Exhibit 10.10
EXECUTION COPY
 
 
AMENDMENT No. 1 and WAIVER No. 1
TO THE
CREDIT AGREEMENT
dated as of April 7, 2006
among
Kansas City Southern de México, S.A. de C.V.
(formerly known as TFM, S.A. de C.V.),
as Borrower
ARRENDADORA TFM, S.A. de C.V.,
as Guarantor
CERTAIN LENDERS,
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
BBVA BANCOMER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO
FINANCIERO BBVA BANCOMER,
as the Collateral Agent
 
 

 

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     THIS AMENDMENT No. 1 AND WAIVER NO. 1 TO THE CREDIT AGREEMENT, dated as of
April 7, 2006 (this “Amendment”), is entered into among Kansas City Southern de
México, S.A. de C.V. (formerly known as TFM, S.A. de C.V., a corporation with
variable capital (sociedad anónima de capital variable) organized under the laws
of Mexico (the “Borrower”), Arrendadora TFM, S.A. de C.V., a corporation with
variable capital (sociedad anónima de capital variable) organized under the laws
of the Mexico (“Arrendadora”), each of the lenders that is a signatory hereto
under the caption “LENDERS” on the signature pages hereto and each other Person
that becomes a “Lender” after the date hereof pursuant to Section 11.8(b) of the
Credit Agreement, as defined below (each a “Lender”), Bank of America, N.A., as
the administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”), and BBVA Bancomer,
S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, as the
collateral agent for the Beneficiaries (as defined in the Credit Agreement) (in
such capacity, together with its successors in such capacity, the “Collateral
Agent”).
RECITALS
     WHEREAS, the Borrower, the Guarantor, the Lenders, the Administrative Agent
and the Collateral Agent have entered into the Credit Agreement, dated as of
October 24, 2005 (the “Credit Agreement”);
     WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth below, in accordance with Section 11.3 of the Credit Agreement, subject to
the conditions set forth herein; and
     WHEREAS, the parties hereto desire to waive certain obligations of the
Borrower under the Credit Agreement, subject to the conditions set forth herein,
     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
     SECTION 1. Certain Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.
     SECTION 2. Amendments. (a) The parties hereto hereby agree that the
definition of “Indebtedness” in Section 1.1 of the Credit Agreement shall be
deleted and the following definition shall be inserted in proper alphabetical
order:
“Indebtedness” shall mean, with respect to any Person at any date of
determination (without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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(c) all obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit, financial guaranty insurance policies or similar
instruments;
(d) all obligations of such Person for the deferred purchase price of Property
or services (other than current trade payables incurred in the ordinary course
of such Person’s business and other than the Specified Deferred Payment
Obligations);
(e) all obligations of such Person as lessee under Capitalized Leases (but not
operating leases);
(f) all Guarantees of such Person in respect of obligations of the kind referred
to in clauses (a) through (e) and (h) of this definition;
(g) all Indebtedness of other Persons secured by a Lien on any Property of such
Person, whether or not such Indebtedness is assumed by such Person; provided
that the amount of such Indebtedness shall be the lesser of (i) the fair market
value of such Property at such date of determination and (ii) the amount of such
Indebtedness; and
(h) to the extent not otherwise included in this definition, net obligations to
make payments under Swap Agreements.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; provided that, in
the case of clause (h) above, the amount of Indebtedness shall be the
mark-to-market amount of such obligations at such date.
(b) The parties hereto hereby agree to add the following definition in
Section 1.1 of the Credit Agreement which shall be inserted in proper
alphabetical order:
“Specified Deferred Payment Obligations” mean all payment obligations as in
effect as of April 1, 2006 with respect to: (a) the locomotive maintenance
agreements with each of Alstom Transporte, S.A. de C.V. and GETS Locomotive
Services, S.A. de C.V., and (b) a track maintenance rehabilitation agreement
with Alstom Transporte, S.A. de C.V. that accrue and are recorded on the
Borrower’s balance sheet. Such payment obligations are set forth on Schedule I
to the Amendment No. 1 and Waiver No. 1 to the Credit Agreement dated as of
April 7, 2006 among Kansas City Southern de México, S.A. de C.V., Arrendadora
TFM, S.A. de C.V., each of the lenders that is a signatory thereto, Bank of
America, N.A., as the administrative agent and BBVA Bancomer, S.A., Institución
de Banca Múltiple, Grupo Financiero BBVA Bancomer, as the collateral agent.
(c) The parties hereto hereby agree to eliminate the minimum and the multiple
borrowing thresholds of the Tranche A2 Loans that the Borrower may request on a
Borrowing Date under Section 2.1(b)(i), such that such Tranche A2 Loans may be
borrowed in any amount.
(d) The parties hereto hereby agree that Section 6.2(b) of the Credit Agreement
shall be deleted and substituted with the following:
