EX-4.1






EXHIBIT 4.1




The Kansas City Southern Railway Company,




Issuer




and




U.S. Bank National Association,




Trustee














Indenture




Dated as of December 18, 2008














13% Senior Notes due 2013




     



	 	 	 	 	 
	TABLE OF CONTENTS
	 	 	 	 
	 
	 	 	 	 
	Page
	 	 	 	 
	 
	 	 	 	 
	ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions 
	 	 	1	 
	SECTION 1.02 Other Definitions 
	 	 	21	 
	SECTION 1.03 Incorporation by Reference of Trust Indenture Act 
	 	 	21	 
	SECTION 1.04 Rules of Construction 
	 	 	22	 
	ARTICLE 2
THE SECURITIES
SECTION 2.01 Amount of Securities; Issuable in Series 
	 	 	22	 
	SECTION 2.02 Form and Dating 
	 	 	23	 
	SECTION 2.03 Execution and Authentication 
	 	 	24	 
	SECTION 2.04 Registrar and Paying Agent 
	 	 	24	 
	SECTION 2.05 Paying Agent to Hold Money in Trust 
	 	 	25	 
	SECTION 2.06 Holder Lists 
	 	 	25	 
	SECTION 2.07 Transfer and Exchange 
	 	 	25	 
	SECTION 2.08 Replacement Securities 
	 	 	26	 
	SECTION 2.09 Outstanding Securities 
	 	 	26	 
	SECTION 2.10 Temporary Securities 
	 	 	27	 
	SECTION 2.11 Cancellation 
	 	 	27	 
	SECTION 2.12 Defaulted Interest 
	 	 	27	 
	SECTION 2.13 CUSIP Numbers 
	 	 	27	 
	ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee 
	 	 	28	 
	SECTION 3.02 Selection of Securities to Be Redeemed 
	 	 	28	 
	SECTION 3.03 Notice of Redemption 
	 	 	28	 
	SECTION 3.04 Effect of Notice of Redemption 
	 	 	29	 
	SECTION 3.05 Deposit of Redemption Price 
	 	 	29	 
	SECTION 3.06 Securities Redeemed in Part 
	 	 	29	 
	ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities 
	 	 	29	 






1




	 	 	 	 	 
	SECTION 4.02 SEC Reports 
	 	 	30	 
	SECTION 4.03 Limitation on Indebtedness 
	 	 	30	 
	SECTION 4.04 Limitation on Restricted Payments 
	 	 	32	 
	SECTION 4.05 Limitation on Restrictions on Distributions from Restricted Subsidiaries 
	 	 	35	 
	SECTION 4.06 Limitation on Sales of Assets and Capital Stock 
	 	 	36	 
	SECTION 4.07 Limitation on Transactions with Affiliates 
	 	 	40	 
	SECTION 4.08 Change of Control 
	 	 	41	 
	SECTION 4.09 Compliance Certificate 
	 	 	42	 
	SECTION 4. 10 Further Instruments and Acts 
	 	 	42	 
	SECTION 4.11 Future Note Guarantors 
	 	 	42	 
	SECTION 4.12 Limitation on Lines of Business 
	 	 	43	 
	SECTION 4.13 Limitation on Liens 
	 	 	43	 
	SECTION 4.14 Limitation on Sale/Leaseback Transactions 
	 	 	43	 
	SECTION 4.15 Covenant Suspension 
	 	 	44	 
	ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 When Company May Merge or Transfer Assets 
	 	 	44	 
	ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default 
	 	 	46	 
	SECTION 6.02 Acceleration 
	 	 	47	 
	SECTION 6.03 Other Remedies 
	 	 	48	 
	SECTION 6.04 Waiver of Past Defaults 
	 	 	48	 
	SECTION 6.05 Control by Majority 
	 	 	48	 
	SECTION 6.06 Limitation on Suits 
	 	 	48	 
	SECTION 6.07 Rights of Holders to Receive Payment 
	 	 	49	 
	SECTION 6.08 Collection Suit by Trustee 
	 	 	49	 
	SECTION 6.09 Trustee May File Proofs of Claim 
	 	 	49	 
	SECTION 6.10 Priorities 
	 	 	49	 
	SECTION 6.11 Undertaking for Costs 
	 	 	50	 
	SECTION 6.12 Waiver of Stay or Extension Laws 
	 	 	50	 
	ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee 
	 	 	50	 
	SECTION 7.02 Rights of Trustee 
	 	 	51	 
	SECTION 7.03 Individual Rights of Trustee 
	 	 	52	 
	SECTION 7.04 Trustee’s Disclaimer 
	 	 	52	 
	SECTION 7.05 Notice of Defaults 
	 	 	53	 






2




SECTION 7.06 Reports by Trustee to Holders 53



SECTION 7.07 Compensation and Indemnity 53



SECTION 7.08 Replacement of Trustee 54



SECTION 7.09 Successor Trustee by Merger 55



SECTION 7.10 Eligibility; Disqualification 55



SECTION 7.11 Preferential Collection of Claims Against Company 55




ARTICLE 8




DISCHARGE OF INDENTURE; DEFEASANCE



SECTION 8.01 Discharge of Liability on Securities; Defeasance 55



SECTION 8.02 Conditions to Defeasance 57



SECTION 8.03 Application of Trust Money 58



SECTION 8.04 Repayment to Company 58



SECTION 8.05 Indemnity for Government Obligations 58



SECTION 8.06 Reinstatement 58




ARTICLE 9




AMENDMENTS



SECTION 9.01 Without Consent of Holders 59



SECTION 9.02 With Consent of Holders 59



SECTION 9.03 Compliance with Trust Indenture Act 60



SECTION 9.04 Revocation and Effect of Consents and Waivers 60



SECTION 9.05 Notation on or Exchange of Securities 61



SECTION 9.06 Trustee to Sign Amendments 61



SECTION 9.07 Payment for Consent 61




ARTICLE 10




NOTE GUARANTEES



SECTION 10.01 Note Guarantees 61



SECTION 10.02 Limitation on Liability 63



SECTION 10.03 Successors and Assigns 64



SECTION 10.04 No Waiver 64



SECTION 10.05 Modification 64



SECTION 10.06 Execution of Supplemental Indenture for Future Note Guarantors 64



SECTION 10.07 Non-Impairment 65




ARTICLE I I




MISCELLANEOUS



SECTION 11.01 Trust Indenture Act Controls 65



SECTION 11.02 Notices 65



3



	 	 	 	 	 
	SECTION 11.03 Communication by Holders with Other Holders 
	 	 	66	 
	SECTION 11.04 Certificate and Opinion as to Conditions Precedent 
	 	 	66	 
	SECTION 11.05 Statements Required in Certificate or Opinion 
	 	 	66	 
	SECTION 11.06 When Securities Disregarded 
	 	 	66	 
	SECTION 11.07 Rules by Trustee, Paying Agent and Registrar 
	 	 	67	 
	SECTION 11.08 Legal Holidays 
	 	 	67	 
	SECTION 11.09 GOVERNING LAW 
	 	 	67	 
	SECTION 11.10 No Recourse Against Others 
	 	 	67	 
	SECTION 11.11 Successors 
	 	 	67	 
	SECTION 11.12 Multiple Originals 
	 	 	67	 
	SECTION 11.13 Table of Contents; Headings 
	 	 	67	 






	 	 	 	 	 
	Appendix A

	 	-
	 	Provisions Relating to Original Securities and Additional Securities
	Exhibit A

	 	-
	 	Form of Security
	Exhibit B

	 	-
	 	Form of Supplemental Indenture
	Exhibit C

	 	-
	 	Form of Note Guarantee






4




INDENTURE dated as of December 18, 2008, among The Kansas City Southern Railway
Company, a Missouri corporation (the “Company”), Kansas City Southern (the “Parent”), Gateway
Eastern Railway Company, PABTEX GP, LLC, PABTEX I, L.P., SIS Bulk Holding, Inc., Southern
Development Company, Southern Industrial Services, Inc., and Trans-Serve, Inc. (collectively,
including the Parent, the “Note Guarantors”) and U.S. Bank National Association, a national banking
association, as trustee (the “Trustee”).



Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of (a) the Company’s 13% Senior Notes due 2013 issued on the date
hereof (the “Original Securities”) and (b) any Additional Securities (as defined herein) that may
be issued on any Issue Date (all such Securities in clauses (a) and (b) being referred to
collectively as the “Securities”). Except as otherwise provided herein, the Securities will be
unlimited in aggregate principal amount outstanding, of which $190,000,000 in aggregate principal
amount will be initially issued on the date hereof. Subject to the conditions and in compliance
with the covenants set forth herein, the Company may issue an unlimited aggregate principal amount
of Additional Securities.




ARTICLE 1




Definitions and Incorporation by Reference




SECTION 1.01 Definitions.



“Additional Assets” means (a) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Parent or a Restricted Subsidiary in a Permitted Business; (b) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Parent or another Restricted Subsidiary; or (c) additional Capital Stock of a
Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary described in clauses (b) or (c) above is
primarily engaged in a Permitted Business.



“Additional Securities” means an unlimited aggregate principal amount of 13% Senior Notes due
2013 issued under the terms of this Indenture subsequent to the Closing Date.



“Affiliate” of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.



“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Parent or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation, or similar transaction (each referred to for the
purposes of this definition as a “disposition”), of:




(a) any shares of Capital Stock of a Restricted Subsidiary (other than directors’
qualifying shares or shares required by applicable law to be held by a Person other than the
Parent or a Restricted Subsidiary),




(b) all or substantially all the assets of any division or line of business of the
Parent or any Restricted Subsidiary, or




(c) any other assets of the Parent or any Restricted Subsidiary outside of the ordinary
course of business of the Parent or such Restricted Subsidiary,



other than, in the case of (a), (b) or (c) above,




(i) disposition by a Restricted Subsidiary to the Parent or by the Parent or a
Restricted Subsidiary to a Wholly Owned Restricted Subsidiary,




(ii) for purposes of Section 4.06 only, a disposition that constitutes a
Restricted Payment permitted by Section 4.04,




(iii) a disposition of assets with a Fair Market Value of less than $5,000,000,




(iv) any exchange of like property pursuant to Section 1031 of the Code for use
in a Permitted Business,




(v) Permitted Property Swaps, and




(vi) sales or dispositions of obsolete locomotives, rolling stock and other
equipment.



“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate borne by the Securities,
compounded annually) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).



“Average Life” means, as of the date of determination, with respect to any Indebtedness or
Preferred Stock, the quotient obtained by dividing (a) the sum of the products of the numbers of
years from the date of determination to the dates of each successive scheduled principal payment of
such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (b) the sum of all such payments.



“Board of Directors” means the Board of Directors of the Parent or any committee thereof duly
authorized to act on behalf of the Board of Directors of the Parent.



“Business Day” means each day other than a Saturday, Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of New York.



“Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible
into such equity.



“Capitalized Lease Obligations” means an obligation that is required to be classified and
accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and
the amount of Indebtedness represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease.




“Change of Control” means the occurrence of any of the following events:




(a) at any time, less than 75% of the members of the Board of Directors of the Parent
shall be (1) individuals who are members of such board on December 15, 2008 or (2)
individuals whose election, or nomination for election by the Parent’s stockholders, was
approved by a vote of at least 75% of the members of the Board of Directors of the Parent
then still in office who are members of such board on December 15, 2008 (or whose election
or nomination has been approved as provided in this clause (a));




(b) at any time, any Person, or any two or more Persons acting as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring, holding or
disposing of Voting Stock of the Parent, shall become, according to public announcement or
filing, the “beneficial owner” (as defined in Rule 13d-3 issued under the Exchange Act),
directly or indirectly, of securities of the Parent representing 30% or more (calculated in
accordance with such Rule 13d-3) of the combined voting power of the Parent’s then
outstanding Voting Stock;




(c) any Person other than the Parent shall acquire ownership, directly or indirectly,
beneficially or of record of more than 30% of the Voting Stock of the Company; or




(d) the merger or consolidation of the Parent or the Company with or into another
Person or the merger of another Person with or into the Parent or the Company, or the sale
of all or substantially all the assets of the Parent or the Company to another Person, and,
in the case of any such merger or consolidation, the securities of the Parent or the Company
that are outstanding immediately prior to such transaction and that represent 100% of the
aggregate voting power of the Voting Stock of the Parent or the Company are changed into or
exchanged for cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other consideration,
securities of the surviving Person or transferee that represent immediately after such
transaction at least a majority of the aggregate voting power of the Voting Stock of the
surviving Person or transferee.




“Closing Date” means the date of this Indenture.




“Code” means the Internal Revenue Code of 1986, as amended.



“Company” means the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the Securities.



“Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the
aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters
ending prior to the date of such determination for which financial information is publicly
available to (b) Consolidated Interest Expense for such four fiscal quarters; provided,
however, that:




(i) if the Parent or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period (other than Indebtedness under a revolving credit facility) that
remains outstanding on such date of determination or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, EBITDA
and Consolidated Interest Expense for such period shall be calculated after giving effect on
a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the
first day of such period and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period;




(ii) if the Parent or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness (other than Indebtedness under a revolving credit
facility) since the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged on the date of the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest
Expense for such period shall be calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the Parent or such Restricted Subsidiary
had not earned the interest income actually earned during such period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such
Indebtedness;




(iii) if since the beginning of such period the Parent or any Restricted Subsidiary
shall have made any Asset Disposition, the EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the assets that are the
subject of such Asset Disposition for such period or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and Consolidated Interest
Expense for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Parent or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the Parent and its
continuing Restricted Subsidiaries in connection with such Asset Disposition for such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest
Expense for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Parent and its continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale);




(iv) if since the beginning of such period the Parent or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person that becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period; and




(v) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Parent or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or any Investment
or acquisition of assets that would have required an adjustment pursuant to clause (iii) or
(iv) above if made by the Parent or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition of assets occurred on
the first day of such period.



For purposes of this definition, whenever pro forma effect is to be given to an acquisition of
assets or other Investment, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith,
the pro forma calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Parent and shall comply with the requirements of Rule 11-02 of Regulation
S-X promulgated by the SEC. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Indebtedness during such
period). For purposes of making the computation referred to above, interest on any Indebtedness
under a revolving credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.



“Consolidated Current Liabilities” as of the date of determination means the aggregate amount
of liabilities of the Parent and its Consolidated Restricted Subsidiaries that may properly be
classified as current liabilities (including taxes accrued as estimated), on a Consolidated basis,
after eliminating (a) all intercompany items between the Parent and any Restricted Subsidiary and
(b) all current maturities of long-term Indebtedness, all as determined in accordance with GAAP
consistently applied.



“Consolidated Interest Expense” means, for any period, the total interest expense of the
Parent and its Consolidated Restricted Subsidiaries, plus, to the extent Incurred by the Parent and
its Consolidated Restricted Subsidiaries in such period but not included in such interest expense,
without duplication (a) interest expense attributable to Capitalized Lease Obligations and the
interest expense attributable to leases constituting part of a Sale/Leaseback Transaction, (b)
amortization of debt discount, (c) capitalized interest, (d) commissions, discounts and other fees
and charges attributable to letters of credit and bankers’ acceptance financing, (e) interest
accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by
the Parent or any Restricted Subsidiary, (f) net costs or benefit associated with Interest Rate
Agreements, and (g) dividends in respect of all Disqualified Stock of the Parent or the Company and
all Preferred Stock of any of the Restricted Subsidiaries of the Parent (other than the Company),
to the extent held by Persons other than the Parent or a Wholly Owned Restricted Subsidiary;
provided, however, that Consolidated Interest Expense shall exclude (A) the
interest expense of any Restricted Subsidiary in the same proportion as the net income of that
Restricted Subsidiary is excluded from Consolidated Net Income, and (B) any amounts related to
amortization of costs associated with issuance of Indebtedness.



“Consolidated Net Income” means, for any period, the net income of the Parent and its
Consolidated Subsidiaries for such period; provided, however, that there shall not
be included in such Consolidated Net Income:




(a) any net income of any Person (other than the Parent) if such Person is not a
Restricted Subsidiary, except that, subject to the limitations contained in clause (c) below
and to the extent not already included, (A) the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Parent or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other
distribution made to a Restricted Subsidiary, to the limitations contained in clause (b)
below), and (B) the amounts so included shall be decreased by the amount of the Parent or
such Restricted Subsidiary’s equity in a net loss of any such Person for such period to the
extent that Parent or Restricted Subsidiary has funded such loss;




(b) any net income of any Restricted Subsidiary that is not a Note Guarantor other than
the Company, if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, except that subject to the limitations contained in
clause (c) below, the Parent’s equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the aggregate amount
of cash that could be distributed by such Restricted Subsidiary during such period to the
Parent or another Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution made to another Restricted Subsidiary, to the
limitation contained in this clause);




(c) any gain or loss realized upon the sale or other disposition of any asset of the
Parent or its Consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) that is not sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition of any Capital Stock of any
Person;



	 	 	 
	(d)

(e)

	 	any extraordinary gain or loss; and

the cumulative effect of a change in accounting principles.






