exv10w50



 









Exhibit 10.50




EXECUTION COPY




THE BANK OF NOVA SCOTIA



600 Peachtree Street, N.E.



Suite 2700



Atlanta, Georgia 30308




March 17, 2006




The Kansas City Southern Railway Company

427 West 12th Street

Kansas City, Missouri 64105

Attention: Paul J. Weyandt



Ladies and Gentlemen:




          You have advised The Bank of Nova Scotia (“Scotia”) regarding the desire of The Kansas City
Southern Railway Company, a Missouri corporation (the “Borrower”), to amend and restate its
existing $250 million Credit Agreement dated as of March 30, 2004 (as amended by (i) Amendment and
Waiver No. 1 to the Credit Agreement and Amendment No. 1 to the Security Agreement, dated as of
December 22, 2004, (ii) Amendment and Waiver No. 2 to the Credit Agreement, dated as of September
30, 2005, (iii) Amendment No. 3 to the Credit Agreement, dated as of November 4, 2005, (iv) Waiver
No. 3 to the Credit Agreement, dated as of December 8, 2005, and (v) Waiver No. 4 to the Credit
Agreement, dated as of March 1, 2006, and as may be further amended or otherwise modified from time
to time, the “Existing Credit Facility”). In order to amend and restate the Existing Credit
Facility (the “Restatement”) in its entirety, you have requested that Scotia (a) provide you with
its financing commitment for the entire $371.2 million of Senior Bank Financing (as hereinafter
defined) described in this letter and in the summary of certain terms and conditions attached
hereto as Exhibit A (the “Summary of Terms” and, together with this letter, this “Commitment
Letter”) and (b) provide you with its best efforts undertaking to arrange a syndicate (in such
capacity, the “Lead Arranger”) of Lenders (as defined under the section “Lenders” in the Summary of
Terms) for the Senior Bank Financing.




          We understand that the funding required to effect the Restatement, to pay the fees and
expenses incurred in connection therewith and to provide for the ongoing working capital and
general corporate needs of the Borrower (as defined in the Summary of Terms) and its subsidiaries
shall be provided from the incurrence by the Borrower of the Senior Bank Financing.




          We further understand that the senior secured bank financing (the “Senior Bank Financing”)
will be in the form of (i) a term loan facility in the amount of $246.2 million (the “Term Loan B
Facility”), and (ii) a revolving credit facility in the amount of $125 million (the “Revolving
Credit Facility”, together with the Term Loan B Facility, the “Credit Facilities”).




          Scotia is pleased to commit to provide, subject to and upon the terms and conditions set forth
herein and in the Summary of Terms, the entire amount of (i) the Revolving Credit Facility and (ii)
the Term Loan B Facility, in each case, on the terms and conditions set forth herein and in the
Summary of Terms. It is understood that (i) Scotia shall act as sole lead arranger and sole
bookrunner for the Senior Bank Financing (the “Lead Arranger”) and (ii) Scotia will act as
administrative agent for the Senior Bank
Financing. It is further understood that the Lead Arranger shall be permitted to designate
(after



THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Commitment Letter



 









 








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consultation with and agreement of the Borrower, such agreement not to be unreasonably
withheld) one or more Lenders as agents or co-agents, as the case may be, with respect to the
Senior Bank Financing, and that no titles may be given, or compensation paid, to Lenders without
the Lead Arranger’s consent.




          The Lead Arranger reserves the right, prior to or after execution of the definitive credit
documentation for the Senior Banking Financing, to syndicate all or part of its commitments for the
Senior Bank Financing to one or more lending institutions of which you shall approve, such approval
not to be unreasonably withheld, that will become parties to such definitive credit documentation
pursuant to a syndication to be managed by the Lead Arranger, and the commitments of the Lead
Arranger hereunder shall be reduced as and when commitments are received from the Lenders as
described in the immediately preceding paragraph. The Lead Arranger shall commence syndication
efforts promptly after the execution of this Commitment Letter by you and you agree actively to
assist the Lead Arranger in achieving a syndication that is satisfactory to the Lead Arranger. To
assist the Lead Arranger in its syndication efforts, you hereby agree (a) to provide and cause your
advisors to provide the Lead Arranger and the other syndicate members upon request with all
information reasonably deemed necessary by the Lead Arranger to complete syndication, including but
not limited to information and evaluations prepared by you and your advisors or on your behalf
relating to the transactions contemplated hereby, (b) to assist the Lead Arranger upon request in
the preparation of an Information Memorandum to be used in connection with the syndication of the
Senior Bank Financing, (c) to use your commercially reasonable efforts to ensure that the
syndication efforts of the Lead Arranger benefit materially from your existing lending
relationships, (d) to make available your senior officers, representatives and advisors, in each
case from time to time, and to attend and make presentations regarding the business and prospects
of the Borrower at a meeting or meetings of lenders or prospective lenders and (e) to make
available your senior officers and representatives in connection with discussions with the rating
agencies; subject, in each case, to the agreement of the Lead Arranger and the other syndicate
members and their advisors to keep all non-public information confidential as more fully set forth
below. In addition, you agree that no financing for the Borrower or any of its respective
subsidiaries or affiliates shall be syndicated, privately placed or publicly offered to the extent
that such financing could have an adverse effect on the syndication of the Senior Bank Financing.