“(b) as soon as available, and in any case within 45 days of the end of each of
the first three fiscal quarters of each year, beginning with the fiscal quarter
ending on September 30, 2005, the unaudited consolidated financial statements of
the Borrower and
Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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its Consolidated Subsidiaries in respect of such fiscal quarter prepared in
accordance with GAAP, consistently applied (except as otherwise discussed in the
notes to such financial statements), which financial statements shall present
fairly in accordance with GAAP (subject to absence of footnotes), the financial
condition of the Borrower and its Consolidated Subsidiaries as at the end of the
relevant fiscal quarter of each fiscal year and the results of the operations of
the Borrower and its Consolidated Subsidiaries for such fiscal quarter; provided
that for so long as the Borrower files a Form 10-Q with the Securities and
Exchange Commission, the furnishing by the Borrower to the Administrative Agent
of such Form 10-Q for each fiscal quarter of the Borrower shall satisfy the
Borrower’s obligation to provide the financial statements contemplated in this
clause (b); ”
     SECTION 3. Waiver. (a) The parties hereto hereby waive the reporting
requirements in Section 6.2(a) of the Credit Agreement, requiring that the
Borrower shall deliver to the Administrative Agent the information contained
therein within 90 days of the end of each fiscal year with respect to fiscal
year 2005, provided that such reports shall be delivered to the Administrative
Agent by April 30, 2006.
     (b) The parties hereto hereby waive the reporting requirements in
Section 6.2(b) of the Credit Agreement, requiring that the Borrower shall
deliver to the Administrative Agent within 45 days of the end of the last fiscal
quarter of 2005 the reports contained therein.
     (c) The parties hereto hereby waive the reporting requirements in
Section 6.2(c) of the Credit Agreement, requiring that the Borrower shall
deliver to the Administrative Agent updated financial projections of the
Borrower for the three year period commencing on January 1, 2006 by March 31,
2006, provided that such projections shall be delivered to the Administrative
Agent no later than April 30, 2006.
     (d) The parties hereto hereby waive the requirement in Section 6.2(d) of
the Credit Agreement with respect to the delivery of a certificate of a
Responsible Officer of the Borrower concurrently with the delivery of the
financial statements pursuant to Section 6.2(a) and (b) with respect to the end
of fiscal year 2005, provided that such certificate shall be delivered to the
Administrative Agent no later than April 30, 2006.
     (e) The parties hereto hereby waive compliance with the obligations of
Section 7.1(c) of the Credit Agreement for the four quarters ending December 31,
2005 if compliance therewith was calculated without giving effect to the
amendment to the definition of “Indebtedness” set forth in Section 2(a) above,
provided that the Borrower is in compliance therewith after giving effect to
such amendment.
     SECTION 4. Representations and Warranties. Each of the Borrower and each
Guarantor represents and warrants to the Administrative Agent, the Collateral
Agent and the Lender that:
     (a) The representations and warranties made in the Credit Agreement are (or
after giving effect hereto will be) true and correct as if made on the date
hereof.
     (b) The execution and delivery by each of the Borrower and the Guarantor of
this Amendment and the performance by it of its obligations hereunder (i) are
within its corporate
Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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powers, (ii) have been duly authorized by all necessary corporate action and
(iii) do not and will not contravene or conflict with any provision of (A) its
organizational documents, (B) any Applicable Law, decree, judgment, award,
injunction or similar legal restriction in effect, except to the extent that any
contravention thereof is not reasonably likely to have a Material Adverse Effect
or (C) any document or other contractual restriction binding upon or affecting
it or any of its Properties, except to the extent that any contravention thereof
is not reasonably likely to have a Material Adverse Effect.
     SECTION 5. Effect of Amendment. All provisions of the Credit Agreement,
except as expressly amended and modified by this Amendment, shall remain in full
force and effect. After this Amendment becomes effective, all references in any
Loan Document (or any other document) referring to the Credit Agreement shall be
deemed to be references to the Credit Agreement as amended by this Amendment.
This Amendment shall not be deemed to expressly or impliedly waive, amend or
supplement any provision of the Credit Agreement other than as expressly set
forth herein.
     SECTION 6. Effectiveness. This Amendment shall become effective on the date
when the Administrative Agent shall have received counterparts of this Amendment
duly executed and delivered by each of the Borrower, the Guarantor, each Agent
and the Majority Lenders and the following documents, each in form and substance
satisfactory to the Administrative Agent:

