exv10w1



 





Exhibit 10.1




Execution Copy




AMENDMENT NO. 1 TO THE AMENDED AND RESTATED CREDIT AGREEMENT




Dated as of May 31, 2007




          AMENDMENT NO. 1 TO THE AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment No. 1”) among
The Kansas City Southern Railway Company, a Missouri corporation, (the “Borrower”), Kansas City
Southern, a Delaware corporation (the “Parent”), the subsidiary guarantors listed on the signature
page hereof (the “Subsidiary Guarantors”), the Lender Parties (as hereinafter defined) party
hereto, The Bank of Nova Scotia (“BNS”), as collateral agent (the “Collateral Agent”), BNS, as
administrative agent (the “Administrative Agent”; together with the Collateral Agent, the
“Agents”).




PRELIMINARY STATEMENTS:




          (1) The Borrower, the Parent, the Subsidiary Guarantors, certain financial institutions and
other persons from time to time parties thereto (collectively, the “Lender Parties”), the Agents,
Morgan Stanley Senior Funding, Inc. and Harris N.A., as co-syndication agents, LaSalle Bank
National Association and Bank of Tokyo-Mitsubishi UFJ Trust Company, as co-documentation agents,
and Scotia Capital as lead arranger and bookrunner, have entered into that certain Amended and
Restated Credit Agreement dated as of April 28, 2006 (as otherwise amended, restated, supplemented
or otherwise modified, the “Credit Agreement”; capitalized terms used herein but not defined shall
be used herein as defined in the Credit Agreement).




          (2) The Borrower has requested a new $75,000,000 term loan facility (the “Term C Facility”) on
terms substantially similar to the existing Term B Facility.




          (3) Each Person who executes and delivers this Amendment No. 1 as a Term C Lender (each, a
“Term C Lender”), will make a commitment on the Amendment No. 1 Effective Date (as hereinafter
defined) in an aggregate principal amount equal to the amount set forth opposite its name on
Schedule I to the Credit Agreement, as amended as of the Amendment No. 1 Effective Date (as
hereinafter defined) (the “Amended Schedule I”) (a copy of which has been delivered to the
Borrower).




          (4) The Borrower has requested that the Lenders amend the Credit Agreement (a) to effect the
changes described above and (b) to make other amendments set forth below.




          (5) The Lenders and the Term C Lenders (as defined in this Amendment No. 1) have agreed,
subject to the terms and conditions hereinafter set forth, to amend the Credit Agreement in certain
respects as set forth below.




          NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as
follows:




          SECTION 1. Amendment of Credit Agreement. The Credit Agreement is, effective as of
the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 3
of this Amendment No. 1, hereby amended as follows:




          (a) Section 1.01 of the Credit Agreement is hereby amended as follows:










 



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     (i) By amending and restating the definition of “Advance” in its entirety and inserting
the following definitions in its place:




““Advance” means a Term B Advance, a Term C Advance, a Revolving Credit Advance, a
Swing Line Advance or a Letter of Credit Advance.”




     (ii) By amending and restating the definition of “Applicable Margin” in its entirety
and inserting the following definition in its place:




     ““Applicable Margin” means (a) in respect of the Revolving Credit Facility and the
Swing Line Facility, (i) until the first date after the Effective Date when the Borrower
delivers the financial statements and related certificates and schedules required pursuant
to Section 5.03(c) for the fiscal quarter ending June 30, 2006, 1.00% per annum for Base
Rate Advances and 2.00% per annum for Eurodollar Rate Advances and (ii) thereafter, a
percentage as set forth below per annum determined by reference to the Leverage Ratio, as
set forth in the most recent officer’s certificate received by the Administrative Agent
pursuant to Section 5.03(b) or (c):



	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin	 	Applicable Margin
	 	 	for Base Rate	 	for Eurodollar Rate
	Leverage Ratio	 	Advances	 	Advances
	Level I
	 	 	 	 	 	 	 	 
	less than or equal to
3.25: 1.00
	 	 	0.250	%	 	 	1.250	%
	Level II
	 	 	 	 	 	 	 	 
	greater than 3.25: 1.00
but less than or equal
to 4.25:1.00
	 	 	0.500	%	 	 	1.500	%
	Level III
	 	 	 	 	 	 	 	 
	greater than 4.25: 1.00
but less than or equal
to 5.25: 1.00
	 	 	0.750	%	 	 	1.750	%
	Level IV
	 	 	 	 	 	 	 	 
	greater than 5.25: 1.00
	 	 	1.000	%	 	 	2.000	%







(b) in respect of the Term B Facility, 0.75% per annum for Base Rate Advances and
1.75% per annum for Eurodollar Rate Advances and (c) in respect of the Term C
Facility, 0.50% per annum for Base Rate Advances and 1.50% per annum for Eurodollar
Rate Advances.