          Those matters that are not covered or made clear herein or in the attached Summary of Terms
are subject to mutual agreement of the parties. The terms and conditions of this commitment may be
modified only in writing. In addition, this commitment is subject to (a) the preparation,
execution and delivery of mutually acceptable loan documentation, including a credit agreement
incorporating substantially the terms and conditions outlined herein and in the Summary of Terms,
and (b) the accuracy and completeness in all material respects of all representations that you make
to us and all information that you furnish to us in connection with this commitment and your
compliance with the terms of this Commitment Letter. The Lead Arranger’s commitment set forth in
this Commitment Letter will terminate on April 30, 2006, unless the Restatement closes on or before
such date. The Lead Arranger shall not be responsible or liable for any consequential damages
which may be alleged as a result of its failure to provide the Senior Bank Financing.




          To induce the Lead Arranger to issue this Commitment Letter and to continue with its due
diligence efforts, you hereby agree that all reasonable out-of-pocket fees and expenses (including
the reasonable fees and expenses of counsel and consultants) of the Lead Arranger and its
affiliates arising in connection with this Commitment Letter (and its due diligence and syndication
efforts in connection herewith) and in connection with the Senior Bank Financing and the other
transactions described herein shall be for your account, whether or not the Restatement is
consummated, the Senior Bank Financing is made available or definitive credit documents are
executed. In addition, you hereby agree to pay when
and as due the fees described in the fee letter (the “Fee Letter”) executed simultaneously
herewith. You further agree to indemnify and hold harmless each of the Lenders (including, in any
event, the Lead




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Commitment Letter






 









 








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Arranger) and each director, officer, employee and affiliate thereof (each an
“Indemnified Person”) from and against any and all actions, suits, proceedings (including any
investigations or inquiries), claims, losses, damages, liabilities or expenses of any kind or
nature whatsoever which may be incurred by or asserted against or involve any such Indemnified
Person as a result of or arising out of or in any way related to or resulting from this Commitment
Letter, the Restatement or the extension or syndication of the Senior Bank Financing contemplated
by this Commitment Letter, or in any way arise from any use or intended use of this Commitment
Letter or the proceeds of the Senior Bank Financing contemplated by this Commitment Letter, and you
agree to reimburse each Indemnified Person upon demand for any reasonable legal or other reasonable
out-of-pocket expenses incurred in connection with investigating, defending or preparing to defend
any such action, suit, proceeding (including any inquiry or investigation) or claim (whether or not
Scotia or any such other Indemnified Person is a party to any action or proceeding out of which any
such expenses arise) (collectively, an “Action”); provided, however, that you shall not have to
indemnify any Indemnified Person against any loss, claim, damage, expense or liability to the
extent finally determined by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. This Commitment Letter is issued for
your benefit only and no other person or entity may rely hereon. Neither Scotia nor any Lender
shall be responsible or liable to the Borrower or any other person for consequential damages that
may be alleged as a result of this Commitment Letter.




          The Lead Arranger reserves the right to employ the services of its affiliates in providing
services contemplated by this Commitment Letter and to allocate, in whole or in part, to such
affiliates certain fees payable to the Lead Arranger in such manner as the Lead Arranger and such
affiliates may agree in their sole discretion. Each of you acknowledges that the Lead Arranger may
share with any of its affiliates, and such affiliates may share with the Lead Arranger, any
information related to the Restatement, the Borrower, any of its subsidiaries or affiliates or any
of the matters contemplated hereby in connection with the Restatement.




          The provisions of the immediately preceding two paragraphs shall survive any termination of
this Commitment Letter.




          You represent and warrant that (a) all information that has been or will hereafter be made
available by or on behalf of you or by any of your representatives in connection with the
Restatement and the other transactions contemplated hereby to the Lead Arranger or any of its
affiliates or representatives or to any Lender or any potential Lender is and will be complete and
correct in all material respects and does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such statements were or are made
and (b) all financial projections, if any, that have been or will be prepared by you or on your
behalf or by any of your representatives and made available to the Lead Arranger or any of its
affiliates or representatives or to any Lender or any potential Lender in connection with the
Restatement and the other transactions contemplated hereby have been or will be prepared in good
faith based upon reasonable assumptions (it being understood that such projections are subject to
significant uncertainties and contingencies, many of which are beyond your control, and that no
assurance can be given that any particular projections will be realized). You agree to supplement
the information and projections from time to time so that the representations and warranties
contained in this paragraph remain complete and correct in all material respects.