  (a)   certified copies of the Organizational Documents of the Borrower and the
Guarantor (unless such Organizational Documents have not been modified since the
Effective Date (other than the modification to the Borrower’s Organizational
Documents to change the name of TFM, S.A. de C.V. to Kansas City Southern de
México, S.A. de C.V., which was effective on December 2, 2005), as certified by
an authorized officer of the Borrower or the Guarantor, as applicable), and    
(b)   if required by Applicable Law, documents (including appropriate
resolutions of its shareholders or the Board of Directors or similar body)
evidencing due authorization of the execution, delivery and performance by it of
this Amendment by the Borrower and the Guarantor, or a certification from an
authorized officer of the Borrower and the Guarantor if such documents are not
required by Applicable Law.

     SECTION 7. Governing Law. THIS AMENDMENT THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S
CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
     SECTION 8. Counterparts. This Amendment may be executed on any number of
separate counterparts (including by fax or electronic delivery), and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
     SECTION 9. Section Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment (or the Credit Agreement).
Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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     SECTION 10. Loan Document. The parties hereto hereby acknowledge and agree
that this Amendment shall constitute a Loan Document for all purposes of the
Credit Agreement and the other Loan Documents.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the day and year first above written.

            KANSAS CITY SOUTHERN DE MÉXICO, S.A. DE C.V.,
as Borrower
      By:           Name:           Title:      

            By:           Name:           Title:      

            ARRENDADORA TFM, S.A. DE C.V.,
as Guarantor
      By:           Name:           Title:      

            By:           Name:           Title:      

Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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            BANK OF AMERICA, N.A.,
as Administrative Agent
      By:           Name:           Title:      

Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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            BBVA BANCOMER, S.A., INSTITUCIÓN DE
BANCA MÚLTIPLE, GRUPO
FINANCIERO BBVA BANCOMER,
as Collateral Agent
      By:           Name:           Title:        

Amendment No. 1 and Waiver
No. 1 to the Credit Agreement

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Schedule I
Payment Schedule for Service Agreement Indebtedness
(Amounts in millions)
Rehabilitation and track maintenance on Line N
Alstom Transporte S.A. De C.V.

         
2006
  $ 2.5  
2007
    2.4  
2008
    2.2  
2009
    2.1  
2010
    1.9  
2011
    1.8  
2012
    1.0    
 
     
 
  $ 13.9  
 
     

Locomotive and maintenance agreements
Alstom Transporte S.A. De C.V. and
GETS Locomotive Services S.A. de C.V.

                              Alstom   GETS   Total
2006
  $ 4.5     $ 3.8     $ 8.3  
2007
    4.6       3.9       8.5  
2008
    4.8       1.7       6.5  
2009
    2.0       0.4       2.3          
 
  $ 15.9     $ 9.8     $ 25.6        

Schedule I to the Amendment
No. 1 and Waiver No. 1 to the
Credit Agreement