In respect of the Revolving Credit Facility and the Swing Line Facility, after the first
date after the Effective Date on which the Borrower delivers the financial statements and
related certificates and schedules required pursuant to Section 5.03 (b) or (c), the
Applicable Margin for each Base Rate Advance thereunder and the Applicable Margin for each
Eurodollar Rate Advance thereunder shall be determined by reference to the Leverage Ratio,
in effect on the first day of each Interest Period for such Advance as reflected on the most
recent financial statements delivered pursuant to Sections 5.03(b) or (c), as the case may
be; provided, however, that (A) no change in the Applicable Margin shall be effective until
three Business Days after the date on which the Administrative Agent receives the financial
statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be,
and a certificate of the chief financial









 




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officer or treasurer of the Borrower demonstrating such Leverage Ratio; provided, further,
that if such officer’s certificate is not delivered when due in accordance with such
Section, then until the first Business Day after the date on which such officer’s
certificate is delivered, Level IV shall apply as of the first Business Day after the date
on which such officer’s certificate was required to have been delivered.”




     (iii) By amending and restating the definition of “Appropriate Lender” in its entirety
and inserting the following definition in its place:




     ““Appropriate Lender” means, at any time, with respect to (a) any of the Term B
Facility, the Term C Facility or the Revolving Credit Facility, a Lender that has a
Commitment with respect to such Facility or has made an Advance with respect to such
Facility at such time, (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) if
the other Revolving Credit Lenders have made Letter of Credit Advances pursuant to Section
2.03(c) that are outstanding at such time, each such other Revolving Credit Lender and (c)
the Swing Line Facility, (i) the Swing Line Bank and (ii) if the other Revolving Credit
Lenders have made Swing Line Advances pursuant to Section 2.02(b) that are outstanding at
such time, each such other Revolving Credit Lender.”




     (iv) By amending and restating the definition of “Borrowing” in its entirety and
inserting the following definition in its place:




     ““Borrowing” means a Term B Borrowing, a Term C Borrowing, a Revolving Credit Borrowing
or a Swing Line Borrowing.”




     (v) By amending and restating the definition of “Commitment” in its entirety and
inserting the following definition in its place:




     ““Commitment” means a Term B Commitment, a Term C Commitment, a Revolving Credit
Commitment, a Swing Line Commitment or a Letter of Credit Commitment.”




     (vi) By amending and restating paragraph (e) in the definition of “Excess Cash Flow”
and inserting the following language in its place:




     “(e) the aggregate principal amount of long-term Debt repaid or prepaid by Parent and
its Subsidiaries during such Fiscal Year, excluding (i) Debt in respect of Revolving Credit
Advances and Letters of Credit, (ii) Term B Advances and Term C Advances prepaid pursuant to
Sections 2.06(b)(ii) (other than any part of such prepayment attributable to gains on asset
sales that are included in the calculation of Consolidated Net Income for such Fiscal Year),
and (iii) repayments or prepayments of long-term Debt financed by incurring other long-term
Debt or by issuing Equity Interests; minus”




     (vii) By amending and restating the definition “Domestic Lending Office” in its
entirety and inserting the following language in its place:




““Domestic Lending Office” means, (a) in the case of any Swingline Bank, Revolving Credit
Lender or Term B Lender, the office of such Lender Party specified as its “Domestic Lending
Office” opposite its name on Schedule I hereto, (b) in the case of any Term C Lender, the
office specified in such Lender Party’s signature to Amendment No. 1, or (c) in the case of
any Lender Party, in the Assignment and Acceptance pursuant to which it became a Lender
Party or such other office of such Lender Party as such Lender Party may from time to time
specify to the Borrower and the Administrative Agent.”