          In issuing these commitments, the Lead Arranger is relying on the accuracy of the information
furnished to it by you or on your behalf or by or on behalf of the Borrower (collectively, the
“Pre-Commitment Information”). The obligations of the Lead Arranger under this Commitment
Letter and of any Lender that issues a commitment for the Senior Bank Financing are made solely for
your benefit and may not be relied upon or enforced by any other person or entity.




THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Commitment Letter





 









 








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          Scotia hereby notifies you that pursuant to the requirements of the USA Patriot Act, Title III
of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), Scotia may be, and each
Lender is, required to obtain, verify and record information that identifies you, which information
includes the name, address, tax identification number and other information regarding you that will
allow Scotia or such Lender to identify you in accordance with the Patriot Act. This notice is
given in accordance with the requirements of the Patriot Act and is effective as to Scotia and each
Lender.




          You, on behalf of yourself and your affiliates, acknowledge and agree that in connection with
all aspects of the transactions contemplated by this Commitment Letter, you, Scotia, the Lenders,
and any affiliate through which any of them may be acting (each, a “Transaction Affiliate”), have
an arm’s-length business relationship that creates no fiduciary duty on the part of Scotia, any
Lender or any other Transaction Affiliate and each expressly disclaims any fiduciary relationship.




          You acknowledge that Scotia and its affiliates may be providing debt financing, equity capital
or other services (including financial advisory services) to other companies in respect of which
you may have conflicting interests regarding the transactions described herein and otherwise.
Neither we nor any of our affiliates will use confidential information obtained from you by virtue
of the transactions contemplated by this Commitment Letter or our other relationships with you in
connection with the performance by us of services for other companies, and we will not furnish any
such information to other companies. You also acknowledge that neither we nor any of our
affiliates has any obligation to use in connection with the transactions contemplated by this
Commitment Letter, or to furnish to you, confidential information obtained by us from other
companies.




          You are not authorized to show or circulate this Commitment Letter to any other person or
entity (other than your legal and financial advisors in connection with your evaluation hereof and
except as required by law or stock exchange requirements) until such time as you have accepted this
Commitment Letter as provided in the immediately succeeding paragraph. The Lead Arranger, on
behalf of itself and its affiliates, hereby agrees that it will not disclose to any person or
entity any confidential, proprietary or non-public information of Kansas City Southern, a Delaware
corporation (“Holdings”) and its subsidiaries furnished to the Lead Arranger by the Borrower (such
information collectively, “Company Information”), except that the Lead Arranger may disclose
Company Information (i) to its and its affiliates’ officers, directors, employees, agents,
accountants, attorneys, and other advisors (collectively “Lead Arranger Representatives”) who have
a need to know such Company Information for the purpose of assisting in the negotiation and
completion of the Senior Bank Financing, (ii) to actual or potential Lenders who have agreed to
hold the Company Information in confidence on substantially the same terms as provided herein, and
(iii) to the extent any portion of such Company Information (A) is or becomes generally available
to the public on a non-confidential basis other than as a result of a breach of this paragraph by
any Lead Arranger or the Lead Arranger Representatives, (B) is or becomes available to the Lead
Arranger or any Lead Arranger Representatives on a non-confidential basis from a source other than
the Borrower or (C) is required to be disclosed by law, regulation or judicial order or is
requested by any regulatory body with jurisdiction over any Lead Arranger or a Lead Arranger
Representative. Notwithstanding anything to the contrary in this Commitment Letter, the Lead
Arranger’s obligations under this paragraph shall terminate on the earlier of (i) the first
anniversary of the date of this Commitment Letter and (ii) if definitive agreements are entered
into for the Senior Bank Financing, the date such definitive agreements are executed (in which case
the confidentiality obligations of the Lead
Arranger under this paragraph shall be superseded by the confidentiality obligations in such
definitive agreements).




          If this Commitment Letter is not accepted by you as provided in the immediately succeeding
paragraph, you are to immediately return this Commitment Letter (and any copies hereof) to the
undersigned. This Commitment Letter may be executed in any number of counterparts, and by the



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different parties hereto on separate counterparts, each of which counterpart shall be an original,
but all of which shall together constitute one and the same instrument.




          If you are in agreement with the foregoing, please sign and return to the Lead Arranger
(including by way of facsimile transmission) the enclosed copy of this Commitment Letter, together
with the Fee Letter, no later than noon, New York time, on March 17, 2006. Our commitments set
forth in this Commitment Letter shall terminate at the time and on the date referenced in the
immediately preceding sentence unless this Commitment Letter and the Fee Letter are executed and
returned by you as provided in such sentence.



THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Commitment Letter




 









 








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     This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance
with the laws of the state of New York, and any right to trial by jury with respect to any claim,
action, suit or proceeding arising out of or contemplated by this Commitment Letter and/or the
related Fee Letter is hereby waived. The parties hereto hereby submit to the non-exclusive
jurisdiction of the federal and New York State courts located in the City of New York in connection
with any dispute related to this Commitment Letter or the Fee Letter or any matters contemplated
hereby or thereby. Delivery of an executed counterpart of this Commitment Letter by facsimile or
other electronic transmission shall be effective as delivery of a manually executed counterpart of
this Commitment Letter.



	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA
	 
	 	 	 	 	 	 
	 

	 	By
	 	          /s/ V.H. Gibson	 	 
	 

	 	 	 	 

Title: V.H. Gibson, Assistant Agent
	 	 





Agreed to and Accepted this

17th day of March, 2006




	 	 	 	 	 
	THE KANSAS CITY SOUTHERN RAILWAY COMPANY
	 
	 	 	 	 
	By

	 	/s/ Paul J. Weyandt	 	 
	 

	 	 

Title: Senior Vice President-Finance & Treasurer
	 	 





THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Commitment Letter




 










 







EXHIBIT A




SUMMARY OF CERTAIN TERMS AND CONDITIONS1




I. The Parties




	 	 	 
	Borrower:

	 	The Kansas City Southern Railway Company, a Missouri corporation
	 

	 	(“Kansas City Southern”).
	 
	 	 
	Holdings:

	 	Kansas City Southern, a Delaware corporation.
	 
	 	 
	Lead Arranger
	 	 
	And Bookrunner:

	 	Scotia Capital.
	 
	 	 
	Syndication Agent:

	 	To be determined.
	 
	 	 
	Administrative Agent:

	 	The Bank of Nova Scotia.
	 
	 	 
	Documentation Agent:

	 	To be determined.
	 
	 	 
	Lenders:

	 	The Bank of Nova Scotia and a syndicate of financial institutions and institutional lenders arranged by the Lead
Arranger in consultation with the Borrower.
	 
	 	 
	Guarantors:

	 	Similar to the $250 million Credit Agreement dated as of March 30, 2004 (as amended by (i) Amendment and
Waiver No. 1 to the Credit Agreement and Amendment No. 1 to the Security Agreement, dated as of December 22, 2004, (ii)
Amendment and Waiver No. 2 to the Credit Agreement, dated as of September 30, 2005, (iii) Amendment No. 3 to the Credit
Agreement, dated as of November 4, 2005, (iv) Waiver No. 3 to the Credit Agreement, dated as of December 8, 2005, and
(v) Waiver No. 4 to the Credit Agreement, dated as of March 1, 2006, and as may be further amended or otherwise modified
from time to time, the “Existing Credit Facility”), all obligations under the Senior Bank Financing shall be
unconditionally guaranteed by Holdings and each of Holdings’ and the Borrower’s direct and indirect wholly-owned
domestic subsidiaries (Holdings and all of such subsidiaries being, collectively, the “Guarantors”), subject to
customary exceptions and exclusions (consistent with the Existing
Credit Facility) and release mechanics for transactions of this type
and subject to the exclusion of certain subsidiaries to be agreed.








 




			
	1	 	Terms used herein and not otherwise defined
being used as defined in the Commitment Letter to which this Exhibit A is
attached.





THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Summary of Certain Terms and Conditions













 





2





II. Description of Credit Facilities Comprising the Senior Bank Financing



A. Term Loan Facility




	 	 	 
	Term Loan B Facility:

	 	$246.2 million Term Loan B Facility.
	 
	 	 
	Maturity and Amortization:

	 	The final maturity of the Term Loan B Facility
shall be the date which occurs seven years
after the Closing Date. The loans under the
Term Loan B Facility (the “Term B Loans”),
shall be repaid during the final year of the
Term B Loans in equal quarterly amounts,
subject to amortization of approximately 1% per
year prior to such final year.
	 
	Use of Proceeds:

	 	The Term B Loans shall only be utilized (i) to
effect the amendment and restatement of the
Existing Credit Facility (the “Restatement”)
and to pay fees and expenses incurred in
connection with the Restatement, and (ii) for
general corporate purposes.
	 
	 	 
	Availability:

	 	Term B Loans may only be borrowed on the
Closing Date. No amount of Term B Loans once
repaid may be reborrowed.






B. Revolving Credit Facility




	 	 	 
	Revolving Credit

Facility:

	 	$125 million Revolving Credit Facility, with
a letter of credit sublimit of $25 million
and a swingline of $15 million.
	 