Notwithstanding the foregoing, for the purposes of Section 4.04 only, there shall be excluded
from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of
assets from Unrestricted Subsidiaries to the Parent or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments permitted under such
Section pursuant to clause (a)(3)(D) thereof.



“Consolidated Net Tangible Assets” as of any date of determination, means the total amount of
assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other
applicable reserves and other properly deductible items) that would appear on a Consolidated
balance sheet of the Parent and its Consolidated Restricted Subsidiaries, determined on a
Consolidated basis in accordance with GAAP, and after giving effect to purchase accounting and
after deducting therefrom Consolidated Current Liabilities and, to the extent otherwise included,
the amounts of: (a) minority interests in Consolidated Subsidiaries held by Persons other than the
Parent or a Restricted Subsidiary; (b) excess of cost over fair value of assets of businesses
acquired; (c) any revaluation or other write-up in book value of assets subsequent to the Closing
Date as a result of a change in the method of valuation in accordance with GAAP consistently
applied; (d) unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (e) cash set apart and held in a sinking or
other analogous fund established for the purpose of redemption or other retirement of Capital Stock
to the extent such obligation is not reflected in Consolidated Current Liabilities; and (g)
Investments in and assets of Unrestricted Subsidiaries.



“Consolidation” means the consolidation of the amounts of each of the Restricted Subsidiaries
with those of the Parent in accordance with GAAP consistently applied; provided,
however, that “Consolidation” shall not include consolidation of the accounts of any
Unrestricted Subsidiary, but the interest of the Parent or any Restricted Subsidiary in an
Unrestricted Subsidiary will be accounted for as an investment. The term “Consolidated” has a
correlative meaning.



“Credit Agreement” means the Credit Agreement dated as of April 28, 2006, among the Parent,
the Company, the subsidiary guarantors named therein, the lenders party thereto, and The Bank of
Nova Scotia, as Administrative Agent and Collateral Agent, as amended by amendment No. 1 thereto
dated as of May 31, 2007 and as further amended, restated, supplemented, waived, replaced (whether
or not upon termination, and whether with the original lenders or otherwise), refinanced,
restructured or otherwise modified from time to time (except to the extent that any such amendment,
restatement, supplement, waiver, replacement, refinancing, restructuring or other modification
thereto would be prohibited by the terms of this Indenture unless otherwise agreed to by the
Holders of at least a majority in aggregate principal amount of Securities at the time
outstanding).



“Default” means any event that is, or after notice or passage of time or both would be, an
Event of Default.



“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event (a) matures or is mandatorily redeemable pursuant
to a sinking fund obligation or otherwise, (b) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the
Parent or a Restricted Subsidiary; provided, however, that any such conversion or
exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable) or (c)
is redeemable at the option of the holder thereof, in whole or in part, in the case of each of
clauses (a), (b) and (c), on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right to require such
Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change
of control” occurring prior to the first anniversary of the Stated Maturity of the Securities shall
not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable
to such Capital Stock are not more favorable to the holders of such Capital Stock than the
provisions of Sections 4.06 and 4.08.



“EBITDA” for any period means the Consolidated Net Income for such period, plus, without
duplication, the following to the extent deducted in calculating such Consolidated Net Income: (a)
income tax expense of the Parent and its Consolidated Restricted Subsidiaries, (b) Consolidated
Interest Expense, (c) depreciation expense of the Parent and its Consolidated Restricted
Subsidiaries, (d) amortization expense of the Parent and its Consolidated Restricted Subsidiaries,
and (e) any fees and expenses, or any amortization or write-off thereof, incurred in connection
with any acquisition, investment, asset disposition, issuance or repayment, defeasance or discharge
of debt, issuance of equity securities, refinancing transaction (including the termination of
existing Interest Rate Agreements in connection therewith) or amendment or other modification of
any debt instrument, and any charges incurred as a result of any such transaction. Notwithstanding
the foregoing, if any part of the net income of any Restricted Subsidiary was required to be
excluded from the calculation of Consolidated Net Income, the items referred to in the foregoing
clauses (a) through (e) in respect of such Restricted Subsidiary shall be included in EBITDA in the
same proportion as the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income.



“Equity Offering” means an underwritten primary public offering of common stock of the Parent
or the Company pursuant to an effective registration statement under the Securities Act or a bona
fide private placement of the common stock of the Parent or the Company on arm’s-length terms to
unaffiliated third parties.




“Exchange Act” means the Securities Exchange Act of 1934, as amended.



“Excluded Contributions” means Net Cash Proceeds received by the Parent or the Company from
the issue or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Closing
Date (other than an issuance or sale to (x) a Restricted Subsidiary of the Parent or (y) an
employee stock ownership plan or other trust established by the Parent or any of its Restricted
Subsidiaries), in each case designated as Excluded Contributions pursuant to an Officers’
Certificate executed on the date such Capital Stock is issued or sold, which are excluded from the
calculation set forth in Section 4.04(a)(3).



“Fair Market Value” means, with respect to any asset or property, the price that could be
negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.



“GAAP” means generally accepted accounting principles in the United States of America as in
effect as of the Closing Date, including those set forth in (a) the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public Accountants, (b)
statements and pronouncements of the Financial Accounting Standards Board, (c) such other
statements by such other entities as approved by a significant segment of the accounting profession
and (d) the rules and regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins
and similar written statements from the accounting staff of the SEC. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with GAAP.



“Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness or other obligation of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of
such other Person (whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part); provided,
however, that the term “Guarantee” shall not include endorsements for collection or deposit
in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding
meaning. The term “Guarantor” shall mean any Person Guaranteeing any obligation.



“Holder” means the Person in whose name a Security is registered on the Registrar’s books.



“Incur” means issue, assume Guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the time such
Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise)
shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term “Incurrence” when used as a noun shall have a correlative meaning. The accretion of principal
of a non-interest bearing or other discount security shall not be deemed the Incurrence of
Indebtedness.



“Indebtedness” means, with respect to any Person on any date of determination, without
duplication:




(a) the principal of and premium (if any) in respect of indebtedness of such Person
for borrowed money;




(b) the principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;




(c) all obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto);




(d) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except Trade Payables), which purchase price is due more than twelve
months after the date of placing such property in service or taking delivery and title
thereto or the completion of such services;




(e) all Capitalized Lease Obligations and all Attributable Debt of such Person;




(f) the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary
of such Person that is not a Note Guarantor, any Preferred Stock (but excluding, in each
case, any accrued dividends);




(g) all Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; provided,
however, that the amount of Indebtedness of such Person shall be the lesser of (i)
the Fair Market Value of such asset at such date of determination and (ii) the amount of
such Indebtedness of such other Persons;




(h) Interest Rate Agreements of such Person; and




(i) all obligations of the type referred to in clauses (a) through (h) of other Persons
and all dividends of other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee.



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 the maximum liability, upon the occurrence
of the contingency giving rise to the obligation, of any contingent obligations at such date.




“Indenture” means this Indenture as amended or supplemented from time to time.



“Interest Rate Agreement” means, with respect to any Person, any interest rate protection
agreement, interest rate future agreement, interest rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement to which such Person is party or of which it is
a beneficiary.



“Investment” in any Person means any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender) or other extension of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others), or any purchase
or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person.
For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04, (a) (1) in the case
of a Restricted Subsidiary being designated an Unrestricted Subsidiary, “Investment” shall include
the portion of the Fair Market Value of such Subsidiary’s net assets which is proportionate to the
Parent’s equity interest in such Subsidiary, and (2) in the case of an Unrestricted Subsidiary
being designated a Restricted Subsidiary, “Investment” shall include the lesser of (i) the Parent’s
Investment in such Subsidiary at the time of such designation, and (ii) the portion of the Fair
Market Value of such Subsidiary’s net assets which is proportionate to the Parent’s equity interest
in such Subsidiary; and (b) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its Fair Market Value at the time of such transfer.



“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s Investors Service, Inc. or BBB- (or the equivalent) by Standard & Poor’s Ratings Group,
Inc.



“Issue Date”, with respect to any Securities, means the date on which the Securities are
originally issued.



“KCSM” means Kansas City Southern de Mexico, S.A. de C.V., a sociedad anónima de capital
variable organized under the laws of the United Mexican States.



“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in the nature thereof).



“Net Available Cash” from an Asset Disposition means cash payments received (including any
cash payments received by way of deferred payment of principal pursuant to a note or installment
receivable or otherwise and proceeds from the sale or other disposition of any securities received
as consideration, but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or received in any other
noncash form) therefrom, in each case net of (a) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all federal, state, provincial, foreign and
local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such
Asset Disposition, (b) all payments made on any Indebtedness that is secured by any assets subject
to such Asset Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition, (c) all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (d) appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets disposed of in such
Asset Disposition and retained by the Parent or any Restricted Subsidiary after such Asset
Disposition.



“Net Cash Proceeds”, with respect to any issuance or sale of Capital Stock, means the cash
proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or
placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or payable as a result
thereof.



“Note Guarantee” means each Guarantee of the obligations with respect to the Securities issued
by a Person pursuant to the terms of this Indenture.




“Note Guarantor” means any Person that has issued a Note Guarantee.



“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial
Officer, the President, any Vice President, the Treasurer or the Secretary of the Parent or the
Company. “Officer” of a Note Guarantor has a correlative meaning.




“Officers’ Certificate” means a certificate signed by two Officers.



“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Parent, the Company, a Note Guarantor
or the Trustee.



“Parent” means Kansas City Southern, a Delaware corporation, until a successor replaces it
and, thereafter, means such successor.



“Permitted Business” means any business engaged in by the Parent or any Restricted Subsidiary
on the Closing Date or such date as any Person becomes a Restricted Subsidiary, and any business
related, ancillary or complementary thereto.



“Permitted Investment” means an Investment by the Parent or any Restricted Subsidiary in (a)
the Parent, a Restricted Subsidiary or a Person that will, upon the making of such Investment,
become a Restricted Subsidiary; provided, however, that the primary business of
such Restricted Subsidiary is a Permitted Business; (b) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Parent or a Restricted Subsidiary; provided,
however, that such Person’s primary business is a Permitted Business; (c) Temporary Cash
Investments; (d) receivables owing to the Parent or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Parent or any such Restricted Subsidiary deems reasonable under
the circumstances; (e) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for accounting purposes and that are
made in the ordinary course of business; (f) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Parent or such Restricted Subsidiary and
not exceeding $5 million in the aggregate outstanding at any one time; (g) Stock Purchase Loans not
exceeding $3 million in the aggregate outstanding at any one time; (h) stock, obligations or
securities received in settlement of debts created in the ordinary course of business and owing to
the Parent or any Restricted Subsidiary or in satisfaction of judgments; (i) any Person to the
extent such Investment represents the noncash portion of the consideration received for an Asset
Disposition that was made pursuant to and in compliance with Section 4.06; (j) The Panama Canal
Railway Company; provided, however, that the aggregate amount of all such
Investments in Panama Canal Railway Company made after the Closing Date and at any time outstanding
shall not exceed $15 million; (k) any company that is engaged in the same line of business as the
Company or a related line of business in the form of Guarantees for the benefit of, or capital
contributions or loans to, or sale/leaseback transactions with, such company; provided,
however, that the aggregate amount of such capital contributions, loans and guaranteed
Indebtedness and sale/leaseback transactions made after the Closing Date and at any time
outstanding shall not exceed $25 million; (l) Southern Capital LLC or a similar joint venture;
provided, however, that the aggregate amount of all such Investments in Southern
Capital LLC or other joint venture made after the Closing Date and at any time outstanding shall
not exceed $50 million, not more than $10 million of which shall be for purposes other than
rehabilitation of locomotives and rolling stock; (m) Permitted Property Swaps; or (n) KCSM and its
Subsidiaries; provided, however, that the aggregate amount of all such Investments
in KCSM and its Subsidiaries made after the Closing Date shall not exceed $50 million.




“Permitted Liens” means, with respect to any Person:




(a) (i) Liens to secure Indebtedness permitted pursuant to clauses (b)(i) and (b)(vi)
of Section 4.03 and (ii) Liens to secure Indebtedness (other than Indebtedness described in
clause (b)(ii) of Section 4.03) such that the maximum principal amount of such Indebtedness,
as of any date, after giving effect to the Incurrence of such Indebtedness and application
of proceeds therefrom on such date, would not cause the Secured Indebtedness Leverage Ratio
to be greater than 3.0 to 1.0;




(b) Liens for taxes, assessments or governmental charges or levies on such Person’s
property if the same shall not at the time be delinquent or thereafter can be paid without
penalty or are being contested in good faith and by appropriate proceedings;




(c) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens arising in the ordinary course of business that secure payment of
obligations (i) that are being contested in good faith by appropriate proceedings or (ii)
for which such Person or any of its Subsidiaries, as applicable, has posted a bond supported
only by cash;




(d) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, laws providing for old age pensions or other social security or
retirement benefits, or similar legislation or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or appeal bonds to which
such Person is a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case Incurred in the ordinary course of business;




(e) utility easements, building restrictions and such other encumbrances or charges
against real property and defects and irregularities in the title thereto or facts an
accurate survey of the property would show and landlords’ and lessors’ liens under leases to
which such Person or any of its Subsidiaries is a party, none of which in any material way
affect the marketability of the same or interfere with the use thereof in the ordinary
course of the business of such Person or its Subsidiaries;




(f) Liens existing on the Closing Date;




(g) any Lien on any property or asset prior to the acquisition thereof by such Person
or any of its Subsidiaries or existing on any property or asset of any other Person that
becomes a Subsidiary of such Person after the Closing Date prior to the time such other
Person becomes a Subsidiary of such Person; provided, however, that (i) such
Lien is not created, Incurred or assumed in contemplation of or in connection with such
acquisition or such other Person becoming a Subsidiary of such Person, as the case may be,
(ii) such Lien shall not apply to any other property or assets of such Person or its
Subsidiaries and (iii) such Lien shall secure only those obligations which it secures on the
date of such acquisition or the date such other Person becomes a Subsidiary of such Person,
as the case may be;




(h) Liens on fixed or capital assets acquired, constructed or improved by such Person
or any of its Subsidiaries; provided, however, that (i) such Liens secure
Indebtedness permitted pursuant to Section 4.03(b)(vi), (ii) such Liens and the Indebtedness
secured thereby are Incurred prior to or within 180 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed the cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such Liens shall not apply to any other property or assets of such Person or any of its
Subsidiaries;




(i) judgment Liens in respect of judgments that do not constitute an Event of Default
pursuant to Section 6.01(h);




(j) Liens securing Indebtedness or other obligations of a Subsidiary of such Person
owing to such Person or a Wholly Owned Restricted Subsidiary of such Person;




(k) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to
the request of and for the account of such Person in the ordinary course of business;




(l) Liens securing obligations under Interest Rate Agreements so long as such
obligations relate to Indebtedness that is, and is permitted under this Indenture to be,
secured by a Lien on the same property securing such obligations;




(m) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in
part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (a), (f),
(g) and (h); provided, however, that:




(i) such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements to or on such property) and




(ii) the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of: (1) the outstanding principal amount or, if greater,
committed amount of Indebtedness secured by Liens described under clauses (a), (f),
(g) or (h) at the time the original Lien became a Permitted Lien under this
Indenture and (2) an amount necessary to pay any fees and expenses, including
premiums, related to such Refinancings; and




(n) Liens to secure Indebtedness permitted under this Indenture Incurred to fund or
refinance the reconstruction of the line between Victoria and Rosenberg, Texas, so long as
the amount of outstanding Indebtedness secured by Liens pursuant to this clause (n) does not
exceed $150 million.



“Permitted Property Swap” means a swap of locomotives, rolling stock, track materials or real
property (including any fixtures or improvements thereon) where the Fair Market Value of the
locomotives, rolling stock, track materials, real property (including any fixtures or improvements
thereon) or other consideration received is at least equal to the Fair Market Value of the
locomotives, rolling stock, track materials, real property (including any fixtures or improvements
thereon) or other consideration transferred, in each case, as such Fair Market Value is determined
in good faith by a responsible financial or accounting Officer of the Parent.



“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.



“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) that is preferred as to the payment of dividends, or as to
the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.