 



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     (viii) By amending and restating the definition “Euro Dollar Lending Office” in its
entirety and inserting the following language in its place:




     ““Eurodollar Lending Office” means, (a) in the case of any Swingline Bank, Revolving
Credit Lender or Term B Lender, the office of such Lender Party specified as its “Eurodollar
Lending Office” opposite its name on Schedule I hereto, (b) in the case of any Term C
Lender, the office specified in such Lender Party’s signature to Amendment No. 1, or (c) in
the case of any Lender Party, in the Assignment and Acceptance pursuant to which it became a
Lender Party (or if no other office is specified, its Domestic Lending Office), or such
other office of such Lender Party as such Lender Party may from time to time specify to the
Borrower and the Administrative Agent.”




     (ix) By amending and restating paragraph (e) in the definition of “Facility” and
inserting the following language in its place:




     ““Facility” means the Term B Facility, the Term C Facility, the Revolving Credit
Facility, the Swing Line Facility or the Letter of Credit Facility.”




     (x) By amending and restating the definition of “Lenders” and inserting the following
language in its place:




     ““Lenders” means the Initial Lenders, the Term C Lenders and each Person that shall
become a Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender, Term
C Lender or Person, as the case may be, shall be party to this Agreement.”




     (xi) By amending and restating the definition of “Loan Documents” and inserting
the following language in its place:




     ““Loan Documents” means (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv)
the Collateral Documents, (v) the Fee Letters, (vi) each Letter of Credit Agreement, (vii)
Amendment No. 1, and (viii) each Secured Hedge Agreement, in each case as amended.”




     (xii) By amending and restating paragraph (e) in the definition of “Note” and inserting
the following language in its place:




     ““Note” means a Term B Note, Term C Note or a Revolving Credit Note.”




     (xiii) By amending and restating the definition of “Termination Date” and
inserting the following language in its place:




     ““Termination Date” means the earlier of (a) the date of termination in whole of the
Revolving Credit Commitments, the Letter of Credit Commitment, the Swing Line Commitment,
the Term B Commitments and the Term C Commitments pursuant to Section 2.05 or 6.01 and (b)
(i) for purposes of the Revolving Credit Facility, the Swing Line Facility and the Letter of
Credit Facility, April 28, 2011, (ii) for purposes of the Term B Facility, the Term C
Facility and for all other purposes, April 28, 2013; provided, however, that if, on any date
the Facilities are not rated at least Ba3 by Moody’s and BB+ by S&P (in each case, with at
least stable outlooks), the “Termination Date” for each of the Facilities shall be the date
that is 90 days prior to the earliest final maturity date of any outstanding 2000 Senior
Notes and 2002 Senior Notes unless (x) such 2000 Senior Notes and 2002 Senior Notes, as the
case may be, have been refinanced in full on or prior to such date or (y) an amount
sufficient to indefeasibly repay such 2000 Senior Notes and









 



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2002 Senior Notes, as the case may be, has been deposited with the applicable bond
trustee on or prior to such date and, after giving effect to such deposit, the Borrower is
in pro forma compliance with all financial covenants set forth in Section 5.04 as determined
on a pro forma basis as the most recently ended fiscal year.”




     (xiv) By amending and restating the definition of “Transaction” and inserting the
following language in its place:




     ““Transaction” means the Restatement, Amendment No. 1 and the other transactions
contemplated by the Loan Documents.”




     (xv) By inserting the following new definitions therein in the appropriate alphabetical
order:




     ““Amendment No. 1” means the Amendment No. 1 to the Credit Agreement, dated as of
April 28, 2006, among the Borrower, the Agents and the Lenders party thereto.”




     ““Amendment No. 1 Effective Date” means May 31, 2007.”




     ““Term C Advance” has the meaning specified in Section 2.01(e).”




     ““Term C Borrowing” means a borrowing consisting of simultaneous Term C Advances of the
same Type made by the Term C Lenders.”




     ““Term C Commitment” means, with respect to any Term C Lender at any time, the amount
set forth on such Lender’s signature page to Amendment No. 1 or, if such Lender has entered
into one or more Assignment and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Term C
Commitment”, as such amount may be reduced at or prior to such time pursuant to Section
2.05.”




     ““Term C Facility” means, at any time, the aggregate amount of the Term C Lenders’ Term
C Commitments at such time.”




     ““Term C Lender” means any Lender that has a Term C Commitment or holds a Term C
Advance.”




     ““Term C Note” means a promissory note of the Borrower payable to the order of any Term
C Lender, in substantially the form of Exhibit A-3 hereto, evidencing the indebtedness of
the Borrower to such Lender resulting from the Term C Advance made by such Lender, as
amended.”