	 	 
	Maturity:

	 	The final maturity of the Revolving Credit
Facility shall be the date which occurs five
years after the Closing Date. Loans made
pursuant to the Revolving Credit Facility
(the “Revolving Loans”) shall be repaid in
full on the fifth anniversary of the Closing
Date, and all letters of credit issued
thereunder shall terminate prior to such
time.
	 
	 	 
	Use of Proceeds:

	 	The Revolving Loans shall be utilized solely
for the Borrower’s and its subsidiaries’
working capital requirements and other
general corporate purposes.
	 
	 	 
	Availability:

	 	Revolving Loans may be borrowed, repaid and
reborrowed on and after the Closing Date.






III.Terms
Applicable to the Entire Senior Bank Financing




	 	 	 	 	 
	Closing Date	 	On or before April 30, 2006.
	 
	 	 	 	 
	Security:	 	Similar to the Existing Credit Facility, the
Borrower and each of the Guarantors shall
grant the Administrative Agent and the
Lenders a valid and perfected first priority
(subject to certain exceptions to be set
forth in the loan documentation) lien and
security interest in all of the following:
	 
	 	 	 	 
	 

	 	(a)
	 	All shares of capital stock of
(or other ownership interests in) and intercompany debt of the
Borrower and each present and future domestic subsidiary of the
Borrower or such Guarantor







THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Summary of Certain Terms and Conditions









 



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	 	(excluding, for the avoidance of
doubt, the Meridian Speedway Joint Venture (as defined in the
Existing Credit Facility)).

	 
	 	 	 	 
	 

	 	(b)
	 	All present and future property
and assets, real and personal, of the Borrower or such
Guarantor, including, but not limited to, machinery and
equipment (including, without limitation, rolling stock
equipment and accessories), inventory and other goods, accounts
receivable, owned real estate, leaseholds, fixtures, bank
accounts, general intangibles, license rights, patents,
trademarks, tradenames, copyrights, chattel paper, insurance
proceeds, contract rights, hedge agreements, documents,
instruments, indemnification rights, tax refunds and cash, but
excluding rolling stock acquired after the Closing Date that is
subject to purchase money financing within 180 days of
acquisition.
	 
	 	 	 	 
	 

	 	(c)
	 	All proceeds and products of the
property and assets described in clauses (a) and (b) above.
	 
	 	 	 	 
	 	 	In addition, Holdings shall not pledge, or permit any of its
subsidiaries to pledge, the equity interests in the Meridian Speedway
Joint Venture to any third party without the prior written consent of
the Administrative Agent.
	 
	 	 	 	 
	 	 	Notwithstanding the foregoing, the Lead Arranger may agree to exclude
particular assets from time to time acquired by the Borrower or any
Guarantor from the collateral package if it determines that the cost
of including such assets would be excessive relative to the benefits
to the Lenders of including such assets as collateral.
	 
	 	 	 	 
	Interest Rates:	 	At the option of the Borrower, the Revolving Loans and the Term Loan (collectively,
the “Loans”) may be maintained from time to time as (x) Base Rate Loans which shall bear
interest at the Applicable Margin in excess of the Base Rate in effect from time to time or
(y) Eurodollar Loans which shall bear interest at the Applicable Margin in excess of the
Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent for
the respective interest period, provided that until the earlier to occur of (x) the 30th day
following the Closing Date and (y) that date upon which the Lead Arranger has determined (and
notifies the Borrower) that the primary syndication of the Senior Bank Financing (and the
resultant addition of institutions as Lenders) has been completed no Eurodollar Loans having
an interest period greater than one month may be incurred.
	 
	 	 	 	 
	 	 	“Base Rate” shall mean the higher of (x) 1/2 of 1% in excess of the
federal funds rate or (y) the rate that the Administrative Agent
announces from time to time as its prime or base commercial lending
rate, as in effect from time to time.
	 
	 	 	 	 
	 	 	The “Applicable Margin” means at any time (a) with respect to the
Revolving Credit Facility, (i) until the first date after the Closing
Date when the Borrower delivers the financial statements and related






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Summary of Certain Terms and Conditions










 



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	 	certificates and schedules required by the loan documentation for the
Senior Bank Financing, 1.50% per annum in the case of Eurodollar Rate
Loans and 0.50% per annum in the case of Base Rate Loans, and (ii)
thereafter, the applicable percentage per annum determined in
accordance with the step-ups and step-downs reflected on the pricing
grid set forth in Annex A hereto and (b) with respect to the Term B
Facility, 1.50% per annum in the case of Eurodollar Rate Loans and
0.50% per annum in the case of Base Rate Loans.
	 
	 	 
	 

	 	Interest will accrue, in the case of overdue amounts, at the
otherwise applicable rate plus 2% per annum.
	 
	 	 
	 

	 	Interest periods of 1, 2, 3 and 6 months (or such shorter periods as
may be available and acceptable to the Lenders) shall be available in
the case of Eurodollar Loans.
	 