“principal” of a Security means the principal of the Security plus the premium, if any,
payable on the Security that is due or overdue or is to become due at the relevant time.



“Purchase Money Indebtedness” means Indebtedness (a) consisting of the deferred purchase price
of an asset, conditional sale obligations, obligations under any title retention agreement and
other purchase money obligations, in each case where the maturity of such Indebtedness does not
exceed the anticipated useful life of the asset being financed, and (b) Incurred to finance the
acquisition by the Parent or a Restricted Subsidiary of such asset, including additions and
improvements; provided, however, that such Indebtedness is incurred within 180 days
after the acquisition by the Parent or such Restricted Subsidiary of such asset.



“Rating Agency” means each of Standard & Poor’s Ratings Group, Inc. and Moody’s Investors
Service, Inc. or if either of the foregoing shall not make a rating on the Securities publicly
available, a nationally recognized statistical rating agency or agencies, as the case may be,
selected by the Parent which shall be substituted for Standard & Poor’s Ratings Group, Inc. or
Moody’s Investors Service, Inc. or both, as the case may be.



“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for,
such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.



“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace,
renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any
Indebtedness of the Parent or any Restricted Subsidiary existing on the Closing Date or Incurred in
compliance with this Indenture (including Indebtedness of the Parent that Refinances Refinancing
Indebtedness) including any premiums, accrued interest, fees and expenses related to such
refinancing, replacement, renewal, repayment or extension; provided, however, that
(a) the Refinancing Indebtedness has a Stated Maturity no earlier than the earlier of (1) the
Stated Maturity of the Indebtedness being Refinanced and (2) the first anniversary of the Stated
Maturity of the Securities, (b) the Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the
Indebtedness being refinanced, (c) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the aggregate principal amount (or if issued with original issue discount,
the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus any
premiums, accrued interest, fees and expenses related to such refinancing, replacement, renewal,
repayment or extension, and (d) if the Indebtedness being refinanced is subordinated in right of
payment to the Securities, such Refinancing Indebtedness is subordinated in right of payment to the
Securities at least to the same extent as the Indebtedness being Refinanced; provided
further, however, that Refinancing Indebtedness shall not include (i) Indebtedness
of a Restricted Subsidiary that is not a Note Guarantor and that Refinances Indebtedness of the
Company or (ii) Indebtedness of the Parent or a Restricted Subsidiary that Refinances Indebtedness
of an Unrestricted Subsidiary.



“Restricted Subsidiary” means the Company and any other Subsidiary of the Parent other than an
Unrestricted Subsidiary.



“Sale/Leaseback Transaction” means an arrangement entered into after the Closing Date relating
to property now owned or hereafter acquired by the Parent or a Restricted Subsidiary whereby the
Parent or a Restricted Subsidiary transfers such property to a Person and the Parent or such
Restricted Subsidiary leases it from such Person, other than leases between the Parent and a Wholly
Owned Restricted Subsidiary or between Wholly Owned Restricted Subsidiaries. Notwithstanding the
preceding sentence, any such arrangement that would otherwise be included in this definition of a
Sale/Leaseback Transaction that is concluded within 180 days following the date of the acquisition
of the property being transferred shall not be considered a Sale/Leaseback Transaction.




“SEC” means the Securities and Exchange Commission.



“Secured Indebtedness” means Indebtedness of the Company secured by a Lien.



“Secured Indebtedness Leverage Ratio”, as of any date of determination, means the ratio of (i)
any Indebtedness secured by a Lien to (ii) the aggregate amount of EBITDA for the period of the
most recent four consecutive fiscal quarters ending prior to such date for which financial
information is publicly available.




“Securities” means the Securities issued under this Indenture.




“Securities Act” means the Securities Act of 1933, as amended.



“Senior Indebtedness” of the Company or any Note Guarantor means the principal of, premium (if
any), and fees and other amounts owing in respect of, the Credit Agreement and all other
Indebtedness of the Company or any Note Guarantor, as applicable, whether outstanding on the
Closing Date or thereafter Incurred, unless in the instrument creating or evidencing the same or
pursuant to which the same is outstanding it is provided that such obligations are subordinated in
right of payment to the Securities or such Note Guarantor’s Note Guarantee, as applicable;
provided, however, that Senior Indebtedness of the Company or any Note Guarantor
shall not include (a) any obligation of the Company to the Parent or any other Subsidiary of the
Parent or any obligation of such Note Guarantor to the Parent or any other Subsidiary of the
Parent, (b) any liability for federal, state, local or other taxes owed or owing by the Company or
such Note Guarantor, as applicable, (c) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or instruments evidencing
such liabilities), (d) any Indebtedness or obligation of the Company or such Note Guarantor, as
applicable (and any accrued and unpaid interest in respect thereof), that by its terms is
subordinate or junior in any respect to any other Indebtedness or obligation of the Company or such
Note Guarantor, as applicable, including any Subordinated Obligations of the Company or such Note
Guarantor, as applicable, (e) any obligations with respect to any Capital Stock, or (f) any
Indebtedness Incurred in violation of this Indenture.



“Significant Subsidiary” means any Restricted Subsidiary other than the Company that would be
a “Significant Subsidiary” of the Parent within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.



“Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).



“Stock Purchase Loans” means loans or advances made by the Parent or any Restricted Subsidiary
in the ordinary course of business to employees for the purpose of purchasing restricted shares of
common stock of the Parent.



“Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the
Closing Date or thereafter Incurred) that is subordinate or junior in right of payment to the
Securities pursuant to a written agreement. “Subordinated Obligation” of a Note Guarantor has a
correlative meaning.



“Subsidiary” of any Person means any corporation, association, partnership or other business
entity of which more than 50% of the total voting power of shares of Capital Stock or other
interests (including partnership or membership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (a) such Person, (b) such Person and
one or more Subsidiaries of such Person or (c) one or more Subsidiaries of such Person.



“Temporary Cash Investments” means any of the following: (a) any investment in direct
obligations of the United States of America or any agency thereof or obligations Guaranteed by the
United States of America or any agency thereof, (b) investments in time deposit accounts,
certificates of deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by the , United
States of America having capital, surplus and undivided profits aggregating in excess of
$250,000,000 (or the foreign currency equivalent thereof) and whose long-term debt is rated “A” (or
such similar equivalent rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act), (c) repurchase obligations with a
term of not more than 30 days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b) above, (d) investments
in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Parent) organized and in existence under the laws of
the United States of America or any foreign country recognized by the United States of America with
a rating at the time as of which any investment therein is made of “P-1” (or higher) according to
Moody’s Investors Services, Inc. or “A-1 “ (or higher) according to Standard and Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. (“S&P”), and (e) investments in securities
with maturities of six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s Investors
Service, Inc.



“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the
Closing Date.



“Trade Payables” means, with respect to any Person, any accounts payable or any indebtedness
or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in
the ordinary course of business in connection with the acquisition of goods or services.



“Trustee” means the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor.



“Trust Officer” means any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs functions similar to
those performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the administration of this
Indenture.



“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to
time.



“Unrestricted Subsidiary” means KCSM and each of its Subsidiaries and (a) any Subsidiary of
the Parent that at the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (b) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary of the Parent (including any newly
acquired or newly formed Subsidiary of the Parent but excluding the Company) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness
of, or owns or holds any Lien on any property of, the Parent or any other Subsidiary of the Parent
that is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that either (i) the Subsidiary to be so designated has total assets consolidated with those of its
subsidiaries in accordance with GAAP consistently applied of $1,000 or less or (ii) if such
Subsidiary has assets consolidated with those of its subsidiaries in accordance with GAAP
consistently applied greater than $1,000, then such designation would be permitted under Section
4.04. The Board of Directors may designate KCSM or any other Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect to
such designation (a) the Parent could Incur $1.00 of additional Indebtedness under Section 4.03(a),
and (b) no Default shall have occurred and be continuing. Any such designation of a Subsidiary as a
Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors
giving effect to such designation and an Officers’ Certificate certifying that such designation
complied with the foregoing provisions.



“U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer’s option.



“Voting Stock” of a Person means all classes of Capital Stock or other interests (including
partnership or membership interests) of such Person then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.



“Wholly Owned Restricted Subsidiary” means a Restricted Subsidiary of the Parent all the
Capital Stock of which (other than directors’ qualifying shares) is owned by the Parent or another
Wholly Owned Restricted Subsidiary.




SECTION 1.02 Other Definitions.



	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Affiliate Transaction”
	 	 	4.07	(a)
	“Bankruptcy Law”
	 	 	6.01	 
	“Change of Control Offer”
	 	 	4.08	(b)
	“covenant defeasance option”
	 	 	8.01 	(b)
	“Custodian”
	 	 	6.01	 
	“Definitive Securities”
	 	Appendix A
	“Event of Default”
	 	 	6.01	 
	“Global Securities”
	 	Appendix A
	“Guaranteed Obligations”
	 	 	10.01	 
	“incorporated provision”
	 	 	11.01	 
	“legal defeasance option”
	 	 	8.01	(b)
	“Legal Holiday”
	 	 	11.08	 
	“Notice of Default”
	 	 	6.01	 
	“Offer”
	 	 	4.06	(b)
	“Offer Amount”
	 	4.06(c)(ii)
	“Offer Period”
	 	4.06(c)(ii)
	“Paying Agent”
	 	 	2.04	 
	“protected purchaser”
	 	 	2.08	 
	“Purchase Date”
	 	 	4.06	(c)(i)
	“Registrar”
	 	 	2.04	(a)
	“Restricted Payment”
	 	 	4.04	(a)
	“Securities Custodian”
	 	Appendix A
	“Successor Company”
	 	 	5.01	(a)






SECTION 1.03 Incorporation by Reference of Trust Indenture Act. This Indenture is
subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a
part of this Indenture. The following TIA terms have the following meanings:




“Commission” means the SEC.




“indenture securities” means the Securities and the Note Guarantees.




“indenture security holder” means a Holder.




“indenture to be qualified” means this Indenture.




“indenture trustee” or “institutional trustee” means the Trustee.



“obligor” on the indenture securities means the Company, the Note Guarantors and any other
obligor on the indenture securities.



All other TIA terms used in this Indenture that are defined in the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned to them by such
definitions.




SECTION 1.04 Rules of Construction. Unless the context otherwise requires:




(a) a term has the meaning assigned to it;




(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;




(c) “or” is not exclusive;




(d) “including” means including without limitation;




(e) words in the singular include the plural and words in the plural include the
singular;




(f) the principal amount of any non-interest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP; and




(g) the principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock, whichever is greater.




ARTICLE 2




The Securities



SECTION 2.01 Amount of Securities; Issuable in Series. The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is unlimited. The
Securities may be issued in one or more series. All Securities of any one series shall be
substantially identical except as to denomination.



With respect to any Additional Securities issued after the Closing Date (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 2.07, 2.08, 2.09, 2.10 or 3.06 or the Appendix), there shall
be (a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth
or determined in the manner provided in an Officers’ Certificate or (ii) established in one or more
indentures supplemental hereto, prior to the issuance of such Additional Securities:




(1) whether such Additional Securities shall be issued as part of a new or existing
series of Securities and the title of such Additional Securities (which shall distinguish
the Additional Securities of the series from Securities of any other series);




(2) the issue price and issuance date of such Additional Securities, including the date
from which interest on such Additional Securities shall accrue; provided,
however, that no Additional Securities may be issued at a price that would cause such
Additional Securities to have “original issue discount” within the meaning of Section 1273
of the Code; and




(3) if applicable, that such Additional Securities shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the respective
depositaries for such Global Securities, the form of any legend or legends which shall be
borne by such Global Securities in addition to or in lieu of those set forth in Exhibit A
hereto and any circumstances in addition to or in lieu of those set forth in Section 2.3 of
the Appendix in which any such Global Security may be exchanged in whole or in part for
Additional Securities registered, or any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the depositary for such
Global Security or a nominee thereof.



If any of the terms of any Additional Securities are established by action taken pursuant to a
resolution of the Board of Directors, a copy of an appropriate record of such action shall be
certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers’ Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Securities.



SECTION 2.02 Form and Dating. Provisions relating to the Securities are set forth in
the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The
Securities, including any Additional Securities issued, and the Trustee’s certificate of
authentication shall each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to which the Parent, the
Company or any Note Guarantor is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of
its authentication. The Securities shall be issuable only in registered form without interest
coupons and only in denominations of $1,000 and integral multiples thereof.



SECTION 2.03 Execution and Authentication. Two Officers shall sign the Securities for
the Company by manual or facsimile signature.



If an Officer whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.



A Security shall not be valid until an authorized signatory of the Trustee signs the
certificate of authentication on the Security by manual signature. The signature shall be
conclusive evidence that the Security has been authenticated under this Indenture.



The Trustee shall authenticate and make available for delivery Securities as set forth in the
Appendix.



The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a
Trust Officer, a copy of which shall be furnished to the Company. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for
service of notices and demands.



SECTION 2.04 Registrar and Paying Agent. (a) The Company shall maintain an office or
agency where Securities may be presented for registration of transfer or for exchange (the
“Registrar”) and an office or agency where Securities may be presented for payment (the “Paying
Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional paying agents. The term
“Paying Agent” includes any additional paying agent, and the term “Registrar” includes any
co-registrars. The Company initially appoints the Trustee as (i) Registrar and Paying Agent in
connection with the Securities and (ii) the Securities Custodian with respect to the Global
Securities.



(b) The Company shall enter into an appropriate agency agreement with any Registrar or Paying
Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Parent or any of its domestically organized
Wholly Owned Restricted Subsidiaries, including the Company, may act as Paying Agent or Registrar.



(c) The Company may remove any Registrar or Paying Agent upon written notice to such Registrar
or Paying Agent and to the Trustee; provided, however, that no such removal shall
become effective until (i) acceptance of an appointment by a successor as evidenced by an
appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as
the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with
clause (i) above. Thereupon the removal shall become effective and the successor or Trustee, as the
case may be, shall have all the rights, powers and duties of the Registrar or Paying Agent under
this Indenture. The Registrar or Paying Agent may resign at any time upon written notice to the
Company and the Trustee.



SECTION 2.05 Paying Agent to Hold Money in Trust. On or prior to each due date of the
principal of and interest on any Security, the Company shall deposit with the Paying Agent (or if
the Company or a Wholly Owned Restricted Subsidiary is acting as Paying Agent, segregate and hold
in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal of and interest on
the Securities, and shall notify the Trustee of any default by the Company in making any such
payment. If the Parent, the Company or a Subsidiary of the Parent acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall
have no further liability for the money delivered to the Trustee.



SECTION 2.06 Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of Holders.
If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish,
to the Trustee, in writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders.



SECTION 2.07 Transfer and Exchange. The Securities shall be issued in registered form
and shall be transferable only upon the surrender of a Security for registration of transfer and in
compliance with the Appendix. When a Security is presented to the Registrar with a request to
register a transfer, the Registrar shall register the transfer as requested if its requirements
therefor are met. When Securities are presented to the Registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate Securities at the
Registrar’s request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or exchange pursuant to
this Section. The Company shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the case of Securities to
be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15
days before the mailing of a notice of redemption of Securities.



Prior to the due presentation for registration of transfer of any Security, the Company, the
Note Guarantors, the Trustee, the Paying Agent, and the Registrar may deem and treat the Person in
whose name a Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and (subject to paragraph 2 of the Securities) interest, if any,
on such Security and for all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, any Note Guarantor, the Trustee, the Paying Agent, or the Registrar shall
be affected by notice to the contrary.



Any Holder of a Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interest in such Global Security may be effected only through a book-entry
system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a
beneficial interest in such Global Security, and that ownership of a beneficial interest in such
Global Security shall be required to be reflected in a book entry.



All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture
shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.



SECTION 2.08 Replacement Securities. If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security
if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(a) satisfies the Company or the Trustee within a reasonable time after such Holder has notice of
such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to
receiving such notification, (b) makes such request to the Company or the Trustee prior to the
Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of
the Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee
to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss that any of
them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for
their expenses in replacing a Security. In the event any such mutilated, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the Company in its
discretion may pay such Security instead of issuing a new Security in replacement thereof.




Every replacement Security is an obligation of the Company.



The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, lost,
destroyed or wrongfully taken Securities.



SECTION 2.09 Outstanding Securities. Securities outstanding at any time are all
Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. Subject to Section 11.06, a
Security does not cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.



If a Security is replaced or paid pursuant to Section 2.08, it ceases to be outstanding unless
the Trustee and the Company receive proof satisfactory to them that the replaced or paid Security
is held by a protected purchaser.



If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal, interest payable on that
date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease to be outstanding
and interest on them ceases to accrue.