     (b) Section 2.01 of the Credit Agreement is hereby amended by adding at the end thereof
a new subsection (e) as follows:




“(e) The Term C Advances. Each Term C Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a single advance (a “Term C Advance”)
to the Borrower on the Amendment No. 1 Effective Date in an amount not to exceed
such Lender’s Term C Commitment. The Term C Borrowing shall consist of Term C
Advances made simultaneously by the Term C Lenders ratably according to their Term C
Commitments whereupon the Term C Commitments shall be reduced to zero in









 



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accordance with Section 2.05(b). Amounts borrowed under this Section 2.01(e) and
repaid or prepaid may not be reborrowed.”




     (c) Subsection 2.02(c)(ii) of the Credit Agreement is hereby amended and restated by
inserting the following language in its place:




“(ii) the Term B Advances and Term C Advances may not be outstanding as part of more
than 10 separate Interest Periods and the Revolving Credit Advances may not be
outstanding as part of more than 15 separate Interest Periods.”




     (d) Section 2.04 of the Credit Agreement is hereby amended by adding at the end thereof
a new subsection (e) as follows:




“(e) Term C Advances. The Borrower shall repay the Term C Advances to the
Administrative Agent, for the ratable account of the Term C Lenders, in equal
quarterly installments on the last Business Day of each March, June, September and
December, commencing with the fiscal quarter ending September 30, 2007, in an amount
equal to 0.25% of the initial aggregate principal amount of the Term C Advances;
provided, however, that the final principal installment shall be repaid on the
Termination Date in respect of the Term C Facility and in any event shall be in an
amount equal to the aggregate principal amount of the Term C Advances outstanding on
such date.”




     (e) Subsection 2.05(b) of the Credit Agreement is hereby amended by adding at the end
thereof a new paragraph (iv) as follows:




“(iv) Upon the funding of the Term C Advances on the Amendment No. 1 Effective Date
pursuant to Section 2.01(e), the aggregate Term C Commitments of the Term C Lenders
shall be reduced to zero.”




     (f) Subsection 2.06(a) of the Credit Agreement is hereby amended by striking the last
sentence thereof and inserting the following language in its place:




“Each such prepayment of any Term B Advance or Term C Advance shall be applied to
the installments thereof on a pro rata basis ratably to the Appropriate Lenders in
accordance with their respective outstanding Term B Advances or Term C Advances, as
the case may be.”




     (g) Subsections 2.06(b)(i) and (ii) of the Credit Agreement are hereby amended and
restated by inserting the following language in their place:




“Mandatory. (i) The Borrower shall, on the 90th day following
the end of each Fiscal Year, if the Leverage Ratio as of the last day of such Fiscal
Year is greater than 4.00:1.00, prepay an aggregate principal amount of the Term B
Advances and Term C Advances in an amount equal to 50% of the amount of Excess Cash
Flow for such Fiscal Year. Each such prepayment shall be applied ratably to the
Term B Facility and Term C Facility and to the installments of each such Facility on
a pro rata basis ratably to the Appropriate Lenders in accordance with, as the case
may be, their respective outstanding Term B Advances or Term C Advances.




(ii) The Borrower shall, on each Prepayment Date, prepay an aggregate principal
amount of the Term B Advances and Term C Advances in an amount equal to the amount









 



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of such Net Cash Proceeds. Each such prepayment shall be applied to the
installments of the Term B Facility and Term C Facility on a pro rata basis ratably
to the Appropriate Lenders in accordance with, as the case may be, their respective
outstanding Term B Advances or Term C Advances.”




     (h) Subsection 2.06(b)(vi) of the Credit Agreement is hereby amended by inserting the
words “and Term C Advances” between the words “Advances” and “in” in the second to the last
line thereof.




     (i) Section 2.11(f) of the Credit Agreement is hereby amended by inserting the words
“and the Term C Facility” immediately following the word “Facility” in the second to the
last line thereof.