	 	 
	 

	 	Interest in respect of Base Rate Loans shall be payable quarterly in
arrears on the last business day of each quarter. Interest in
respect of Eurodollar Loans shall be payable in arrears at the end of
the applicable interest period and every three months in the case of
interest periods in excess of three months. Interest will also be
payable at the time of repayment of any Loans, and at maturity. All
interest accruing by reference to the Eurodollar Rate and other fee
calculations shall be based on a 360-day year and all interest
accruing by reference to the Base Rate shall be calculated based on a
365/366 day year.
	 
	 	 
	Unused

Commitment Fees:

	 	The applicable percentage per annum determined in accordance with the step-ups and step-downs reflected
on the pricing grid set forth in Annex A hereto on the unused portion of each Lender’s share of the
Senior Bank Financing from and after the Closing Date, payable (a) quarterly in arrears and (b) on the
date of termination or expiration of the commitments.
	 
	 	 
	Letter of Credit Fees:

	 	Applicable Margin for Eurodollar Loans which are Revolving Loans on the aggregate outstanding stated
amounts of letters of credit plus an additional 1/4 of 1% on the aggregate outstanding stated amounts of
letters of credit to be paid as a fronting fee to the issuing bank.
	 
	 	 
	Voluntary Commit-

ment Reductions:

	 	Substantially similar to the Existing Credit Facility.
	 
	 	 
	Voluntary Prepayment:

	 	Substantially similar to the Existing Credit Facility.
	 
	 	 
	Mandatory

Prepayment:

	 	Substantially similar to the Existing Credit Facility, all net cash proceeds (a) from sales of property
and assets of Holdings and its subsidiaries (except for sales of inventory, non-operating assets and
non-income producing assets in the ordinary course of business and subject to a reinvestment provision
to be negotiated and an additional annual basket of an amount to be agreed), (b) property insurance and
condemnation






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Summary of Certain Terms and Conditions











 



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	 	 	proceeds (subject to a reinvestment provision to be negotiated), and (c) from the issuance
after the Closing Date of additional debt of Holdings and its subsidiaries otherwise permitted under the
loan documentation (subject to exceptions to be agreed and except that proceeds not exceeding $125
million received in connection with indebtedness incurred by Holdings or its subsidiaries owing to the
Meridian Speedway Joint Venture (as defined in the Existing Credit Facility) and as currently permitted
by the Existing Credit Facility shall not be subject to a mandatory prepayment of the Term Loan B
Facility), and 50% of Excess Cash Flow (to be defined in the loan documentation) of the Borrower and its
subsidiaries for so long as the total leverage ratio is greater than 4.00:1:00, shall be applied to
prepay the Senior Bank Financing, ratably to the principal repayment installments of the Term B Facility
on a pro rata basis and then to the Revolving Credit Facility.
	 
	 	 	 	 
	Documentation:	 	Each of the commitments will be subject to the negotiation, execution and delivery of definitive
financing agreements (and related security documentation, guaranties, etc.) consistent with this Summary
of Certain Terms and Conditions, in each case prepared by counsel to the Lead Arranger.
	 
	 	 	 	 
	Conditions Precedent
to Initial Extension of Credit	 	The final loan documentation will contain the following conditions precedent:
	:
	 	 	 	 
	 
	 	 	 	 
	 

	 	(a)
	 	The final terms and conditions of
the Restatement, including, without limitation, all legal and
tax aspects thereof, shall be as described in the Commitment
Letter and otherwise consistent with the description thereof
received in writing as part of the information furnished by or
on behalf of the Borrower (the “Pre-Commitment Information”).
	 
	 	 	 	 
	 

	 	(b)
	 	All of the capital stock of the
Borrower shall be owned by Holdings and all capital stock of the
Borrower’s subsidiaries shall be owned by the Borrower,
Holdings, or one or more of the Borrower’s subsidiaries, in each
case free and clear of any lien, charge or encumbrance, other
than the liens and security interests created under the loan
documentation; the Lenders shall have a valid and perfected
first priority (subject to certain exceptions to be set forth in
the loan documentation) lien and security interest in such
capital stock (other than the stock of the Meridian Speedway
Joint Venture) and in the other collateral referred to under the
section “Security” above; all filings, recordations and
searches necessary or desirable in connection with such liens
and security interests shall have been duly made; and all
filing and recording fees and taxes shall have been duly
paid. Notwithstanding the foregoing, the Lead Arranger may
grant reasonable extensions of time for the perfection of
liens on real property and other particular assets where
perfection cannot be accomplished by the Closing Date.








