarantors or any of their subsidiaries is subject (i) other than
proceedings that are accurately described in all material respects in the Time
of Sale Prospectus and proceedings that would not have a material adverse effect
on the Company, the Guarantors and their subsidiaries, taken as a whole, or on
the power or ability of the Company or the Guarantors to perform their
obligations under this Agreement, the Indenture or the Securities or to
consummate the transactions contemplated by the Time of Sale Prospectus or (ii)
that are required to be described in the Registration Statement or the
Prospectus and are not so described; and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
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(r) Each preliminary prospectus filed as part of the Registration Statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(s) None of the Company or any of the Guarantors is, and after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus none of the Company or any of
the Guarantors will be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(t) The Company, the Guarantors and their subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except, in each case, where
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company, the Guarantors and their
subsidiaries, taken as a whole.
(u) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company, the Guarantors and
their subsidiaries, taken as a whole.
(v) No material labor problem or dispute with the employees of the Company,
the Guarantors or any of their subsidiaries exists or, to the knowledge of the
Company, the Guarantors or any of their subsidiaries, is threatened or, to the
knowledge of the Company or the Guarantors, is imminent, and to the knowledge of
the Company, the Guarantors and any of their affiliates there is no existing or
imminent labor disturbance by the employees of any of their respective principal
suppliers, contractors or customers.
(w) The Company, the Guarantors and each of their subsidiaries is insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary for companies engaged in the
same
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or similar businesses; all such policies covering any of their business, assets,
employees, officers and directors are in full force and effect; the Company, the
Guarantors and each of their subsidiaries is in compliance with the terms of
such policies and instruments in all material respects, and there are no claims
by the Company, the Guarantors or any of their subsidiaries under any such
policy or instrument as to which any insurance company is denying liability of
defending under a reservation of rights clause; and neither the Company, the
Guarantors nor any of their subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue in their businesses.
(x) No relationship, direct or indirect, exists between the Company, the
Guarantors or any of their subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company, the Guarantors or
any of their subsidiaries on the other hand, which is required by the Securities
Act to be described in the Time of Sale Prospectus which is not so described.
(y) Neither the Company, the Guarantors nor any of their subsidiaries or
affiliates, nor any director, officer, or employee, nor, to the knowledge of the
Company or the Guarantors, any agent or representative of the Company, the
Guarantors or of any of their subsidiaries or affiliates, has taken or will take
any action in furtherance of an offer, payment, promise to pay, or authorization
or approval of the payment or giving of money, property, gifts or anything else
of value, directly or indirectly, to any "government official" (including any
officer or employee of a government or government-owned or controlled entity or
of a public international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political party or
party official or candidate for political office) to influence official action
or secure an improper advantage; and the Company, the Guarantors and their
subsidiaries and affiliates have conducted their businesses in compliance with
applicable anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote and achieve
compliance with such laws and with the representation and warranty contained
herein.
(z) The operations of the Company, the Guarantors and their domestic
subsidiaries are and have been conducted at all times in material compliance
with all applicable financial recordkeeping and reporting requirements,
including those of the Bank Secrecy Act, as amended by Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable
anti-money laundering statutes of jurisdictions where the Company, the
Guarantors and their subsidiaries conduct business, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
"Anti-Money
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Laundering Laws"), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company,
the Guarantors or any of their subsidiaries with respect to the Anti-Money
Laundering Laws is pending or, to the best knowledge of the Company or the
Guarantors, threatened.
(aa) (i) The Parent represents that neither it nor any of its domestic
subsidiaries (collectively, the "Entity") or, to the knowledge of the Entity,
any director, officer, employee, agent, affiliate or representative of the
Entity, is an individual or entity ("Person") that is, or is owned or controlled
by a Person that is:
(A) the subject of any sanctions administered or enforced by the
U.S. Department of Treasury's Office of Foreign Assets Control
("OFAC") or other relevant sanctions authority (collectively,
"Sanctions"), nor
(B) located, organized or resident in a country or territory that
is the subject of Sanctions (including, without limitation,
Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria).
(ii) The Entity represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other Person:
(A) to fund or facilitate any activities or business of or with
any Person or in any country or territory that, at the time of such
funding or facilitation, is the subject of Sanctions; or
(B) in any other manner that will result in a violation of
Sanctions by any Person (including any Person participating in the
offering, whether as underwriter, advisor, investor or otherwise).