     (j) The second sentence of Subsection 2.16(a) of the Credit Agreement is hereby amended
and restated by inserting the following language in its place:




“The Borrower agrees that upon notice by any Lender Party to the Borrower (with a
copy of such notice to the Administrative Agent) to the effect that a promissory
note or other evidence of indebtedness is required or appropriate in order for such
Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise)
the Advances owing to, or to be made by, such Lender Party, the Borrower shall
promptly execute and deliver to such Lender Party, with a copy to the Administrative
Agent, a Revolving Credit Note, a Term B Note and a Term C Note, as applicable, in
substantially the form of Exhibits A-1, A-2 and A-3 hereto, respectively, payable to
the order of such Lender Party in a principal amount equal to the Revolving Credit
Commitment, the Term B Commitment and the Term C Commitment, respectively, of such
Lender Party.”




     (k) Subsection 5.02(a)(vii) and Subsection 5.02(e)(v) of the Credit Agreement are
hereby amended by inserting the words “or Term C Advances” immediately following the words
“Term B Advances”.




     (l) Subsection 7.05(c) of the Credit Agreement is hereby amended by inserting the words
“and Term C Commitments” immediately following the words “Term B Commitments”.




     (m) Section 9.01 of the Credit Agreement is hereby amended by inserting the words “,
Term C Facility” immediately following the words “Term B Facility”.




     (n) Section 9.02 of the Credit Agreement is hereby amended by inserting the words “, if
to a Term C Lender, at its Domestic Lending Office specified on its signature page to
Amendment No. 1;” after the semi-colon following the words “Schedule 1 hereto” on the
seventh line such section.



          SECTION 2. Conditions to Effectiveness. This Amendment No. 1 and the amendments
contained herein shall become effective as of the date hereof (the “Amendment No. 1 Effective
Date”) when each of the conditions set forth in this Section 2 to this Amendment No. 1 shall have
been fulfilled to the satisfaction of the Administrative Agent:





     (a) Execution of Counterparts. The Administrative Agent shall have received
counterparts of this Amendment No. 1, duly executed and delivered on behalf of each of the
(a) Loan Parties, (b) the Required Lenders, and (c) all Term C Lenders providing Term C
Commitments or as to any of the foregoing parties, advice reasonably satisfactory to the









 



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Administrative Agent that each of the foregoing parties has executed a counterpart of
this Amendment No. 1.




     (b) Payment of Fees and Expenses. The Borrower shall have paid all reasonable
expenses (including the reasonable fees and expenses of Shearman & Sterling LLP) incurred in
connection with the preparation, negotiation and execution of this Amendment No. 1 and other
matters relating to the Credit Agreement from and after the last invoice to the extent
invoiced.




     (c) Evidence of Debt. Each Term C Lender shall have received, if requested,
one or more Notes payable to the order of such Lender duly executed by the Borrower in
substantially the form of Exhibit A-3 to the Credit Agreement, evidencing the Term C
Commitment of such Lender.




     (d) Certificates. The Administrative Agent shall have received (i) a
certificate of the Secretary or an Assistant Secretary of each of the Loan Parties
certifying (A) the names and true signatures of the officers of each of the Loan Parties
authorized to sign this Amendment No. 1 and the other documents to be delivered hereunder
and (B) the resolutions of the Board of Directors of the Loan Parties evidencing approval
for this Amendment No. 1; (ii) a certificate of an officer of each of the Loan Parties
certifying (A) that no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body, or any third party to any
agreements and instruments is required for the due execution, delivery or performance by
each of the Loan Parties of this Amendment No. 1, (B) the representations and warranties
contained in Section 5 of this Amendment No. 1 are true and correct, and (C) no event has
occurred and is continuing that constitutes a Default; and (iii) a certificate from an
officer of the Borrower certifying that (A) the execution, delivery and performance by the
Borrower of Amendment No. 1 and the consummation of the transactions contemplated by
Amendment No. 1, does not and will note contravene, conflict with, violate or give rise to a
breach of, or default under any material agreement of the Borrower under which debt
securities are outstanding, (B) the aggregate fair market value of the properties located in
the counties and parishes listed on Schedule I hereto is in excess of $75,000,000 (the “Real
Property Minimum Value”), and (C) that the fair market value of the Collateral is in excess
of the aggregate amount of Commitments under the Credit Agreement as amended by this
Amendment No. 1.