SECTION 2.10 Temporary Securities. In the event that Definitive Securities are to be
issued under the terms of this Indenture, until such Definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall, upon the written order of the Company, authenticate Definitive
Securities and deliver them in exchange for temporary Securities upon surrender of such temporary
Securities at the office or agency of the Company, without charge to the Holder.



SECTION 2.11 Cancellation. The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and
no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment
or cancellation and shall dispose of cancelled Securities in accordance with its customary
procedures or deliver cancelled Securities to the Company pursuant to written direction by an
Officer. The Company may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation. The Trustee shall not authenticate Securities in place
of cancelled Securities other than pursuant to the terms of this Indenture.



SECTION 2.12 Defaulted Interest. If the Company defaults in a payment of interest on
the Securities, the Company shall pay the defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to
the Persons who are Holders on a subsequent special record date. The Company shall fix or cause to
be fixed any such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail or cause to be mailed to each Holder a notice that states the
special record date, the payment date and the amount of defaulted interest to be paid.



SECTION 2.13 CUSIP Numbers. The Company in issuing the Securities may use “CUSIP”
numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice may
state that no representation is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee
of any change in the “CUSIP” numbers.




ARTICLE 3




Redemption



SECTION 3.01 Notices to Trustee. If the Company elects to redeem Securities pursuant
to paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed.



The Company shall give each notice to the Trustee provided for in this Section at least 60
days before the redemption date unless the Trustee consents to a shorter period. Such notice shall
be accompanied by an Officers’ Certificate and an Opinion of Counsel from the Company to the effect
that such redemption will comply with the conditions herein. Any such notice may be cancelled at
any time prior to notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.



SECTION 3.02 Selection of Securities to Be Redeemed. If fewer than all the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot or by
a method that the Trustee in its sole discretion shall deem to be fair and appropriate. The Trustee
shall make the selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be in amounts of
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.



SECTION 3.03 Notice of Redemption. (a) At least 30 days but not more than 60 days
before a date for redemption of Securities, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed at such Holder’s registered address.




The notice shall identify the Securities to be redeemed and shall state:




(i) the redemption date;




(ii) the redemption price and the amount of accrued interest to the redemption date;




(iii) the name and address of the Paying Agent;




(iv) that Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price;




(v) if fewer than all the outstanding Securities are to be redeemed, the certificate
numbers and principal amounts of the particular Securities to be redeemed;




(vi) that, unless the Company defaults in making such redemption payment or the Paying
Agent is prohibited from making such payment pursuant to the terms of this Indenture,
interest on Securities (or portion thereof) called for redemption ceases to accrue on and
after the redemption date;




(vii) the CUSIP number, if any, printed on the Securities being redeemed; and




(viii) that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Securities.



(b) At the Company’s request, the Trustee shall give the notice of redemption in the Company’s
name and at the Company’s expense. In such event, the Company shall provide the Trustee with the
information required by this Section.



SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption is mailed,
Securities called for redemption become due and payable on the redemption date and at the
redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price stated in the notice, plus accrued and unpaid interest to the
redemption date; provided, however, that if the redemption date is after a regular
record date and on or prior to the interest payment date, the accrued interest shall be payable to
the Holder of the redeemed Securities registered on the relevant record date. Failure to give
notice or any defect in the notice to any Holder shall not affect the validity of the notice to any
other Holder.



SECTION 3.05 Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on
the redemption date, the Company shall deposit with the Paying Agent (or, if the Parent, the
Company or a Wholly Owned Restricted Subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest on all Securities or
portions thereof to be redeemed on that date other than Securities or portions of Securities called
for redemption that have been delivered by the Company to the Trustee for cancellation. On and
after the redemption date, interest shall cease to accrue on Securities or portions thereof called
for redemption so long as the Company has deposited with the Paying Agent funds sufficient to pay
the principal of, plus accrued and unpaid interest on the Securities to be redeemed, unless the
Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.



SECTION 3.06 Securities Redeemed in Part. Upon surrender of a Security that is
redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at
the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.




ARTICLE 4




Covenants



SECTION 4.01 Payment of Securities. The Company shall promptly pay the principal of
and interest on the Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal and interest shall be considered paid on the date due if on such date the
Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the terms of this
Indenture.



The Company shall pay interest on overdue principal at the rate specified therefor in the
Securities, and it shall pay interest on overdue installments of interest at the same rate to the
extent lawful.



SECTION 4.02 SEC Reports. At all times from and after the Closing Date, whether or not
the Parent is then required to file reports with the Commission, for so long as any Securities are
outstanding, the Parent shall file with the Commission all such reports and other information when
and as the Parent would be required to file with the Commission by Sections 13(a) or 15(d) under
the Exchange Act if the Parent were subject thereto, unless the Commission does not permit such
filings, in which case the Parent shall provide such reports and other information to the Trustee
(within the same time periods that would be applicable if the Parent were required and permitted to
file reports with the Commission) and instruct the Trustee to mail such reports and other
information to Holders at their addresses set forth on the Securities Register. The Parent shall
supply the Trustee and each Holder or shall supply to the Trustee for forwarding to each such
Holder, without cost to such Holder, copies of such reports and other information. Notwithstanding
the foregoing, as long as the Parent is subject to informational requirements of the Exchange Act
and in accordance therewith files reports and other information with the Commission, each Holder
shall be deemed to have been supplied the foregoing reports and forms at the time such Holder may
electronically access such reports and forms by means of the Commission’s homepage on the internet
or at the Parent’s homepage on the internet. Notwithstanding any language in this Section, nothing
in this Section 4.02 shall be interpreted to limit or reduce the Company’s obligations under
Section 314(a) of the TIA.



SECTION 4.03 Limitation on Indebtedness. (a) The Parent will not, and will not
permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Parent, the Company, or any Restricted Subsidiary that
is a Note Guarantor may Incur Indebtedness if on the date of such Incurrence and after giving
effect thereto the Consolidated Coverage Ratio would be greater than 2.0:1.



(b) Notwithstanding Section 4.03(a), the Parent, the Company and the Restricted Subsidiaries
may Incur the following Indebtedness:




(i) Indebtedness under the Credit Agreement in an aggregate principal amount not to
exceed $500 million, less the aggregate amount of all prepayments of principal from the
proceeds of Asset Dispositions applied to permanently reduce any such Indebtedness;




(ii) Indebtedness of the Parent owed to and held by any Wholly Owned Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Parent or any
Wholly Owned Restricted Subsidiary; provided, however, that (1) any
subsequent issuance or transfer of any Capital Stock or any other event that results in any
such Wholly Owned Restricted Subsidiary ceasing to be a Wholly Owned Restricted Subsidiary
or any subsequent transfer of any such Indebtedness (except to the Parent or a Wholly Owned
Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof, and (2) if the Company or a Note Guarantor is the
obligor on such Indebtedness and such Indebtedness is owed to and held by a Wholly Owned
Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations of such Note Guarantor
with respect to its Note Guarantee;




(iii) Indebtedness (1) represented by the Securities (not including any Additional
Securities) and the Note Guarantees, (2) outstanding on the Closing Date (other than the
Indebtedness described in clauses (i) and (ii) above), (3) consisting of Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause (iii)
(including Indebtedness that is Refinancing Indebtedness) or Section 4.03(a) and (4)
consisting of Guarantees of any Indebtedness permitted under clauses (i) and (ii) of this
paragraph (b);




(iv) (1) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior
to the date on which such Restricted Subsidiary was acquired by the Parent (other than
Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to
provide all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary of or was otherwise acquired by the Parent); provided,
however, that on the date that such Restricted Subsidiary is acquired by the Parent,
the Parent would have been able to Incur $1.00 of additional Indebtedness pursuant to
Section 4.03(a) after giving effect to the Incurrence of such Indebtedness pursuant to this
clause (iv) and (2) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect
of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (iv);




(v) Indebtedness (1) in respect of performance bonds, bankers’ acceptances, letters of
credit and surety or appeal bonds provided by the Parent and the Restricted Subsidiaries in
the ordinary course of their business, and (2) under Interest Rate Agreements entered into
for bona fide hedging purposes in the ordinary course of business;




(vi) Purchase Money Indebtedness and Capitalized Lease Obligations in an aggregate
principal amount at any time outstanding not to exceed the greater of (A) $300 million, or
(B) 10% of Consolidated Net Tangible Assets, such percentage to be calculated after giving
effect to the proposed Purchase Money Indebtedness or Capitalized Lease Obligations and the
related asset acquired or retained on a pro forma basis;




(vii) Attributable Debt in respect of Sale/Leaseback Transactions after the Closing
Date in an aggregate principal amount not to exceed $100 million;




(viii) Indebtedness of the Parent or the Company owed to an Unrestricted Subsidiary
consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness described in
clause (vi) above; provided, however, that any such Refinancing Indebtedness shall be
included in computing the maximum amount of Indebtedness permitted under such clause; or




(ix) Indebtedness (other than Indebtedness permitted to be Incurred pursuant to Section
4.03(a) or any other clause of this Section 4.03(b)) in an aggregate principal amount on the
date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this
clause (ix) and then outstanding, will not exceed $100 million.



(c) Notwithstanding any other provision of this Section 4.03, the maximum amount of
Indebtedness that the Parent or any Restricted Subsidiary may Incur pursuant to this Section 4.03
shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of
currencies.



(d) For purposes of determining the outstanding principal amount of any particular
Indebtedness Incurred pursuant to this Section 4.03:




(i) Indebtedness Incurred pursuant to the Credit Agreement prior to or on the Closing
Date shall be treated as Incurred pursuant to Section 4.03(b)(i);




(ii) Indebtedness permitted by this Section 4.03 need not be permitted solely by
reference to one provision permitting such Indebtedness but may be permitted in part by one
such provision and in part by one or more other provisions of this Section 4.03 permitting
such Indebtedness; and




(iii) in the event that Indebtedness meets the criteria of more than one of the types
of Indebtedness described in this Section 4.03, the Parent, in its sole discretion, may
classify and from time to time reclassify such Indebtedness and only be required to include
the amount of such Indebtedness in one of such clauses as so classified or reclassified.



SECTION 4.04 Limitation on Restricted Payments. (a) The Parent will not, and will
not permit any Restricted Subsidiary, directly or indirectly, to:




(i) declare or pay any dividend, make any distribution on or in respect of its Capital
Stock or make any similar payment (including any payment in connection with any merger or
consolidation involving the Parent, or any Subsidiary of the Parent) to the direct or
indirect holders of its Capital Stock, except (x) dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and (y) dividends or distributions
payable to the Parent or a Restricted Subsidiary (and, if such Restricted Subsidiary has
holders of its Capital Stock other than the Parent or other Restricted Subsidiaries, to such
holders on a pro rata basis);




(ii) purchase, repurchase, redeem, retire or otherwise acquire for value any Capital
Stock of the Parent or any Restricted Subsidiary held by Persons other than the Parent or a
Restricted Subsidiary;




(iii) purchase, repurchase, redeem, retire, defease or otherwise acquire for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of Subordinated Obligations acquired in
anticipation of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition); or




(iv) make any Investment (other than a Permitted Investment) in any Person,



(any such dividend, distribution, payment, purchase, redemption, repurchase, defeasance,
retirement, or other acquisition or Investment being herein referred to as a “Restricted Payment”)
if at the time the Parent or such Restricted Subsidiary makes such Restricted Payment:




(1) a Default will have occurred and be continuing (or would result therefrom);




(2) after giving effect to the proposed Restricted Payment on a pro forma
basis, the Parent could not Incur at least $1.00 of additional Indebtedness under
Section 4.03(a); or




(3) the aggregate amount of such Restricted Payment and all other Restricted
Payments declared or made subsequent to the Closing Date would exceed the sum,
without duplication, of:




(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from January 1, 2008 to the end of the
most recent fiscal quarter ending prior to the date of such Restricted
Payment for which financial information is publicly available (or, in case
such Consolidated Net Income will be a deficit, minus 100% of such deficit);




(B) the aggregate Net Cash Proceeds received by the Parent or the
Company from the issue or sale of its Capital Stock (other than Disqualified
Stock or in respect of Excluded Contributions) subsequent to the Closing
Date (other than an issuance or sale to (x) a Restricted Subsidiary of the
Parent or (y) an employee stock ownership plan or other trust established by
the Parent or any of its Restricted Subsidiaries);




(C) the amount by which Indebtedness of the Parent or the Restricted
Subsidiaries is reduced on the Parent’s Consolidated balance sheet upon the
conversion or exchange (other than by a Restricted Subsidiary of the Parent)
subsequent to the Closing Date of any Indebtedness of the Parent or the
Restricted Subsidiaries issued after the Closing Date which is convertible
or exchangeable for Capital Stock (other than Disqualified Stock) of the
Parent (less the amount of any cash or the Fair Market Value of other
property distributed by the Parent or any Restricted Subsidiary upon such
conversion or exchange);




(D) the amount equal to the net reduction in Investments (other than
Permitted Investments) resulting from (x) payments of dividends, repayments
of the principal of loans or advances or other transfers of assets to the
Parent or any Restricted Subsidiary in respect of such Investments or (y)
the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of “Investment”) not to
exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments previously made by the Parent or any Restricted Subsidiary in
such Unrestricted Subsidiary, which amount was included in the calculation
of the amount of Restricted Payments;




(E) 100% of any cash dividends and other cash distributions received by
the Parent, the Company and any Restricted Subsidiary from an Unrestricted
Subsidiary subsequent to March 31, 2008, to the extent not included in
Consolidated Net Income pursuant to Section 4.04(a)(3)(A) or taken into
account pursuant to Section 4.04(a)(3)(D); and




(F) $300 million.




(b) The provisions of Section 4.04(a) shall not prohibit:




(i) any purchase, repurchase, redemption, retirement or other acquisition for value of
any Subordinated Obligations, or any Capital Stock of the Parent made by exchange for, or
out of the proceeds of the substantially concurrent sale or issuance of, Capital Stock of
the Parent (other than Disqualified Stock and other than Capital Stock issued or sold to a
Restricted Subsidiary of the Parent or an employee stock ownership plan or other trust
established by the Parent or any of its Subsidiaries); provided, however,
that:




(1) such purchase, repurchase, redemption, retirement or other acquisition for
value will be excluded in the calculation of the amount of Restricted Payments, and




(2) the Net Cash Proceeds from such sale applied in the manner set forth in
this clause (i) will be excluded from the calculation of amounts under Section
4.04(a)(3)(B);




(ii) any prepayment, repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of any Subordinated Obligations made by exchange
for, or out of the proceeds of the substantially concurrent sale of, Subordinated
Obligations that are permitted to be Incurred pursuant to Section 4.03; provided,
however, that such prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value will be excluded in the calculation of
the amount of Restricted Payments;




(iii) any prepayment, repayment, any purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of Subordinated Obligations from Net Available
Cash to the extent permitted by Section 4.06; provided, however, that such
prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other
acquisition for value will be excluded in the calculation of the amount of Restricted
Payments;




(iv) dividends paid within 60 days after the date of declaration thereof if at such
date of declaration such dividends would have complied with this Section 4.04;
provided, however, that such dividends will be included in the calculation
of the amount of Restricted Payments;




(v) (1) dividends paid by the Parent with respect to outstanding shares of its
Preferred Stock outstanding on the Closing Date in amounts each year which do not exceed $20
million; provided, however, that such dividends will be included in the
calculation of the amount of Restricted Payments; and (2) dividends payable on Disqualified
Stock Incurred in accordance with the terms of this Indenture and which are included as
interest expense in the calculation of Consolidated Interest Expense; provided,
however, that such dividends will be exluded in the calculation of the amount of
Restricted Payments;




(vi) Investments that are made with Excluded Contributions; provided,
however, that such Investments will be excluded in the calculation of the amount of
Restricted Payments; or




(vii) any purchase, repurchase, redemption, retirement or other acquisition for value
of shares of, or options to purchase shares of, common stock of the Parent or any of its
Subsidiaries from employees, former employees, directors or former directors of the Parent
or any of its Subsidiaries (or permitted transferees of such employees, former employees,
directors or former directors) pursuant to the terms of agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of Directors under which
such individuals purchase or sell, or are granted the option to purchase or sell, shares of
such common stock; provided, however, that the aggregate amount of such
purchases, repurchases, redemptions, retirements and other acquisitions for value as of any
date shall not exceed the amount obtained by multiplying the number of 12 month periods from
and after the Closing Date by $10 million (with a proration for any period of less than 12
months); and provided further, however, that such purchases,
repurchases, redemptions, retirements and other acquisitions for value shall be excluded in
the calculation of the amount of Restricted Payments.