(iii) The Entity represents and covenants that it has not knowingly
engaged in, and will not engage in, any dealings or transactions with any
Person, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.
(bb) The Parent is subject to and is reporting in accordance with the
requirements of Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and all documents incorporated in the Time
of Sale Prospectus comply in all material respects as to form with the
applicable requirements of the Exchange Act.
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(cc) The statements in the Time of Sale Prospectus under the headings
"Capitalization," "Description of the Notes" and "Certain United States Federal
Income Tax Considerations" fairly summarize the matters described therein.
(dd) There is and has been no failure on the part of the Parent and to the
best of the Parent's knowledge, after due inquiry, any of the Parent's directors
or officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Xxxxxxxx-Xxxxx Act") applicable to the Parent, the
Company or the Guarantors as of the date hereof.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth in Schedule II
hereto opposite its name at the purchase price set forth in Schedule I hereto.
The Company hereby agrees that, without the written consent of the
Managers, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date (as defined below), offer, sell,
contract to sell or otherwise dispose of any debt of the Company or warrants to
purchase debt of the Company substantially similar to the Securities (other than
(a) the sale of the Securities under this Agreement and (b) the repurchase of
the Company's 9 1/2% Senior Notes due 2008).
3. Public Offering. The Company is advised by you that the Underwriters
propose to make a public offering of their respective portions of the Securities
as soon after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. The Company is further advised by
you that the Securities are to be offered to the public upon the terms set forth
in the Time of Sale Prospectus.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City on the
closing date and time set forth in Schedule I hereto, or at such other time on
the same or such other date, not later than the fifth business day thereafter,
as may be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for the Securities shall be made against delivery to you on the
Closing Date for the respective accounts of the several Underwriters of the
Securities registered in such names and in such denominations as you shall
request in writing not later than one full business day prior to the Closing
Date,
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with any transfer taxes payable in connection with the transfer of the
Securities to the Underwriters duly paid.
5. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and on or
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Company, any Guarantor or any
of the securities of the Company or the Guarantors or any of their
subsidiaries or in the rating outlook for the Company or any Guarantor by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or, to the Company's
knowledge, any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company, the Guarantors and their subsidiaries, taken as
a whole, from that set forth in the Time of Sale Prospectus as of the date
of this Agreement that, in your judgment, is material and adverse and that
makes it, in your reasonable judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Time of Sale
Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 5(a)(i) above and to the effect that the
representations and warranties of the Company and the Guarantors contained in
this Agreement are true and correct as of the Closing Date and that the Company
has complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP, outside counsel for the Company, dated the
Closing Date in form and substance satisfactory to the Managers. Such opinion
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
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(d) The Underwriters shall have received on the Closing Date an opinion of
Shearman & Sterling LLP, counsel for the Underwriters, dated the Closing Date in
form and substance satisfactory to the Managers.
(e) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from KPMG
LLP, independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement, the Time of Sale Prospectus and the
Prospectus; provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
6. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) To furnish to you, without charge, a signed copy of the Registration
Statement (including exhibits thereto and documents incorporated by reference
therein) and to deliver to each of the Underwriters during the period mentioned
in Section 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus,
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement in
connection with the offering of the Securities, the Time of Sale Prospectus or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to use or file any such proposed amendment or supplement to
which you reasonably object.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company with respect
to the offering of the Securities and not to use or refer to any proposed free
writing prospectus to which you reasonably object.
(d) Not to take any action that would result in an Underwriter, the Parent
or the Company being required to file with the Commission pursuant to Rule
433(d) under the Securities Act a free writing prospectus prepared by or on
behalf of the Underwriter that the Underwriter otherwise would not have been
required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy
the Securities at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is
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necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the reasonable opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus
to comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that
the statements in the Time of Sale Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Time of Sale Prospectus is
delivered to a prospective purchaser, be misleading or so that the Time of Sale
Prospectus, as amended or supplemented, will no longer conflict with the
Registration Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of
the Securities as in the reasonable opinion of counsel for the Underwriters the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the
Securities Act) is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the Prospectus
(or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act)
is delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Securities may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to in
Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with applicable
law.