     (e) Additional Collateral Documents. Except as provided for otherwise under
Section 4 hereof, all necessary modifications or confirmations to the Collateral Documents
in effect on the Amendment No. 1 Effective Date shall have been duly executed and delivered
so as to ensure the continued effectiveness of the security interests created thereby, as
reasonably determined by the Administrative Agent and its counsel, and the Administrative
Agent shall have received evidence that all such other action as shall be necessary or
desirable to record, perfect or protect the security interests of the Secured Parties shall
have been taken, it being understood that with respect to any such action which has not been
taken prior to the Amendment No. 1 Effective Date, the Borrower may, in the reasonable
discretion of the Administrative Agent, be granted an additional period to take such action
not to exceed thirty (30) days (which may be extended in the sole discretion of the
Administrative Agent) following the Amendment No. 1 Effective Date.




     (f) Legal Details, Etc. All documents executed or submitted pursuant hereto
shall be reasonably satisfactory in form and substance to the Administrative Agent and
Shearman & Sterling LLP as counsel. The Administrative Agent and its counsel shall have
received all information and such counterpart originals or such certified or other copies or
such materials as the Administrative Agent or its counsel may reasonably request, and all
legal matters incident to









 



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the transactions contemplated by this Amendment No. 1 shall be reasonably satisfactory
to the Administrative Agent and its counsel.




     (g) No Default. No Default shall have occurred and be continuing, or would
occur as a result of the transactions contemplated by this Amendment No. 1.



          SECTION 3. The Term C Advances. On the Amendment No. 1 Effective Date, the Term C Lenders
will make Term C Advances to the Borrower, it being understood that the Term C Advances shall have
the same terms, rights and obligations as the Term B Advances as set forth in the Loan Documents.




          SECTION 4. Postclosing Covenants. By the date that is 90 days after the Amendment No. 1
Effective Date, as such time period may be extended in the Administrative Agent’s reasonable
discretion, the Borrower shall deliver the following (it being understood that such 90 day period
shall be extended on a day-for-day basis for each day that the Borrower has not been provided with
all draft amended mortgages on or prior to the 80th day immediately following the
Amendment No. 1 Effective Date):





     (a) Amendments in form and substance satisfactory to the Collateral Agent of those
Mortgages filed in the counties or parishes listed on Schedule I hereto (the
“Amended Mortgages”), each duly executed and acknowledged by Borrower; provided
that, in the event that the Collateral Agent determines in its sole (but not
unreasonable) discretion that the fair market value of such mortgaged properties
fails to exceed the Real Property Minimum Value, the Borrower shall execute such
additional Mortgage amendments as the Collateral Agent may request in
order to ensure that Real Property Minimum Value is exceeded by an amount to be
reasonably determined by the Collateral Agent;




     (b) If applicable, a fully paid “date down” endorsement to each Mortgage Policy related
to each of the Amended Mortgages in form and substance acceptable to the Collateral Agent,
dated as of the date of this Amendment No. 1, and issued by Stewart Title Guaranty Company,
which states, among other things, that since the effective date of the applicable mortgage
policy, there have been no changes in the state of title, including any new Liens that fail
to qualify as Permitted Encumbrances; and




     (c) Such other consents, agreements and confirmations of lessors and third parties as
the Collateral Agent may deem necessary or desirable or any other action that the Collateral
Agent may deem necessary or desirable in order to continue valid first and subsisting Liens
on the property described in the Mortgages (including the Amended Mortgages);


In addition to items listed immediately above, the Collateral Agent shall be satisfied with the
advice from local counsel, acceptable to the Collateral Agent, in each state in which an Amended
Mortgage is recorded, as such advice may concern the Lien priority of each respective Amended
Mortgage, mortgage recording (or similar) taxes payable in connection with each such Amended
Mortgage, and/or other related matters.










 



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          SECTION 5. Confirmation of Representations and Warranties. Each of the Loan Parties hereby
represents and warrants, on and as of the date hereof, that the representations and warranties
contained in the Credit Agreement are correct and true in all material respects on and as of the
date hereof, before and after giving effect to this Amendment No. 1, as though made on and as of
the date hereof, other than any such representations or warranties that, by their terms, refer to a
specific date.