(c) Any amount referred to in this Section 4.04 which is not cash shall be valued in
good faith by a responsible financial or accounting officer of the Company or the Parent if
less than $25 million and by the Board of Directors if $25 million or more.



SECTION 4.05 Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Parent will not, and will not permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to:




(a) pay dividends or make any other distributions on its Capital Stock or pay any
Indebtedness or other obligations owed to the Parent or any Restricted Subsidiary;




(b) make any loans or advances to the Parent or any Restricted Subsidiary; or




(c) transfer any of its property or assets to the Parent or any Restricted Subsidiary,
except:




(i) any encumbrance or restriction pursuant to applicable law or an agreement in
effect at or entered into on the Closing Date;




(ii) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the
Parent or another Restricted Subsidiary (other than Indebtedness Incurred as
consideration in, in contemplation of, or to provide all or any portion of the funds
or credit support utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by the Parent) and outstanding on such date;




(iii) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause
(i) or (ii) of this Section 4.05(c) or this clause (iii) or contained in any
amendment to an agreement referred to in clause (i) or (ii) of this Section 4.05(c)
or this clause (iii); provided, however, that the encumbrances and
restrictions contained in any such Refinancing agreement or amendment are no less
favorable to the Holders than the encumbrances and restrictions contained in such
predecessor agreements;




(iv) in the case of this clause (c), any encumbrance or restriction




(A) that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or
similar contract, or




(B) contained in security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restriction restricts
the transfer of the property subject to such security agreements; and




(v) with respect to a Restricted Subsidiary, any restriction imposed pursuant to
an agreement entered into for the sale or disposition of all or substantially all the
Capital Stock or assets of such Restricted Subsidiary pending the closing of such
sale or disposition.



SECTION 4.06 Limitation on Sales of Assets and Capital Stock. (a) The Parent will
not, and will not permit any Restricted Subsidiary to, make any Asset Disposition unless:




(i) the Parent or any Restricted Subsidiary receives consideration (including by way of
relief from, or by any other Person assuming sole responsibility for, any liabilities,
contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair
Market Value of the shares and assets subject to such Asset Disposition;




(ii) at least 75% of the consideration thereof received by the Parent or any Restricted
Subsidiary is in the form of cash; and




(iii) an amount equal to 100% of the Net Available Cash from such Asset




Disposition is applied by the Parent (or any Restricted Subsidiary):




(1) first, to the extent the Company elects (or is required by the
terms of any Indebtedness) to prepay, repay, purchase, repurchase, redeem, retire,
defease or otherwise acquire for value Indebtedness outstanding under the Credit
Agreement within 360 days after the later of the date of such Asset Disposition or
the receipt of such Net Available Cash;




(2) second, to the extent of the balance of Net Available Cash after
application in accordance with clause (1), to the extent the Parent or any
Restricted Subsidiary elects, to reinvest in Additional Assets (including by means
of an Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Parent or another Restricted Subsidiary) within 360 days from
the later of such Asset Disposition or the receipt of such Net Available Cash;




(3) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (1) and (2), to make an Offer as defined in
Section 4.06(b) to purchase Securities pursuant to and subject to the conditions set
forth in Section 4.06(b); provided, however, that if the Parent or
the Company elects (or is required by the terms of any other Senior Indebtedness),
such Offer may be made ratably to purchase the Securities and other Senior
Indebtedness of the Parent, the Company or any Note Guarantor; and




(4) fourth, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (1), (2) and (3), for any general
corporate purpose permitted by the terms of this Indenture;



provided, however, that in connection with any prepayment, repayment, purchase,
repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness
pursuant to clause (1) or (3) above, the Parent or such Restricted Subsidiary will retire such
Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired,
defeased or otherwise acquired for value.



Notwithstanding the foregoing provisions of this Section 4.06(a), the Parent and the
Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with
this Section 4.06(a) except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not applied in accordance with this Section 4.06(a) exceeds $50 million.



For the purposes of this Section 4.06(a), the following are deemed to be cash: (A) the
assumption of Indebtedness of the Parent or any Restricted Subsidiary (other than any Preferred
Stock, including Disqualified Stock, constituting Indebtedness) and the release of the Parent or
such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition, and (B) securities received by the Parent or any Restricted Subsidiary from the
transferee that are promptly converted by the Parent or such Restricted Subsidiary into cash.



(b) In the event of an Asset Disposition that requires the purchase of Securities (and other
Senior Indebtedness) pursuant to Section 4.06(a)(iii)(3), the Parent or the Company will be
required (i) to purchase Securities tendered pursuant to an offer by the Company for the Securities
(the “Offer”) at a purchase price of 100% of their principal amount plus accrued and unpaid
interest thereon, if any, to the date of purchase (subject to the right of Holders of record on the
relevant date to receive interest due on the relevant interest payment date) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in Section 4.06(c) and
(ii) to purchase other Senior Indebtedness of the Parent, the Company or any Note Guarantor on the
terms and to the extent contemplated thereby (provided that in no event shall the Parent or
the Company offer to purchase such other Senior Indebtedness at a purchase price in excess of 100%
of its principal amount, plus accrued and unpaid interest thereon). If the aggregate purchase price
of Securities (and other Senior Indebtedness) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Securities (and other Senior Indebtedness), the
Parent or the Company will apply the remaining Net Available Cash in accordance with Section
4.06(a)(iii)(4). The Parent and the Company will not be required to make an Offer for Securities
(and other Senior Indebtedness) pursuant to this Section 4.06 if the Net Available Cash available
therefor (after application of the proceeds as provided in clauses (1) and (2) of Section
4.06(a)(iii)) is less than $25 million in the aggregate for all Asset Dispositions after the
Closing Date.



(c) (i) Promptly, and in any event within 10 days after the Parent or the Company becomes
obligated to make an Offer, the Parent or the Company shall be obligated to deliver to the Trustee
and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to
have his Securities purchased by the Parent or the Company either in whole or in part (subject to
prorating as hereinafter described in the event the Offer is oversubscribed) in integral multiples
of $1,000 of principal amount, at the applicable purchase price. The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of such notice (the
“Purchase Date”) and shall contain or incorporate by reference such information concerning the
business of the Parent and the Company as the Parent and the Company in good faith believe will
enable such Holders to make an informed decision (which at a minimum shall include (1) the most
recently filed Annual Report on Form 10-K (including audited consolidated financial statements) of
the Parent, the most recent subsequently filed Quarterly Report on Form 10-Q and any Current Report
on Form 8-K of the Parent filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or corresponding
successor reports), (2) a description of material developments in the Parent’s business subsequent
to the date of the latest of such reports, and (3) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Securities pursuant to the
Offer, together with the address referred to in clause (iii).



(ii) Not later than the date upon which written notice of an Offer is delivered to the Trustee
as provided above, the Parent shall deliver to the Trustee an Officers’ Certificate as to (1) the
amount of the Offer (the “Offer Amount”), (2) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (3) the compliance of such
allocation with the provisions of Section 4.06(a). On or prior to the purchase date, the Parent or
the Company shall irrevocably deposit with the Trustee or with a paying agent (or, if the Parent
or the Company is acting as its own paying agent, segregate and hold in trust) an amount equal to
the Offer Amount to be invested in Temporary Cash Investments according to the directions of the
Company and to be held for payment in accordance with the provisions of this Section. Upon the
expiration of the period for which the Offer remains open (the “Offer Period”), the Parent or the
Company shall deliver to the Trustee for cancellation the Securities or portions thereof that have
been properly tendered to and are to be accepted by the Parent or the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the Offer Amount delivered
by the Parent or the Company to the Trustee is greater than the purchase price of the Securities
tendered, the Trustee shall deliver the excess to the Parent or the Company, as applicable,
immediately after the expiration of the Offer Period for application in accordance with this
Section 4.06.



(iii) Holders electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Parent or the Company, as applicable, at
the address specified in the notice at least three Business Days prior to the Purchase Date.
Holders shall be entitled to withdraw their election if the Trustee or the Parent or the Company,
as applicable, receives not later than one Business Day prior to the Purchase Date a telegram,
facsimile transmission or letter setting forth the name of the Holder, the principal amount of the
Security which was delivered by the Holder for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration of the Offer Period
the aggregate principal amount of Securities included in the Offer surrendered by Holders thereof
exceeds the Offer Amount, the Parent or the Company shall select the Securities to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate by the Parent or the Company
so that only Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities surrendered.



(iv) At the time the Parent or the Company delivers to the Trustee Securities which are to be
accepted for purchase, the Parent shall also deliver an Officers’ Certificate stating that such
Securities are to be accepted by the Parent or the Company pursuant to and in accordance with the
terms of this Section. A Security shall be deemed to have been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering
Holder.



(v) The Parent and the Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with
the repurchase of Securities pursuant to this Section 4.06. To the extent that the provisions of
any securities laws or regulations conflict with provisions of this Section 4.06, the Parent and
the Company will comply with the applicable securities laws and regulations and will not be deemed
to have breached their obligations under this Section 4.06 by virtue thereof.



SECTION 4.07 Limitation on Transactions with Affiliates. (a) The Parent will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any
transaction or series of related transactions with any Affiliate of the Parent, including the
Incurrence of Indebtedness by the Parent or any Restricted Subsidiary owing to any such Affiliate
which is permitted to be Incurred pursuant to Section 4.03 (a “Borrowing from an Affiliate”), and
including the purchase, sale, lease or exchange of any property or the rendering of any service
(together with a Borrowing from an Affiliate, an “Affiliate Transaction”) unless such transaction
is on terms:




(i) that are no less favorable to the Parent or such Restricted Subsidiary, as the case
may be, than those that could be obtained at the time of such transaction in arm’s-length
dealings with a Person who is not such an Affiliate, as determined by a responsible
financial or accounting Officer of the Parent,




(ii) that, in the event such Affiliate Transaction, other than a Borrowing from an
Affiliate, involves an aggregate amount in excess of $25 million, or in the event a
Borrowing from an Affiliate involves an aggregate amount in excess of $100 million,




(1) are set forth in writing, and




(2) have been approved by a majority of the members of the Board of Directors
having no personal stake in such Affiliate Transaction, and




(iii) that, in the event such Affiliate Transaction other than a Borrowing from an
Affiliate involves an amount in excess of $100 million, have been determined by a nationally
recognized appraisal or investment banking firm to be fair, from a financial standpoint, to
the Parent and its Restricted Subsidiaries.




(b) The provisions of Section 4.07(a) will not prohibit:




(i) any Restricted Payment permitted to be paid pursuant to Section 4.04;




(ii) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors;




(iii) the grant of stock options or similar rights to employees and directors of the
Parent pursuant to plans approved by the Board of Directors;




(iv) loans or advances to employees in the ordinary course of business in accordance
with past practices of the Parent, but in any event not to exceed $5.0 million in the
aggregate outstanding at any one time;




(v) Stock Purchase Loans, but in any event not to exceed $3.0 million in the aggregate
outstanding at any one time;




(vi) the payment of reasonable fees to directors of the Parent and its Subsidiaries
who are not employees of the Parent or its Subsidiaries;




(vii) any transaction between the Parent and a Wholly Owned Restricted Subsidiary or
between Wholly Owned Restricted Subsidiaries;




(viii) Permitted Property Swaps; or




(ix) any lease of locomotives or rolling stock, and any transaction relating to the
provision of transportation or transportation-related services, between the Company or any
Restricted Subsidiaries on the one hand and KCSM or any of its Affiliates on the other hand,
if such lease or transaction meets the requirements of Section 4.07(a)(i), as determined in
good faith by a responsible financial or accounting officer of the Parent.



SECTION 4.08 Change of Control. (a) Upon a Change of Control, each Holder will have
the right to require the Company to purchase all or any part of such Holder’s Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in accordance with the
terms contemplated in Section 4.08(b); provided, however, that notwithstanding the
occurrence of a Change of Control, the Company shall not be obligated to purchase the Securities
pursuant to this Section 4.08 in the event that it has exercised its right to redeem all the
Securities under paragraph 5 of the Securities.



(b) Within 30 days following any Change of Control (except as provided in the proviso to the
first sentence of Section 4.08(a)), the Company shall mail a notice to each Holder with a copy to
the Trustee (the “Change of Control Offer”) stating:




(i) that a Change of Control has occurred and that such Holder has the right to require
the Company to purchase all or a portion of such Holder’s Securities at a purchase price in
cash equal to 101 % of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest on the relevant interest payment date);




(ii) the circumstances and relevant facts and financial information regarding such
Change of Control;




(iii) the purchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and




(iv) the instructions determined by the Company, consistent with this Section 4.08,
that a Holder must follow in order to have its Securities purchased.



(c) Holders electing to have a Security purchased shall be required to surrender the Security,
with an appropriate form duly completed, to the Company, at the address specified in the notice, at
least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives, not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security purchased. Holders
whose Securities are purchased only in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered.



(d) On the purchase date, all Securities purchased by the Company under this Section shall be
delivered to the Trustee for cancellation, and the Company shall pay the purchase price plus
accrued and unpaid interest to the Holders entitled thereto.



(e) Notwithstanding the foregoing provisions of this Section, the Company will not be required
to make a Change of Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times, and otherwise in compliance with the requirements set
forth in Section 4.08(b) applicable to a Change of Control Offer made by the Company and purchases
all Securities validly tendered and not withdrawn under such Change of Control Offer.



(f) At the time the Company delivers Securities to the Trustee which are to be accepted for
purchase, the Company shall also deliver an Officers’ Certificate stating that such Securities are
to be accepted by the Company pursuant to and in accordance with the terms of this Section 4.08. A
Security shall be deemed to have been accepted for purchase at the time the Trustee, directly or
through an agent, mails or delivers payment therefor to the surrendering Holder.



(g) Prior to any Change of Control Offer, the Company shall deliver to the Trustee an
Officers’ Certificate stating that all conditions precedent contained herein to the right of the
Company to make such offer have been complied with.



(h) The Company will comply, to the extent applicable, with the requirements of Section 14(e)
of the Exchange Act and any other securities laws or regulations in connection with the repurchase
of Securities pursuant to this Section 4.08. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section 4.08, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations
under this Section 4.08 by virtue thereof.



SECTION 4.09 Compliance Certificate. The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Company an Officers’ Certificate, one of
the signers of which shall be the principal executive, principal accounting or principal financial
officer of the Company stating that in the course of the performance by the signers of their duties
as Officers of the Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the certificate shall
describe the Default, its status and what action the Company is taking or proposes to take with
respect thereto. The Company also shall comply with Section 314(a)(4) of the TIA.



SECTION 4.10 Future Note Guarantors. The Parent will cause (i) at any time that the
Credit Agreement is in effect, each Subsidiary of the Parent (other than the Company, KCS Holdings
I, Inc., KCS Ventures I, Inc., The Kansas City Northern Railway Company and Veals, Inc.) that
enters into a Guarantee of any Indebtedness that may be Incurred under the Credit Agreement and
(ii) at any time that the Credit Agreement is not in effect, each domestic Restricted Subsidiary of
the Parent (other than the Company, KCS Holdings I, Inc., KCS Ventures I, Inc., The Kansas City
Northern Railway Company and Veals, Inc.) that enters into a Guarantee of any other obligations of
the Parent or any of its domestic Subsidiaries, to execute and deliver to the Trustee a
supplemental indenture substantially in the form of Exhibit B pursuant to which such Subsidiary
will Guarantee payment of the Securities. Each Note Guarantee will be limited to an amount not to
exceed the maximum amount that can be Guaranteed by that Note Guarantor without rendering the Note
Guarantee, as it relates to such Note Gurantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, or similar laws affecting the rights of creditors
generally.



SECTION 4.11 [Intentionally Omitted]



SECTION 4.12 Further Instruments and Acts. Upon request of the Trustee, the Company
shall execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.



SECTION 4.13 Limitation on Liens. The Parent will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature
whatsoever on any of its property or assets (including Capital Stock of a Restricted Subsidiary),
whether owned at the Closing Date or thereafter acquired, other than Permitted Liens, without
effectively providing that the Securities shall be secured equally and ratably with (or prior to)
the obligations so secured for so long as such obligations are so secured; provided,
however, that the Parent and any Restricted Subsidiary may Incur other Liens to secure
Indebtedness as long as the amount of outstanding Indebtedness secured by Liens Incurred pursuant
to this proviso does not exceed the greater of $100 million or 5% of Consolidated Net Tangible
Assets, as determined based on the Consolidated balance sheet of the Parent as of the end of the
most recent fiscal quarter prior to such Incurrence for which financial information is publicly
available.