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	 	(c)
	 	All governmental and third party
consents and approvals necessary in connection with the
Restatement and the Senior Bank Financing shall have been
obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect; all
applicable waiting periods shall have expired without any
adverse action being taken by any competent authority; and no
law or regulation shall be applicable in the judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the Restatement or the Senior Bank Financing.
	 
	 	 	 	 
	 

	 	(d)
	 	The Borrower and each Guarantor
shall have delivered certificates, in form and substance
satisfactory to the Lenders, attesting to the Solvency (as
hereinafter defined) of the Borrower and such Guarantor, as the
case may be, in each case individually and together with its
subsidiaries, taken as a whole, immediately before and
immediately after giving effect to the Restatement, from their
respective chief financial officers. As used herein, the term
“Solvency” of any person means (i) the fair value of the
property of such person exceeds its total liabilities
(including, without limitation, contingent liabilities), (ii)
the present fair saleable value of the assets of such person is
not less than the amount that will be required to pay its
probable liability on its debts as they become absolute and
matured, (iii) such person does not intend to, and does not
believe that it will, incur debts or liabilities beyond its
ability to pay as such debts and liabilities mature and (iv)
such person is not engaged, and is not about to engage, in
business or a transaction for which its property would
constitute an unreasonably small capital.
	 
	 	 	 	 
	 

	 	(e)
	 	The Lenders shall have been given
such access to the management, records, books of account,
contracts and properties of Holdings and its subsidiaries and
shall have received such financial, business and other
information regarding each of the foregoing persons as they
shall have requested, including, without limitation, information
as to possible contingent liabilities, tax matters, collective
bargaining agreements and other arrangements with employees,
annual financial statements dated December 31, 2005, accompanied
by an unqualified opinion of independent auditors of Holdings
and its subsidiaries, pro forma consolidated financial
statements as to the Borrower and its subsidiaries, and
forecasts prepared by management of the Borrower, in a form
satisfactory to the Lenders, of balance
sheets, income statements and cash flow statements on a
quarterly basis for the first year following the Closing Date
and on an annual basis for the three succeeding years
thereafter.
	 
	 	 	 	 
	 

	 	(f)
	 	The Lenders shall have received
(i) satisfactory opinions of counsel for the Borrower and the
Guarantors as to the transactions contemplated hereby and (ii)
such corporate






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7





	 	 	 	 	 
	 

	 	 	 	resolutions, certificates and other documents as
the Lenders shall reasonably request.
	 
	 	 	 	 
	 

	 	(g)
	 	The Borrower shall have, and
shall have caused each other obligor under the security
documents to, execute and deliver any and all further documents,
financing statements, agreements and instruments, and take all
such further actions that may be required to cause the
collateral to have a perfected, first priority security interest
in favor of the Secured Parties (to be defined in the Senior
Bank Financing).
	 
	 	 	 	 
	 

	 	(h)
	 	There shall exist no default
under any of the loan documentation, and the representations and
warranties of the Borrower and each of the Guarantors therein
shall be true and correct immediately prior to, and after giving
effect to, the initial extension of credit under the loan
documentation.
	 
	 	 	 	 
	 

	 	(i)
	 	All accrued fees and expenses of
the Administrative Agent, the Lead Arranger and the Lenders
(including the fees and expenses of counsel for the Lead
Arranger and local counsel for the Lenders) shall have been
paid.
	 
	 	 	 	 
	 

	 	(j)
	 	The Senior Bank Financing shall
have received debt ratings from Moody’s and S&P.
	 
	 	 	 	 
	Conditions Precedent
to Subsequent
Extensions of Credit:	 	There shall exist no default under any of the loan documentation, and the representations and warranties
of the Borrower and each of the Guarantors therein shall be true and correct immediately prior to, and
after giving effect to, such extension of credit.
	 
	 	 	 	 
	Representations and
Warranties, Covenants
and Events of Default:	 	Substantially similar to the Existing Credit Facility except that:
	 
	 	 	 	 
	 

	 	(k)
	 	Covenant thresholds/levels shall
be determined upon a review of revised projections.
	 
	 	 	 	 
	 

	 	(l)
	 	The definition of “Debt” in the
documentation in respect of the Senior Bank Financing shall
exclude certain indebtedness in respect of purchase agreement
indemnity and other claims that may be satisfied by Kansas City
Southern or its subsidiaries with the issuance of stock or other
equity interests of Kansas City
Southern or its subsidiaries; provided that such indebtedness
must be repaid with such stock or equity interests unless (i)
after giving effect to any payment in cash, the Parent would
have been in compliance with the financial covenants
(including the leverage ratio) as determined on a pro forma
basis as of the most recently ended fiscal quarter as if such
indebtedness had constituted “Debt” or (ii) if the Revolving
Credit Facility would






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	 	 	 	remain undrawn after such repayment and
have availability thereunder of not less than $25 million.
	 