          SECTION 6. Affirmation of Subsidiary Guarantors. Each Subsidiary Guarantor hereby
consents to the amendments to the Credit Agreement effected hereby, and hereby confirms and agrees
that, notwithstanding the effectiveness of this Amendment No. 1, the obligations of such Subsidiary
Guarantor contained in Article VIII of the Credit Agreement, as amended hereby, or in any other
Loan Documents to which it is a party are, and shall remain, in full force and effect and are
hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this
Amendment No. 1, each reference in Article VIII of the Credit Agreement and in each of the other
Loan Documents to “the Agreement”, “thereunder”, “thereof” or words of like import shall mean and
be a reference to the Credit Agreement, as modified by this Amendment No. 1. Without limiting the
generality of the foregoing, the Collateral Documents to which such Subsidiary Guarantor is a party
and all of the Collateral described therein do, and shall continue to secure, payment of all of the
Secured Obligations (in each case, as defined therein).




          SECTION 7. Reference to and Effect on the Loan Documents. (a) On and after the
effectiveness of this Amendment No. 1, each reference in the Credit Agreement to “hereunder”,
“hereof” or words of like import referring to the Credit Agreement, and each reference in the other
transaction documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as
modified by this Amendment No. 1.




          (b) The Credit Agreement, the Notes and each of the other Loan Documents, as specifically
amended by this Amendment No. 1, are and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing,
the Collateral Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case as
amended by this Amendment No. 1.




          (c) The execution, delivery and effectiveness of this Amendment No. 1 shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any
Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.




          SECTION 8. Execution in Counterparts. This Amendment No. 1 may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together shall constitute but
one and the same agreement. Delivery of an executed counterpart of a signature page to this
Amendment No. 1 by telecopier or electronic mail in “Portable Document Format” (PDF) shall be
effective as delivery of an original executed counterpart of this Amendment No. 1.




          SECTION 9. Governing Law. This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York, and shall be subject to the jurisdictional and
service provisions of the Credit Agreement, as if this were a part of the Credit Agreement.




          SECTION 10. Entire Agreement; Modification. This Amendment No. 1 constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof, there being no
other









 



11


agreements or understandings, oral, written or otherwise, respecting such subject matter, any
such agreement or understanding being superseded hereby, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, and may not be amended,
extended or otherwise modified, except in a writing executed in whole or in counterparts by each
party hereto.



[Signatures follow.]










 







          IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed by
their respective officers thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	THE KANSAS CITY SOUTHERN RAILWAY COMPANY



as Borrower

 	 
	 	By  	/s/ Paul J. Weyandt
 	 
	 	 	Title: Senior Vice President-Finance & Treasurer 	 
	 	 	 	 
	 
	 	KANSAS CITY SOUTHERN

as Guarantor

 	 
	 	By  	/s/ Paul J. Weyandt
 	 
	 	 	Title: Senior Vice President-Finance & Treasurer 	 
	 	 	 	 
	 
	 	GATEWAY EASTERN RAILWAY COMPANY

as Guarantor

 	 
	 	By  	/s/ Paul J. Weyandt
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 
	 
	 	SOUTHERN DEVELOPMENT COMPANY

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 









 



13

	 	 	 	 	 



	 	 	 	 	 
	 	THE KANSAS CITY NORTHERN RAILWAY COMPANY

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Chief Financial Officer 	 
	 	 	 	 
	 
	 	TRANS-SERVE, INC.

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 
	 
	 	PABTEX, L.P.

as Guarantor

 	 
	 	By 	
Pabtex GP, LLC, its General Partner
  	 
	 	By 	
Southern Industrial Services, Inc., its Sole

Member

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 
	 
	 	PABTEX G.P., LLC

as Guarantor

 	 
	 	By 	Southern Industrial Services, Inc., its Sole Member

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 
	 
	 	SIS BULK HOLDING, INC.

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 










 



14

	 	 	 	 	 



	 	 	 	 	 
	 	SOUTHERN INDUSTRIAL SERVICES, INC.

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 
	 
	 	VEALS, INC.

as Guarantor

 	 
	 	By  	/s/ Patrick J. Ottensmeyer
 	 
	 	 	Title: Vice President & Treasurer 	 
	 	 	 	 










 





	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA,

as Administrative Agent

 	 
	 	By  	/s/ J.F. Todd
 	 
	 	 	Title: Managing Director 	 
	 	 	 	 
	 
	 	THE BANK OF NOVA SCOTIA,

as Collateral Agent

 	 
	 	   By
 	/s/ J.F. Todd 
	 	 	Title: Managing Director 	 
	 	 	 
	 
	 	SCOTIA CAPITAL,

as Lead Arranger and Bookrunner

 	 
	 	By  	/s/ Chris J. Allen
 	 
	 	 	Title: Managing Director & Office Head