SECTION 4.14 Limitation on Sale/Leaseback Transactions. The Parent will not, and
will not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with
respect to any property unless:




(a) the Parent or such Restricted Subsidiary would be entitled to Incur Indebtedness in
an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction
pursuant to Section 4.03; and




(b) the net proceeds received by the Parent or such Restricted Subsidiary in connection
with such Sale/Leaseback Transaction are at least equal to the Fair Market Value of such
property; and




(c) the transfer of such property is permitted by, and the Parent applies the proceeds
of such transaction in compliance with, Section 4.06.



SECTION 4.15 Covenant Termination. From and after any time that (a) the Securities
have an Investment Grade Rating from both of the Rating Agencies and (b) no Default or Event of
Default has occurred and is continuing under this Indenture, the Parent and the Restricted
Subsidiaries will not be subject to the following provisions of the Indenture: Sections 4.03, 4.04,
4.05, 4.06, 4.07, 4.14 and 5.01(a)(iii). The Parent shall provide prompt written notice to the
Trustee of any such change in the ratings of the Securities by the Ratings Agencies. The Trustee
shall not be required to notify the Holders of any such changes.




ARTICLE 5




Successor Company



SECTION 5.01 When Company May Merge or Transfer Assets. (a) Neither the Company nor
any Note Guarantor will consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:




(i) the resulting, surviving or transferee Person (the “Successor Company”) shall be a
corporation, partnership or limited liability company organized and existing under the laws
of the United States of America, any state thereof or the District of Columbia (or in the
case of a Note Guarantor, a corporation, partnership or limited liability company organized
and existing under the laws of the jurisdiction under which such Note Guarantor was
organized) and the Successor Company (if not the Company or a Note Guarantor) shall
expressly assume, by a supplemental indenture hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company or such Note
Guarantor, as the case may be, under the Securities and this Indenture;




(ii) immediately after giving effect to such transaction (and treating any Indebtedness
which becomes an obligation of the Successor Company, the Parent or any Restricted
Subsidiary as a result of such transaction as having been Incurred by the Successor Company,
the Parent or such Restricted Subsidiary at the time of such transaction), no Default shall
have occurred and be continuing;




(iii) immediately after giving effect to such transaction, the Parent (or the Successor
Company to the Parent, as applicable) would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);



(iv) the Parent shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture
(if any) comply with this Indenture; and



(v) the Parent shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such transaction and will be subject to U.S. federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such transaction had not
occurred.



The Successor Company will succeed to, and be substituted for, and may exercise every right
and power of the Company or Note Guarantro, as the case may be, under the Indenture, but the
predecessor in the case of a conveyance, transfer or lease of all or substantially all of its
assets will not be released from the obligation to pay the principal of and interest on the
Securities.



(b) Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or any Note Guarantor;
(ii) any Restricted Subsidiary that is not a Note Guarantor may consolidate with, merge into or
transfer all or part of its properties and assets to any other Restricted Subsidiary that is not a
Note Guarantor; and (iii) the Parent or the Company may merge with an Affiliate incorporated solely
for the purpose of reincorporating the Parent or the Company, as the case may be, in another
jurisdiction to realize tax or other benefits.




ARTICLE 6




Defaults and Remedies




SECTION 6.01 Events of Default. An “Event of Default” occurs if:



(a) the Company defaults in any payment of interest on any Security when the same becomes due
and payable, and such default continues for a period of 30 days;



(b) the Company defaults in the payment of the principal of any Security when the same becomes
due and payable at its Stated Maturity, upon required redemption or repurchase, upon declaration or
otherwise;



(c) the Parent or any Restricted Subsidiary fails to comply with Section 5.01 or Section 4.08;



(d) the Parent or any Restricted Subsidiary fails to comply with any of its covenants (other
than those contained in Section 5.01 or 4.08) contained in the Securities or this Indenture (other
than a failure to purchase Securities) and such failure continues for 60 days after the notice
specified below;



(e) Indebtedness of the Parent or any Significant Subsidiary is not paid within any applicable
grace period after final maturity or the acceleration by the holders thereof because of a default
and the total amount of such Indebtedness unpaid or accelerated exceeds $50 million or its foreign
currency equivalent and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration;



(f) the Parent, the Company or any Significant Subsidiary pursuant to or within the meaning of
any Bankruptcy Law:




(i) commences a voluntary case;




(ii) consents to the entry of an order for relief against it in an involuntary
case;




(iii) consents to the appointment of a Custodian of it or for any substantial
part of its property; or




(iv) makes a general assignment for the benefit of its creditors;



or takes any comparable action under any foreign laws relating to insolvency;



(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:




(i) is for relief against the Parent, the Company or any Significant Subsidiary
in an involuntary case;




(ii) appoints a Custodian of the Parent, the Company or any Significant
Subsidiary or for any substantial part of its property; or




(iii) orders the winding up or liquidation of the Parent, the Company or any
Significant Subsidiary;



or any similar relief is granted under any foreign laws; and the order or decree remains unstayed
and in effect for 60 days;



(h) any final judgment or decree for the payment of money in excess of $50 million or its
foreign currency equivalent (after deducting any amount of the final judgment or decree that may be
covered under any insurance policies of the Parent or Subsidiary) is rendered against the Parent or
any Significant Subsidiary and either (i) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (ii) there is a period of 60 days following the entry of
such judgment or decree during which such judgment or decree is not discharged, waived or the
execution thereof stayed, provided a stay of enforcement of such final judgment or order by reason
of a pending appeal or otherwise shall not be in effect at the end of such 60 day period; or



(i) any Note Guarantee ceases to be in full force and effect (except as contemplated by the
terms hereof) or any Note Guarantor or Person acting by or on behalf of such Note Guarantor denies
or disaffirms such Note Guarantor’s obligations under this Indenture or any Note Guarantee and such
Default continues for 10 days after receipt of the notice specified below.



The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.



The term “Bankruptcy Law” means Title 11, United States Code, or any similar federal
or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.



A default under clauses (d) or (i) will not constitute an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company and the Trustee of the Default and the Company or the Note Guarantor,
as applicable, does not cure such Default within the time specified in clauses (d) or (i) hereof
after receipt of such notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a “Notice of Default”.



The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written
notice in the form of an Officers’ Certificate of any event which is, or with the giving of notice
or the lapse of time or both would become, an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.



SECTION 6.02 Acceleration. If an Event of Default (other than an Event of Default
specified in Section 6.01(f) or (g) with respect to the Parent or the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities, by notice to the Company, may declare the principal of and accrued but unpaid interest
on all the Securities to be due and payable. Upon such a declaration, such principal and interest
will be due and payable immediately. In the event a declaration of acceleration because an Event
of Default set forth in Section 6.01(e) has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to Section 6.01(e) shall be remedied or cured by the Parent or its
Significant Subsidiary or waived by the holders of the Indebtedness within 60 days after the
declaration of acceleration with respect thereto. If an Event of Default specified in Section
6.01(f) or (g) with respect to the Parent or the Company occurs, the principal of and interest on
all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders. The Holders of a
majority in principal amount of the outstanding Securities by notice to the Trustee may rescind any
such acceleration and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.



SECTION 6.03 Other Remedies. If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of or interest on the
Securities or to enforce the performance of any provision of the Securities or this Indenture.



The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.



SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in principal amount
of the Securities by notice to the Trustee may waive an existing Default and its consequences
except (a) a Default in the payment of the principal of or interest on a Security, (b) a Default
arising from the failure to redeem or purchase any Security when required pursuant to the terms of
this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any consequent right.



SECTION 6.05 Control by Majority. The Holders of a majority in principal amount of
the Securities may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to
Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Holders or
would involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused by taking or not
taking such action.



SECTION 6.06 Limitation on Suits. (a) Except to enforce the right to receive payment
of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect
to this Indenture or the Securities unless:




(i) the Holder gives to the Trustee written notice stating that an Event of Default is
continuing;




(ii) the Holders of at least 25% in principal amount of the outstanding Securities make
a written request to the Trustee to pursue the remedy;




(iii) such Holder or Holders offer to the Trustee security or indemnity satisfactory to
it in its reasonable discretion against any loss, liability or expense;




(iv) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and




(v) the Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day period.



(b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain
a preference or priority over another Holder.



SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of principal of and
interest on the Securities held by such Holder, on or after the respective due dates expressed or
provided for in the Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the consent of such Holder.



SECTION 6.08 Collection Suit by Trustee. If an Event of Default specified in Section
6.01 (a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or any other obligor on the Securities for the
whole amount then due and owing (together with interest on overdue principal and (to the extent
lawful) on any unpaid interest at the rate provided for in the Securities) and the amounts provided
for in Section 7.07.



SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee and the Holders allowed in any judicial proceedings relative to the Company, any
Subsidiary or Note Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section
7.07.



SECTION 6.10 Priorities. If the Trustee collects any money or property pursuant to
this Article 6, it shall pay out the money or property in the following order:




FIRST: to the Trustee for amounts due under Section 7.07;




SECOND: to Holders for amounts due and unpaid on the Securities for principal and
interest, ratably, and without preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest, respectively; and




THIRD: to the Company.



The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section. At least 15 days before such record date, the Trustee shall mail to each Holder and the
Company a notice that states the record date, the payment date and the amount to be paid.



SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities.



SECTION 6.12 Waiver of Stay or Extension Laws. Neither the Company nor any Note
Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company and each Note Guarantor (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.




ARTICLE 7




Trustee



SECTION 7.01 Duties of Trustee. (a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.




(b) Except during the continuance of an Event of Default:




(i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and




(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture.



(c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:




(i) this paragraph does not limit the effect of paragraph (b) of this Section;




(ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts;




(iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05;
and




(iv) no provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.



(d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.



(e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company.



(f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.



(g) Every provision of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section and to the
provisions of the TIA.



SECTION 7.02 Rights of Trustee. (a) In the absence of bad faith, the Trustee may
conclusively rely and shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.



(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.



(c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.



(d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers; provided,
however, that the Trustee’s conduct does not constitute willful misconduct or negligence.



(e) The Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or opinion of such
counsel.



(f) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, note or other paper or document unless requested in writing to do
so by the Holders of not less than a majority in principal amount of the Securities at the time
outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.



(g) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder and each agent, custodian and other
Person employed to act hereunder.



(h) The Trustee may request that the Company deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture.



SECTION 7.03 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Securities and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent or Registrar may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.



SECTION 7.04 Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture, any Note Guarantee or the
Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities,
and it shall not be responsible for any statement of the Company or any Note Guarantor in this
Indenture or in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication. Delivery of reports,
information and documents to the Trustee under Article 4 is for informational purposes only and the
Trustee’s receipt of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including the Company’s
compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely
conclusively on Officers’ Certificates). Except with respect to Sections 4.01, 4.02 and 4.09, the
Trustee shall have no duty to inquire as to the performance of the Company with respect to the
covenants contained in Article Four. The Trustee shall not be charged with knowledge of any Default
or Event of Default other than under Section 6.01 (a) or (b) or of the identity of any Significant
Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee
shall have received notice thereof in accordance with Section 11.02 hereof from the Company, any
Note Guarantor or any Holder.



SECTION 7.05 Notice of Defaults. If a Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder notice of the Default within the
earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written
notice is received by the Trustee. Except in the case of a Default in payment of principal of,
premium (if any) or interest on any Security (including payments pursuant to the redemption
provisions of such Security), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in the interests of
Holders.



SECTION 7.06 Reports by Trustee to Holders. As promptly as practicable after each
May 15 beginning with the May 15 following the Issue Date, and in any event prior to July 15 in
each year, the Trustee shall mail to each Holder a brief report dated as of such May 15 that
complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall
also comply with Section 313(b) of the TIA.



A copy of each report at the time of its mailing to Holders shall be filed with the SEC and
each stock exchange (if any) on which the Securities are listed. The Company agrees to promptly
notify the Trustee whenever the Securities become listed on any stock exchange and of any delisting
thereof.



SECTION 7.07 Compensation and Indemnity. The Company shall pay to the Trustee from
time to time such compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts. The Company and each Note Guarantor, jointly and severally, shall
indemnify the Trustee against any and all loss, liability, damage, claim or expense (including
reasonable attorneys’ fees and expenses) incurred by or in connection with the acceptance or
administration of this trust and the performance of its duties hereunder. The Trustee shall notify
the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however, that any failure to so notify the Company shall not
relieve the Company or any Note Guarantor of its indemnity obligations hereunder. The Company shall
defend the claim and the indemnified party shall provide reasonable cooperation at the Company’s
expense in the defense. Such indemnified parties may have separate counsel and the Company and the
Note Guarantors, as applicable, shall pay the fees and expenses of such counsel; provided,
however, that the Company shall not be required to pay such fees and expenses if it assumes
such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is
no conflict of interest between the Company and the Note Guarantors, as applicable, and such
parties in connection with such defense. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by an indemnified party through such party’s own
willful misconduct, negligence or bad faith.



To secure the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the Trustee other than money
or property held in trust to pay principal of and interest on particular Securities.



The Company’s payment obligations pursuant to this Section shall survive the satisfaction or
discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee. Without prejudice to any other rights available
to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.01(f) or (g) with respect to the Company, the expenses are intended
to constitute expenses of administration under the Bankruptcy Law.



SECTION 7.08 Replacement of Trustee. (a) The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the Securities may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:




(i) the Trustee fails to comply with Section 7.10;



	 	 	 
	(ii)

(iii)

(iv)

	 	the Trustee is adjudged bankrupt or insolvent;

a receiver or other public officer takes charge of the Trustee or its property; or

the Trustee otherwise becomes incapable of acting.






(b) If the Trustee resigns, is removed by the Company or by the Holders of a majority in
principal amount of the Securities and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.



(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.



(d) If a successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the
Securities may, at the expense of the Company, petition any court of competent jurisdiction for the
appointment of a successor Trustee.



(e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is
stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a
Security for at least six months may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.



(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.



SECTION 7.09 Successor Trustee by Merger. If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.



In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Securities or in this Indenture provided that the certificate of
the Trustee shall have.



SECTION 7. 10 Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply
for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA;
provided, however, that there shall be excluded from the operation of Section
310(b)(1) of the TIA any indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if the requirements
for such exclusion set forth in Section 310(b)(1) of the TIA are met.



SECTION 7.11 Preferential Collection of Claims Against Company. The Trustee shall
comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b)
of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the
TIA to the extent indicated.




ARTICLE 8




Discharge of Indenture; Defeasance



SECTION 8.01 Discharge of Liability on Securities; Defeasance. (a) When (i) all
outstanding Securities (other than Securities replaced or paid pursuant to Section 2.08) have been
cancelled or delivered to the Trustee for cancellation or (ii) all outstanding Securities have
become due and payable, whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof, and the Company irrevocably deposits with the Trustee funds in an
amount sufficient, or U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, in the written opinion of a nationally recognized
firm of independent public accountants delivered to the Trustee (which delivery shall only be
required if U.S. Government Obligations have been so deposited), to pay the principal of and
interest on the outstanding Securities when due at maturity or upon redemption of such Securities,
including interest thereon to maturity or such redemption date (other than Securities replaced or
paid pursuant to Section 2.08) and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel and at the
cost and expense of the Company.



(b) Subject to Sections 8.01(c) and 8.02, the Parent and the Company at any time may terminate
(i) all of their obligations under the Securities and this Indenture (“legal defeasance option”) or
(ii) their obligations under Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.10, 4.12, 4.13 and 4.14; and
the operation of Sections 6.01(d), 6.01 (e), 6.01 (f), 6.01 (g) and 6.01(h), in each case, with
respect only to Significant Subsidiaries, and Section 6.01(i) and the operations of Section
5.01(a)(iii) (“covenant defeasance option”). The Parent and the Company may exercise their legal
defeasance option notwithstanding their prior exercise of their covenant defeasance option. In the
event that the Parent and the Company terminate all of their obligations under the Securities and
this Indenture by exercising their legal defeasance option, the obligations under the Note
Guarantees shall each be terminated simultaneously with the termination of such obligations.



If the Parent and the Company exercise their legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Parent and the Company
exercise their covenant defeasance option, payment of the Securities may not be accelerated because
of an Event of Default specified in Section 6.01(d); Sections 6.01(e), 6.01(f) or 6.01(g) (with
respect only to Significant Subsidiaries); or 6.01(h) or because of the failure of the Company to
comply with clause (iii) of Section 5.01(a).



Upon satisfaction of the conditions set forth herein and upon request of the Company, the
Trustee shall acknowledge in writing the discharge of those obligations that the Company
terminates.