(g) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(h) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement covering a period of at least
twelve months beginning with the first fiscal quarter of the Company occurring
after the date of this Agreement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
13
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated (other than by breach hereof by
you), to pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Securities under the Securities Act
and all other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf
of, used by, or referred to by the Company and amendments and supplements to any
of the foregoing, including the filing fees payable to the Commission relating
to the Securities (within the time required by Rule 456 (b)(1), if applicable),
all printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of
the Securities to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Securities
under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 6(g) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Securities by the Financial Industry
Regulatory Authority, Inc., (v) any fees charged by the rating agencies for the
rating of the Securities, (vi) the cost of the preparation, issuance and
delivery of the Securities, (vii) the costs and charges of any trustee, transfer
agent, registrar or depositary, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the
road show, (ix) the document production charges and expenses associated with
printing this Agreement and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution," and
the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, transfer
taxes payable on resale of any of the
14
Securities by them and any advertising expenses connected with any offers they
may make.
(j) If the third anniversary of the initial effective date of the
Registration Statement occurs before all the Securities have been sold by the
Underwriters, prior to the third anniversary to file or cause to be filed a new
shelf registration statement and to take any other action necessary to permit
the public offering of the Securities to continue without interruption;
references herein to the Registration Statement shall include the new
registration statement declared effective by the Commission.
(k) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company or warrants to purchase or
otherwise acquire debt securities of the Company substantially similar to the
Securities (other than (i) the Securities, (ii) commercial paper issued in the
ordinary course of business, (iii) the repurchase of the Company's 9 1/2% Senior
Notes due 2008, or (iv) securities or warrants permitted with the prior written
consent of the Manager identified in Schedule I with the authorization to
release this lock-up on behalf of the Underwriters).
(l) To prepare a final term sheet relating to the offering of the
Securities, containing only information that describes the final terms of the
Securities or the offering in a form consented to by the Managers, and to file
such final term sheet within the period required by Rule 433(d)(5)(ii) under the
Securities Act following the date the final terms have been established for the
offering of the Securities.
7. Covenants of the Underwriters. Each Underwriter severally covenants with
the Company not to take any action that would result in the Parent or the
Company being required to file or cause to be filed with the Commission under
Rule 433(d) a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed or cause to be
filed by the Parent or the Company thereunder, but for the action of the
Underwriter.
8. Indemnity and Contribution. The Company agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer
free
15
writing prospectus as defined in Rule 433(h) under the Securities Act, any
Company information that the Company has filed, caused to be filed or is
required to file, pursuant to Rule 433(d) under the Securities Act or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any issuer free writing prospectus or the Prospectus or any amendment or
supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager authorized to appoint counsel under this
Section set forth in Schedule I hereto, in the case of
16
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters bear to the aggregate initial public offering price
of the Securities as set forth in the Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material
17
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amounts of Securities they have purchased hereunder, and
not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 88 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter, any person controlling any Underwriter or
any affiliate of any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
9. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter
18
market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any moratorium
on commercial banking activities shall have been declared by Federal or New York
State authorities or there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your reasonable judgment, is material and adverse and which, singly or
together with any other event specified in this clause (v), makes it, in your
reasonable judgment, impracticable to proceed with the offer, sale or delivery
of the Securities on the terms and in the manner contemplated in the Time of
Sale Prospectus or the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule II bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 10 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement, in the Time of
Sale Prospectus, in the Prospectus or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
19
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Securities,
represents the entire agreement between the Company and the Underwriters with
respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the offering, and the purchase and
sale of the Securities.
(b) The Company acknowledges that in connection with the offering of the
Securities: (i) the Underwriters have acted at arms length, are not agents of,
and owe no fiduciary duties to, the Company or any other person, (ii) the
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the
Securities.
12. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
15. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you at the address set forth in Schedule I hereto; and if to the Company
shall be delivered, mailed or sent to the address set forth in Schedule I
hereto.
20
Very truly yours,
THE KANSAS CITY SOUTHERN RAILWAY COMPANY
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-------------------------------------------
Name:
Title:
SCHEDULE I
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Managers:
Manager authorized to release lock-up Xxxxxx Xxxxxxx & Co. Incorporated
under Section 2:
Manager authorized to appoint counsel Xxxxxx Xxxxxxx & Co. Incorporated
under Section 8(c):
Indenture: Indenture to be dated as of the Closing Date
among the Company, the Guarantors and the
Trustee
Trustee: U.S. Bank National Association
Registration Statement File No.: 333-130112
Time of Sale Prospectus 1. Prospectus dated May 23, 2008 relating
to the Securities,
2. the Preliminary Prospectus Supplement
dated May 27, 2008 relating to the
Securities, and
3. The free writing prospectus attached
hereto as Schedule IV, to be filed by
the Parent under Rule 433(d) of the
Securities Act.