	 	 	 	 
	 

	 	(m)
	 	If the ratings of the Senior Bank
Financing are less than Ba3 from Moody’s and BB+ from S&P, in
each case with stable outlook, at such time, the Senior Bank
Financing shall mature on the date that is 90 days prior to the
maturity date of any public debt securities of the Borrower
unless (i) such debt securities are successfully refinanced on
or prior to such date or (ii) an amount sufficient to
indefeasibly repay such debt securities has been deposited with
the applicable bond trustee on or prior to such date and, after
giving pro forma effect to such deposit, the Borrower is in pro
forma compliance with all financial covenants.
	 
	 	 	 	 
	Expenses:	 	The Borrower shall pay all of the Administrative Agent’s
and the Lead Arranger’s reasonable fees and all other
out-of-pocket expenses incurred by the Administrative
Agent or the Lead Arranger (including the fees and
expenses of counsel for the Lead Arranger) in connection
with syndicating and documenting the Senior Bank
Financing, whether or not any of the transactions
contemplated hereby are consummated, as well as all
reasonable expenses of the Administrative Agent in
connection with the administration of the loan
documentation. The Borrower shall also pay the
reasonable expenses of the Administrative Agent, the
Lead Arranger and the Lenders in connection with the
enforcement of any of the loan documentation.
	 
	 	 	 	 
	Indemnity:	 	The Borrower will indemnify and hold harmless the
Administrative Agent, the Lead Arranger, each Lender and
each of their affiliates and their officers, directors,
employees, agents and advisors from claims and losses
relating to the Restatement or the Senior Bank Financing
other than to the extent such claims or losses have been
finally determined by a court of competent jurisdiction
to have resulted directly and primarily from the gross
negligence or willful misconduct of such person.
	 
	 	 	 	 
	Required Lenders:	 	Lenders holding more than 50% of the aggregate amount of
loans and commitments under the Senior Bank Financing.
	 
	 	 	 	 
	Waivers &
Amendments:	 	Substantially similar to the Existing Credit Facility.
	 
	 	 	 	 
	Assignments and
Participations:	 	Assignments must be to Eligible Assignees (as defined in
the Existing Credit Facility) approved by the Borrower
for so long as no event of
default has occurred and been continuing (such approval not to be unreasonably
withheld) and, in each case other than an assignment to a Lender or an
assignment of the entirety of a Lender’s interest in the Senior Bank Financing,
in a minimum amount equal to $1 million. Each Lender will also have the right,
without consent of the Borrower or the Administrative Agent, to assign (i) as
security all or part of its rights under the loan documentation to any Federal
Reserve Bank and (ii) all or






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9




	 	 	 
	 

	 	part of its rights or obligations under the loan
documentation to any of its affiliates. No participation shall include voting
rights, other than for reductions or postponements of amounts payable or
releases of all or substantially all of the collateral.
	 
	 	 
	Taxes:

	 	All payments to be free and clear of any present or
future taxes, withholdings or other deductions
whatsoever (other than income taxes in the
jurisdiction of the Lender’s applicable lending
office). The Lenders will use reasonable efforts
(consistent with their respective internal policies
and legal and regulatory restrictions and so long as
such efforts would not otherwise be disadvantageous
to such Lenders) to minimize to the extent possible
any applicable taxes and the Borrower will indemnify
the Lenders and the Administrative Agent for such
taxes paid by the Lenders or the Administrative
Agent.
	 
	 	 
	Miscellaneous:

	 	Standard yield protection (including compliance with
risk-based capital guidelines, increased costs,
payments free and clear of withholding taxes and
interest period breakage indemnities), eurodollar
illegality and similar provisions, defaulting lender
provisions, waiver of jury trial, submission to
jurisdiction and judgment currency provisions.
	 
	 	 
	Governing Law:

	 	New York.
	 
	 	 
	Counsel for the

Lead Arranger:

	 	Shearman & Sterling LLP.






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Summary of Certain Terms and Conditions




 









 








Annex A




Pricing Grid




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 	Applicable	 	 	 	 
	 	 	Margin for	 	 	Margin for	 	 	Unused	 
	 	 	Base Rate	 	 	Eurodollar	 	 	Commitment	 
	Leverage Ratio	 	Loans	 	 	Rate Loans	 	 	Fee	 
	Level I

greater than 5.25: 1.00
	 	 	0.500	%	 	 	1.500	%	 	 	0.500	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level II

greater than 4.25: 1.00
but less than or equal
to 5.25: 1.00
	 	 	0.250	%	 	 	1.250	%	 	 	0.500	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level III

greater than 3.25: 1.00
but less than or
equal to 4.25:1.00
	 	 	0.000	%	 	 	1.000	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level IV

less than or equal to
3.25: 1.00
	 	 	0.000	%	 	 	0.875	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 





THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Summary of Certain Terms and Conditions