(c) Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections 2.04,
2.05, 2.06, 2.07, 2.08, 2.09, 7.07 and 7.08 and in this Article 8 shall survive until the
Securities have been paid in full. Thereafter, the Company’s obligations in Sections 7.07, 8.05
and 8.06 shall survive.



SECTION 8.02 Conditions to Defeasance. (a) The Parent and the Company may exercise
their legal defeasance option or their covenant defeasance option only if:




(i) the Parent and the Company irrevocably deposit in trust with the Trustee money in
an amount sufficient, or U.S. Government Obligations, the principal of and interest on which
will be sufficient, or a combination thereof sufficient, to pay the principal of, and
premium (if any) and interest on, the Securities when due at maturity or redemption, as the
case may be, including interest thereon to maturity or such redemption date;




(ii) the Parent and the Company deliver to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal, premium, if any, and interest if
any, when due on all the Securities to maturity or redemption, as the case may be;




(iii) 123 days pass after the deposit is made and during the 123-day period no Default
specified in Section 6.01(f) or (g) with respect to the Company occurs which is continuing
at the end of the period;




(iv) the deposit does not constitute a default under any other agreement binding on the
Company;




(v) the Parent and the Company deliver to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940;




(vi) in the case of the legal defeasance option, the Parent and the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (1) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or (2) since
the date of this Indenture there has been a change in the applicable U.S. federal income tax
law, in either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred;




(vii) in the case of the covenant defeasance option, the Parent and the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of such deposit
and defeasance and will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such deposit and defeasance
had not occurred; and




(viii) the Parent and the Company deliver to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Securities as contemplated by this Article 8 have been complied with.



(b) Before or after a deposit, the Company may make arrangements satisfactory to the Trustee
for the redemption of Securities at a future date in accordance with Article 3.



SECTION 8.03 Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on the Securities.



SECTION 8.04 Repayment to Company. The Trustee and the Paying Agent shall promptly
turn over to the Company upon request any money or U.S. Government Obligations held by it as
provided in this Article which, in the written opinion of a nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall only be required if
U.S. Government Obligations have been so deposited), are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent discharge or defeasance in
accordance with this Article.



Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of principal or interest
that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to
the Company for payment as general creditors, and the Trustee and the Paying Agent shall have no
further liability with respect to such monies.



SECTION 8.05 Indemnity for Government Obligations. The Company shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited
U.S. Government Obligations or the principal and interest received on such U.S. Government
Obligations.



SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with this Article 8; provided,
however, that, if the Company has made any payment of principal of or interest on any
Securities because of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.



ARTICLE 9




Amendments




SECTION 9.01 Without Consent of Holders. (a) The Company, the Note Guarantors and
the Trustee may amend this Indenture or the Securities without notice to or consent of any Holder:




(i) to cure any ambiguity, omission, defect or inconsistency;



	 	 	 
	(ii)

(iii)

(iv)

	 	to comply with Article 5;

to add additional Guarantees with respect to the Securities;

to secure the Securities;







(v) to add to the covenants of the Parent and the Restricted Subsidiaries for the
benefit of the Holders or to surrender any right or power conferred upon the Parent or the
Company;




(vi) to make any change that does not adversely affect the rights of any Holder;




(vii) to provide for the issuance of Additional Securities, which shall have terms
substantially identical in all material respects to the Original and which shall be treated,
together with any outstanding Original Securities, as a single issue of securities; or




(viii) to comply with any requirement of the SEC in connection with the qualification
of the Indenture under the TIA.



(b) After an amendment under this Section 9.01 becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such notice to all Holders,
or any defect therein, shall not impair or affect the validity of an amendment under this Section
9.01.



SECTION 9.02 With Consent of Holders. (a) The Company, the Note Guarantors and the
Trustee may amend this Indenture or the Securities without notice to any Holder but with the
written consent of the Holders of at least a majority in principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Holder affected, an amendment may not:




(i) reduce the amount of Securities whose Holders must consent to an amendment;




(ii) reduce the rate of or extend the time for payment of interest on any Security;




(iii) reduce the principal of or extend the Stated Maturity of any Security;




(iv) reduce the premium payable upon the redemption of any Security or change the time
at which any Security may be redeemed;




(v) make any Security payable in money other than that stated in the Security;



	 	 	 	 	 
	or

	 	(vi)



(vii)
	 	make any change in Section 6.04 or 6.07 or this sentence of Section 9.02;



modify the Note Guarantees in any manner adverse to the Holders.






(b) It shall not be necessary for the consent of the Holders under this Section 9.02 to
approve the particular form of any proposed amendment, but it shall be sufficient if such consent
approves the substance thereof.



(c) After an amendment under this Section 9.02 becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such notice to all Holders,
or any defect therein, shall not impair or affect the validity of an amendment under this Section
9.02.



SECTION 9.03 Compliance with Trust Indenture Act. Every amendment to this Indenture
or the Securities shall comply with the TIA as then in effect.



SECTION 9.04 Revocation and Effect of Consents and Waivers. (a) A consent to an
amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder
of that Security or any portion of the Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent or waiver is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security
or such portion of the Security if the Trustee receives the notice of revocation before the date on
which the Trustee receives an Officers’ Certificate from the Company certifying that the requisite
number of consents have been received. After an amendment or waiver becomes effective, it shall
bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Company or
the Trustee of the requisite number of consents, (ii) satisfaction of conditions to effectiveness
as set forth in this Indenture and any indenture supplemental hereto containing such amendment or
waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Company
and the Trustee.



(b) The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date is fixed then,
notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall be valid or effective
for more than 120 days after such record date.



SECTION 9.05 Notation on or Exchange of Securities. If an amendment changes the
terms of a Security, the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so determines, in
exchange for the Security the Company shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms. Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment.



SECTION 9.06 Trustee to Sign Amendments. The Trustee shall sign any amendment
authorized pursuant to this Article 9 if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture and that such amendment is the legal, valid and binding
obligation of the Company and the Note Guarantors enforceable against them in accordance with its
terms, subject to customary exceptions, and complies with the provisions hereof (including Section
9.03).



SECTION 9.07 Payment for Consent. Neither the Company nor any Affiliate of the
Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the
time frame set forth in solicitation documents relating to such consent, waiver or agreement.



ARTICLE 10




Note Guarantees




SECTION 10.01 Note Guarantees. (a) Each Note Guarantor hereby jointly and severally
irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, to
each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment
when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all
obligations of the Company under this Indenture (including obligations to the Trustee) and the
Securities, whether for payment of principal of or interest on in respect of the Securities and all
other monetary obligations of the Company under this Indenture and the Securities, and (ii) the
full and punctual performance within applicable grace periods of all other obligations of the
Company, whether for fees, expenses, indemnification or otherwise, under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”).
Each Note Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from each such Note Guarantor, and that each
such Note Guarantor shall remain bound under this Article 10 notwithstanding any extension or
renewal of any Guaranteed Obligation.



(b) Each Note Guarantor waives presentation to, demand of payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each
Note Guarantor waives notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Note Guarantor hereunder shall not be affected by: (i) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other agreement or
otherwise; (ii) any extension or renewal thereof; (iii) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or any of them; (v) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the
ownership of such Note Guarantor, except as provided in Section 10.02(b).



(c) Each Note Guarantor hereby waives any right to which it may be entitled to have its
obligations hereunder divided among the Note Guarantors, such that such Note Guarantor’s
obligations would be less than the full amount claimed. Each Note Guarantor hereby waives any right
to which it may be entitled to have the assets of the Company first be used and depleted as payment
of the Company’s or such Note Guarantor’s obligations hereunder prior to any amounts being claimed
from or paid by such Note Guarantor hereunder. Each Note Guarantor hereby waives any right to which
it may be entitled to require that the Company be sued prior to an action being initiated against
such Note Guarantor.



(d) Each Note Guarantor further agrees that its Note Guarantee herein constitutes a guarantee
of payment, performance and compliance when due (and not a guarantee of collection) and waives any
right to require that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.



(e) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of
each Note Guarantor hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Note Guarantor herein shall not be discharged or impaired or otherwise affected
by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or modification thereof,
by any default, failure or delay, willful or otherwise, in the performance of the obligations, or
by any other act or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of any Note Guarantor or would otherwise operate as a
discharge of any Note Guarantor as a matter of law or equity.



(f) Each Note Guarantor agrees that its Note Guarantee shall remain in full force and effect
until payment in full of all the Guaranteed Obligations. Each Note Guarantor further agrees that
its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation
is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.



(g) In furtherance of the foregoing and not in limitation of any other right which any Holder
or the Trustee has at law or in equity against any Note Guarantor by virtue hereof, upon the
failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as
the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Note Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such
Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only
to the extent not prohibited by law) and (iii) all other monetary obligations of the Company to the
Holders and the Trustee.



(h) Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in
full of all Guaranteed Obligations. Each Note Guarantor further agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any
Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of
any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by
such Note Guarantor for the purposes of this Section 10.01.



(i) Each Note Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any
rights under this Section 10.01.



(j) Upon request of the Trustee, each Note Guarantor shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.



SECTION 10.02 Limitation on Liability. (a) Any term or provision of this Indenture
to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations
guaranteed hereunder by any Note Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Note Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting
the rights of creditors generally.



(b) A Note Guarantee of any Restricted Subsidiary which is a Note Guarantor shall be released
and terminated (i) upon the sale (including by means of a merger) of all of the Capital Stock of
such Note Guarantor made in compliance with the terms of this Indenture and (2) upon any release
and termination of the Guarantee of the Indebtedness outstanding under the Credit Agreement (other
than by reason of repayment and satisfaction of all of the Indebtedness outstanding under the
Credit Agreement) or any other obligations pursuant to Section 4.10(ii). At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument evidencing such release
(in the form provided by the Company).



SECTION 10.03 Successors and Assigns. This Article 10 shall be binding upon each
Note Guarantor and its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by
any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Securities shall automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions of this Indenture.



SECTION 10.04 No Waiver. Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee
and the Holders herein expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 10 at law, in equity, by statute or
otherwise.



SECTION 10.05 Modification. No modification, amendment or waiver of any provision of
this Article 10, nor the consent to any departure by any Note Guarantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Trustee, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Note Guarantor in any case shall entitle such Note Guarantor
to any other or further notice or demand in the same, similar or other circumstances.



SECTION 10.06 Execution of Supplemental Indenture for Future Note Guarantors. Each
Subsidiary which is required to become a Note Guarantor pursuant to Section 4.11 shall promptly
execute and deliver to the Trustee a supplemental indenture in the form of Exhibit B hereto
pursuant to which such Subsidiary shall become a Note Guarantor under this Article 10 and shall
guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an
Officers’ Certificate to the effect that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to
creditors’ rights generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Note Guarantee of such Note Guarantor is a legal, valid and binding
obligation of such Note Guarantor, enforceable against such Note Guarantor in accordance with its
terms, and/or to such other effect as the Trustee may reasonably request.



SECTION 10.07 Non-Impairment. The failure to endorse a Note Guarantee on any
Security shall not affect or impair the validity thereof.



ARTICLE 11




Miscellaneous




SECTION 11.01 Trust Indenture Act Controls. If and to the extent that any provision
of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another
provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to
318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.



SECTION 11.02 Notices. Any notice or communication shall be in writing and delivered
in person or mailed by first-class mail addressed as follows:




if to the Company:




Overnight delivery address:




The Kansas City Southern Railway Company


427 West 12th Street


Kansas City, Missouri 64105




First-class mail address:




The Kansas City Southern Railway Company


P.O. Box 219335


Kansas City, Missouri 64121




Attention: Treasurer




if to the Trustee:




U.S. Bank National Association




225 Asylum Street, 23rd Floor


Hartford, Connecticut 06103




Attention of Corporate Trust Administration



The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.



Any notice or communication mailed to a Holder shall be mailed, first-class mail, to the
Holder at the Holder’s address as it appears on the registration books of the Registrar and shall
be sufficiently given if so mailed within the time prescribed.



Failure to mail a notice or communication to a Holder or any defect therein shall not affect
the sufficiency thereof with respect to other Holders. If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee receives it.



SECTION 11.03 Communication by Holders with Other Holders. Holders may communicate
pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the
protection of Section 312(c) of the TIA.



SECTION 11.04 Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:




(a) an Officers’ Certificate in form reasonably satisfactory to the Trustee stating
that, in the opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and




(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that,
in the opinion of such counsel, all such conditions precedent have been complied with.



SECTION 11.05 Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a covenant or condition provided for in this Indenture
(other than pursuant to Section 4.09) shall include:




(a) a statement that the individual making such certificate or opinion has read such
covenant or condition;




(b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;




(c) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and




(d) a statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with.



SECTION 11.06 When Securities Disregarded. In determining whether the Holders of the
required principal amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Parent, the Company or any Note Guarantor or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Parent,
the Company or any Note Guarantor shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which (i) a Trust Officer of the Trustee actually
knows are so owned or (ii) as to which the Trustee shall have received notice of ownership in
accordance with Section 11.02 hereof shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time shall be considered in any such determination.



SECTION 11.07 Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by, or a meeting of, Holders. The Registrar and the Paying Agent may
make reasonable rules for their functions.



SECTION 11.08 Legal Holidays. A ”Legal Holiday” is a Saturday, a Sunday or any other
day on which banking institutions are not required by law or regulation to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.



SECTION 11.09 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.



SECTION 11.10 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Parent, the Company or any of the Note Guarantors shall not have any
liability for any obligations of the Parent, the Company or any of the Note Guarantors under the
Securities or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for the issue of the
Securities.



SECTION 11.11 Successors. All agreements of the Company and each Note Guarantor in
this Indenture and the Securities shall bind their successors. All agreements of the Trustee in
this Indenture shall bind its successors.



SECTION 11.12 Multiple Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.



SECTION 11.13 Table of Contents; Headings. The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part hereof and shall not modify
or restrict any of the terms or provisions hereof.



5




IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of
the date first written above.



	 
	THE KANSAS CITY SOUTHERN RAILWAY

COMPANY

By /s/ Paul J. Weyandt

	 

	Name: Paul J. Weyandt

Title: Sr. Vice President – Finance and Treasurer

KANSAS CITY SOUTHERN

By /s/ Paul J. Weyandt

	 

	Name: Paul J. Weyandt







	 
	 	 	Title: Sr. Vice President – Finance and Treasurer
	 	 	GATEWAY EASTERN RAILWAY COMPANY
	 	 	By	 	 	 	/s/ Paul J. Weyandt
	 	 	Name: Paul J. Weyandt
	 	 	Title: Vice President and Treasurer





	 
	 	 	PABTEX GP, LLC
	 	 	By /s/ Michael W. Upchurch
	 	 	Name: Michael W. Upchurch






	 	 	Title: Vice President and Chief Financial Officer
of Southern Industrial Services, the sole
member of PABTEX GP, LLC





	 
	PABTEX I, L.P.

By /s/ Michael W. Upchurch

	 

	Name: Michael W. Upchurch








	 	 	Title: Vice President and Chief Financial Officer
of Southern Industrial Services, the sole
member of PABTEX GP, LLC, the general
partner of PABTEX I, L.P.





	 
	SIS BULK HOLDING, INC.

By /s/ Michael W. Upchurch

	 

	Name: Michael W. Upchurch

Title: Vice President and Chief Financial Officer







	 
	 	 	SOUTHERN DEVELOPMENT COMPANY
	 	 	By	 	 	 	/s/ Michael W. Upchurch
	 	 	Name: Michael W. Upchurch
	 	 	Title: Vice President and Chief Financial Officer





	 
	 	 	SOUTHERN INDUSTRIAL SERVICES, INC.
	 	 	By	 	 	 	/s/ Michael W. Upchurch
	 	 	Name: Michael W. Upchurch
	 	 	Title: Vice President and Chief Financial Officer





	 
	 	 	TRANS-SERVE, INC.	 	 
	 	 	By	 	 	 	/s/ Michael W. Upchurch
	 	 	Name: Michael W. Upchurch






	 	 	Title: Vice President and Chief Financial

Officer





6






U.S. BANK NATIONAL ASSOCIATION, as
trustee






	 	 	 
	By

	 	/s/ Michael Hopkins
	 

	 	 
	Name:

	 	Michael Hopkins







	 	 	Title: Vice President





7






APPENDIX A







PROVISIONS RELATING TO ORIGINAL SECURITIES AND ADDITIONAL SECURITIES




1. Definitions




1.1 Definitions



For the purposes of this Appendix A the following terms shall have the meanings indicated
below:



“Definitive Security” means a certificated Security that does not include the Global
Securities Legend.



“Depositary” means The Depository Trust Company, its nominees and their respective successors.



“Global Securities Legend” means the legend set forth under that caption in Exhibit A to this
Indenture.