Securities to be purchased: 8.0% Senior Notes due 2015
Aggregate Principal Amount: $275,000,000
Purchase Price: 98.000% of the principal amount of the
Securities, plus accrued interest, if any, from
May 30, 2008
I-1
Maturity: June 1, 2015
Interest Rate: 8.0% per annum, accruing from May 30, 2008
Interest Payment Dates: June 1 and December 1 commencing December 1,
2008
Closing Date and Time: May 30, 2008 10:00 a.m.
Closing Location: Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices to Underwriters: Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Banc of America Securities LLC
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Address for Notices to the Company: The Kansas City Southern Railway Company
c/o Kansas City Southern
P.O. Box 219335
Xxxxxx Xxxx, XX 00000 64121-9335
Telecopy No.: 000-000-0000
Attention: Senior Vice President-Finance and
Treasurer
I-2
SCHEDULE II
Principal Amount of
Underwriter Securities To Be Purchased
--------------------------------------------------------------------- --------------------------
Xxxxxx Xxxxxxx & Co. Incorporated.................................... $ 165,000,000
Banc of America Securities LLC....................................... 96,250,000
Scotia Capital (USA) Inc............................................. 8,250,000
BMO Capital Markets Corp............................................. 5,500,000
-------------
Total....................................................... $ 275,000,000
=============
II-1
Schedule III
Note Guarantors
Kansas City Southern;
Gateway Eastern Railway Company;
PABTEX GP, LLC;
PABTEX I, L.P.;
SIS Bulk Holding, Inc.;
Southern Development Company;
Southern Industrial Services, Inc.; and
Trans-Serve, Inc.
III-1
Schedule IV
Issuer Free Writing Prospectus
Issued May 27, 2008
The Kansas City Southern Railway Company
$275,000,000 8.0% SENIOR NOTES DUE 2015
-------------------------
The following information supplements the Preliminary Prospectus Supplement of
The Kansas City Southern Railway Company ("KCSR"), dated May 27, 2008, filed as
part of Registration Statement Number 333-130112 in relation to the 8.0% Senior
Notes due 2015.
Title of Securities: 8.0% Senior Notes due June 1, 2015 (the "Notes")
Aggregate Principal
Amount Offered: $275,000,000
Maturity: June 1, 2015
Price to Public: 100% per Note and accrued interest, if any
Net Proceeds to KCSR $269,500,000
after Expenses:
Underwriting Discount: 2.0%
Interest Rate: 8.0%
Interest Payment Dates: June 1 and December 1 of each year, beginning on
December 1, 2008
Record Dates: May 15 and November 15
Optional KCSR may redeem some or all of the notes prior
to June 1, 2012 by paying either 101% of the
principal amount of the Notes or a "make whole"
premium, whichever is greater, plus, in each
case, accrued and unpaid interest, if any as set
forth i the prospectus supplement.
KCSR may also redeem the Notes, in whole or in
part, at any time on or after June 1, 2012. The
redemption price for the Notes (expressed as a
percentage of principal amount) will be as
follows, plus accrued and unpaid interest to the
redemption date, if redeemed during the 12-month
period commencing on June 1 of any year set
forth below:
IV-1
Year Redemption Price
------------------------------------------------
2012................................... 104.000%
2013................................... 102.000%
2014 and thereafter.................... 100.000%
In addition, at any time prior to June 1, 2011,
KCSR may, on one or more occasions, redeem up to
35% of the aggregate principal amount of the
Notes with net cash proceeds from specified
equity offerings at the redemption price of
108.000% of the principal amount thereof, plus
accrued and unpaid interest, if any.
Trade Date: May 27, 2008
Settlement May 30, 2008
Date:
CUSIP: 485188 AG1
Underwriter Principal Amount
------------------------------ -----------------
Xxxxxx Xxxxxxx & Co. Incorporated $165,000,000
Banc of America Securities LLC $ 96,250,000
Scotia Capital (USA) Inc. $ 8,250,000
BMO Capital Markets Corp. $ 5,500,000
IV-2