“Underwriters” means Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, Scotia
Capital (USA) Inc., BMO Capital Markets Corp.and SunTrust Robinson Humphrey, Inc.



“Underwriting Agreement” means (a) the Underwriting Agreement dated December 15, 2008 among
the Company, the Note Guarantors and the Underwriters and (b) any other similar Underwriting
Agreement relating to Additional Securities.




“Securities Act” means the Securities Act of 1933, as amended.



“Securities Custodian” means the custodian with respect to a Global Security (as appointed by
the Depositary) or any successor person thereto, who shall initially be the Trustee.



8



	 	 	 	 	 
	1.2

	 	Other Definitions
	 	

	
 
	 	 
	 	

	Term:

	 	 	 	Defined in Section:
	 

	 	 	 	 
	“Agent Members”

“Global Security”

	 	.......... .....
	 	2.1(c)

2.1(b)







2. The Securities




2.1 Form and Dating



(a) The Original Securities. The Original Securities issued on the date hereof will
be offered and sold by the Company pursuant to the Underwriting Agreement. Additional Securities
offered after the date hereof may be offered and sold by the Company from time to time pursuant to
one or more Underwriting Agreements in accordance with applicable law.



(b) Global Securities. Securities shall be issued on the Closing Date in the form of
one or more permanent global Securities in fully registered form without interest coupons and
bearing the Global Securities Legend (each such Security a “Global Security”), which shall be
deposited on behalf of the purchasers of the Securities represented thereby with the Securities
Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as provided in this Indenture. The
aggregate principal amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its nominee and on the
schedules thereto as hereinafter provided.



(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a Global Security
deposited with or on behalf of the Depositary.



The Company shall execute and the Trustee shall, in accordance with this Section 2.1(c) and
Section 2.2 and pursuant to an order of the Company signed by two Officers, authenticate and
deliver initially one or more Global Securities that (i) shall be registered in the name of the
Depositary for such Global Security or Global Securities or the nominee of such Depositary and (ii)
shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions
or held by the Trustee as Securities Custodian.



Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the Depositary or by the
Trustee as Securities Custodian or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the Depositary or impair, as
between the Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global
Security.



(d) Definitive Securities. Except as provided in Section 2.3 or 2.4, owners of
beneficial interests in Global Securities will not be entitled to receive physical delivery of
certificated Securities.



2.2 Authentication. The Trustee shall authenticate and make available for delivery
upon a written order of the Company signed by two Officers Original Securities for original issue
on the date hereof in an aggregate principal amount of $190,000,000 and, subject to the terms of
this Indenture, Additional Securities in an unlimited amount and such order shall specify the
amount of the Securities to be authenticated and the date on which the original issue of Securities
is to be authenticated. The aggregate principal amount of Securities outstanding at any time is
unlimited under this Indenture. Notwithstanding anything to the contrary in this Appendix or
otherwise in this Indenture, any issuance of Additional Securities after the Closing Date shall be
in a principal amount of at least $10,000,000, whether such Additional Securities are of the same
or a different series than the Original Securities.



2.3 Transfer and Exchange.



(a) Transfer and Exchange of Definitive Securities. When Definitive Securities are
presented to the Registrar with a request:




(i) to register the transfer of such Definitive Securities; or




(ii) to exchange such Definitive Securities for an equal principal amount of Definitive
Securities of other authorized denominations,



the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Definitive
Securities surrendered for transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.



(b) Transfer and Exchange of Global Securities. (i) The transfer and exchange of
Global Securities or beneficial interests therein shall be effected through the Depositary, in
accordance with this Indenture (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a
Global Security shall deliver a written order given in accordance with the Depositary’s procedures
containing information regarding the participant account of the Depositary to be credited with a
beneficial interest in such Global Security or another Global Security and such account shall be
credited in accordance with such order with a beneficial interest in the applicable Global Security
and the account of the Person making the transfer shall be debited by an amount equal to the
beneficial interest in the Global Security being transferred.



(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to
a beneficial interest in another Global Security, the Registrar shall cause to be reflected on its
books and records the date and an increase in the principal amount of the Global Security to which
such interest is being transferred in an amount equal to the principal amount of the interest to be
so transferred, and the Registrar shall cause to be reflected on its books and records the date and
a corresponding decrease in the principal amount of Global Security from which such interest is
being transferred.



(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set
forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depositary
to a nominee of the Depositary, or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.



(c) Legend. (i) Each Definitive Security shall bear the following legend on the face
thereof:




UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR OF SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.




TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
FOREGOING RESTRICTIONS.



(d) Cancellation or Adjustment of Global Security. At such time as all beneficial
interests in a Global Security have either been exchanged for Definitive Securities, transferred,
redeemed, repurchased or cancelled, such Global Security shall be returned by the Depositary to the
Trustee for cancellation or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for Definitive
Securities, transferred in exchange for an interest in another Global Security, redeemed,
repurchased or cancelled, the principal amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is
then the Securities Custodian for such Global Security) with respect to such Global Security, by
the Trustee or the Securities Custodian, to reflect such reduction.



(e) Obligations with Respect to Transfers and Exchanges of Securities. (i) To permit
registrations of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate, Definitive Securities and Global Securities at the Registrar’s request.



(ii) No service charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 3.06,
4.06, 4.08 and 9.05 of this Indenture).



(iii) Prior to the due presentation for registration of transfer of any Security, the Company,
the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose of receiving payment
of principal of and interest on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, the Trustee, the Paying Agent and the Registrar
shall be affected by notice to the contrary.



(iv) All Securities issued upon any transfer or exchange pursuant to the tenns of this
Indenture shall evidence the same debt and shall be entitled to the same benefits under this
Indenture as the Securities surrendered upon such transfer or exchange.



(f) No Obligation of the Trustee. (i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of, or a participant in, the
Depositary or any other Person with respect to the accuracy of the records of the Depositary or its
nominee or of any participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member, beneficial owner or other
Person (other than the Depositary) of any notice (including any notice of redemption or repurchase)
or the payment of any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders under the
Securities shall be given or made only to the registered Holders (which shall be the Depositary or
its nominee in the case of a Global Security). The rights of beneficial owners of any Global
Security shall be exercised only through the Depositary subject to the applicable rules and
procedures of the Depositary. The Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to its members, its participants
and any beneficial owners.



(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Security (including any transfers between or
among Depositary participants or members or beneficial owners of any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express requirements hereof.




2.4 Definitive Securities



(a) A Global Security deposited with the Depositary or with the Trustee as Securities
Custodian pursuant to Section 2.1 shall be transferred to the beneficial owner thereof in the form
of Definitive Securities in an aggregate principal amount equal to the principal amount of such
Global Security, in exchange for such Global Security, only if such transfer complies with Section
2.3 and (i) the Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to be a “clearing
agency” registered under the Exchange Act, and a successor depositary is not appointed by the
Company within 90 days of such notice or after the Company becomes aware of such cessation, or (ii)
an Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of certificated Securities
under this Indenture.



(b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this
Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate principal amount of
Definitive Securities of authorized denominations. Any portion of a Global Security transferred
pursuant to this Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the Depositary shall
direct.



(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Security
may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take under
this Indenture or the Securities.



(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii)
or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive
Securities in fully registered form without interest coupons.



9





EXHIBIT A



[FORM OF FACE OF SECURITY]





[Global Securities Legend]



UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.



10



No. $     




13% Senior Note due 2013




CUSIP No. 485188 AH9



THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation, promises to pay to Cede &
Co., or its registered assigns, the principal sum of Dollars listed on the Schedule of Increases or
Decreases in Global Security attached hereto on December 15, 2013.




Interest Payment Dates: June 15 and December 15.




Record Dates: June 1 and December 1.



Additional provisions of this Security are set forth on the other side of this Security.



IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.




The Kansas City Southern Railway Company




By:




     


Name:


Title:




By:




     


Name:


Title:



11



Dated:




	 	 	TRUSTEE’S CERTIFICATE OF






AUTHENTICATION



U. S. Bank National Association,




as Trustee, certifies


that this is one of the


Securities referred to


in the Indenture.




	 	 	By:     






Authorized Signatory



*/ If the Security is to be issued in global form, add the Global Securities Legend
and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES — SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY”.



12



[FORM OF REVERSE SIDE OF SECURITY]





13% Senior Note due 2013



1. Interest



THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a Missouri corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein called the
“Company”), promises to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company shall pay interest semiannually on June 15 and December 15 of each year,
beginning June 15, 2009. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been paid or duly provided
for, from December 18, 2008 until the principal hereof is due. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.



2. Method of Payment



The Company shall pay interest on the Securities (except defaulted interest) to the Persons
who are registered Holders at the close of business on the June 1 and December 1 next preceding the
interest payment date even if the Securities are cancelled after the record date and on or before
the interest payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and interest in money of the
United States of America that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Securities represented by a Global Security (including
principal, premium and interest) shall be made by wire transfer of immediately available funds to
the accounts specified by The Depository Trust Company or any successor depositary. The Company
will make all payments in respect of a certificated Security (including principal, premium, if any,
and interest) at the office of the Paying Agent, except that, at the option of the Company, payment
of interest may be made by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case of
a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).



3. Paying Agent and Registrar



Initially, U.S. Bank National Association, a national banking association (the “Trustee”),
will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent or
Registrar without notice. The Company or any of its domestically incorporated Wholly Owned
Restricted Subsidiaries may act as Paying Agent or Registrar.



13




4. Indenture



The Company issued the Securities under an Indenture dated as of December 18, 2008 (the
“Indenture”) among the Company, the Note Guarantors and the Trustee. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the
Indenture (the “TIA”). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the
Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for
a statement of such terms and provisions.



The Securities are senior unsecured obligations of the Company unlimited in aggregate
principal amount at any one time outstanding, subject to the conditions and in compliance with the
covenants set forth in the Indenture. This Security is one of the Securities referred to in the
Indenture. The Securities include the Original Securities and any Additional Securities issued
pursuant to the Indenture. The Original Securities and the Additional Securities are treated as a
single class of securities under the Indenture. The Indenture imposes certain limitations on the
ability of the Parent, the Company and the Parent’s Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other distributions,
incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur
Liens and make Asset Sales. The Indenture also imposes limitations on the ability of the Parent,
the Company and each Note Guarantor to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of its property.



To guarantee the due and punctual payment of the principal and interest, if any, on the
Securities and all other amounts payable by the Company under the Indenture and the Securities when
and as the same shall be due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Securities and the Indenture, the Note Guarantors have, jointly and
severally, unconditionally guaranteed the Guaranteed Obligations on a senior basis pursuant to the
terms of the Indenture.



5. Optional Redemption



Except as set forth in this paragraph, the Company may not redeem the Securities. The
Securities will be redeemable, at the option of the Company, in whole at any time or in part from
time to time, before December 15, 2011, at a redemption price equal to the greater of (1) 101% of
the principal amount of the Securities to be redeemed or (2) the sum of the present values of the
remaining scheduled payments of principal and interest on the Securities to be redeemed (not
including the portion of any payments of interest accrued to the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (determined on the third business day preceding the redemption date),
plus, in each case, accrued and unpaid interest thereon to the redemption date.



“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for that redemption date, plus .50%.



“Comparable Treasury Issue” means the United States Treasury security selected by the
Company’s choice of Morgan Stanley & Co. Incorporated or Banc of America Securities LLC, and its
successors, or, if such firm is unwilling or unable to select the applicable Comparable Treasury
Issue, another Reference Treasury Dealer, as having a maturity comparable to the remaining term of
the notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such notes.



“Comparable Treasury Price” means, with respect to any redemption date, the average of the
Reference Treasury Dealer Quotations (as defined below) for that redemption date.



“Reference Treasury Dealer” means each of Morgan Stanley & Co. Incorporated and Banc of
America Securities LLC, and their respective successors, and three other primary U.S. government
securities dealers in New York City selected by the Company (each, a “Primary Treasury Dealer”);
provided however, that if any of the foregoing shall cease to be a Primary Treasury Dealer or is no
longer quoting prices for United States Treasury securities, the Company will substitute another
Primary Treasury Dealer.



“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m. (New York City
time) on the third business day preceding the redemption date.



The Company may also redeem some or all of the Securities on or after December 15, 2011, at
the following redemption prices (expressed as percentages of the principal amount thereof) if
redeemed in the 12-month period commencing on June 1 of the year set forth below, plus, in each
case, accrued and unpaid interest, if any, to the date of redemption (subject to the right of
holders of record on a record date to receive interest due on an interest payment date that is on
or prior to such date of redemption):



	 	 	 	 	 
	Year	 	Percentage
	2011

	 	 	113.000	%
	2012

	 	 	106.500	%






In addition, at any time prior to December 15, 2010, the Company may, on or more occasion,
redeem up to a maximum of 35% of the original aggregate principal amount of the Securities
(calculated giving effect to any issuance of Additional Securities) with the Net Cash Proceeds of
one or more Equity Offerings (i) by the Company or (ii) by Parent to the extent the Net Cash
Proceeds thereof are contributed to the Company or used to purchase Capital Stock (other than
Disqualified Stock) of the Company from the Company, at a redemption price equal to 113.000% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date); provided, however, that after giving effect to
any such redemption, at least 65% of the original aggregate principal amount of the Securities
remains outstanding. Any such redemption shall be made within 60 days of such Equity Offering and
must be made in accordance with the procedures set forth in the Indenture.



6. Sinking Fund




The Securities are not subject to any sinking fund.



7. Notice of Redemption



Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at his or her
registered address. Securities in denominations larger than $1,000 maybe redeemed in part but only
in whole multiples of $1,000. If money sufficient to pay the redemption price of, and accrued and
unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.



8. Repurchase of Securities at the Option of Holders upon Change of Control and Asset 
Dispositions



Upon a Change of Control, any Holder of Securities will have the right, subject to certain
conditions specified in the Indenture, to cause the Company to repurchase all or any part of the
Securities of such Holder at a purchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.



In accordance with Section 4.06 of the Indenture, the Company will be required to offer to
purchase Securities upon the occurrence of certain events.



9. Denominations Transfer; Exchange



The Securities are in registered form without coupons in denominations of $1,000 and whole
multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes
required by law or permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities selected for redemption (except, in the case of a Security to be redeemed
in part, the portion of the Security not to be redeemed) or transfer or exchange any Securities for
a period of 15 days prior to the mailing of a notice of redemption of Securities or 15 days before
an interest payment date.



10. Persons Deemed Owners



The registered Holder of this Security may be treated as the owner of it for all purposes.



11. Unclaimed Money



If money for the payment of principal or interest remains unclaimed for two years, the Trustee
and the Paying Agent shall pay the money back to the Company at its written request unless an
abandoned property law designates another Person. After any such payment, Holders entitled to the
money must look to the Company for payment as general creditors and the Trustee and the Paying
Agent shall have no further liability with respect to such money.



12. Discharge and Defeasance



Subject to certain conditions, the Company at any time may terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest on, the Securities to
redemption or maturity, as the case may be.



13. Amendments, Waiver



Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities
may be amended without prior notice to any Holder but with the written consent of the Holders of at
least a majority in aggregate principal amount of the outstanding Securities and (ii) any default
may be waived with the written consent of the Holders of at least a majority in principal amount of
the outstanding Securities. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Note Guarantors and the Trustee may amend the Indenture or
the Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with
Article 5 of the Indenture; (iii) to add Note Guarantees with respect to the Securities; (iv) to
secure the Securities; (v) to add additional covenants or to surrender rights and powers conferred
on the Company; (vi) to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (vii) to make any change that does not adversely
affect the rights of any Holder; or (viii) to provide for the issuance of Additional Securities.



14. Defaults and Remedies



If an Event of Default occurs (other than an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities may declare the principal
of, and accrued but unpaid interest on, all the Securities to be due and payable. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization of the Company
occurs, the principal of, and interest on, all the Securities shall become immediately due and
payable without any declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the outstanding Securities
may rescind any such acceleration with respect to the Securities and the consequences of any such
acceleration.



If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to
exercise any of the rights or powers under the Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it in
its reasonable discretion against any loss, liability or expense and certain other conditions are
complied with. Except to enforce the right to receive payment of principal, premium (if any) or
interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event of Default is
continuing, (ii) Holders of at least 25% in principal amount of the outstanding Securities have
requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee
security or indemnity satisfactory to it in its reasonable discretion against any loss, liability
or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of
the request and the offer of security or indemnity and (v) the Holders of a majority in principal
amount of the outstanding Securities have not given the Trustee a direction inconsistent with such
request within such 60-day period. Subject to certain restrictions, the Holders of a majority in
principal amount of the outstanding Securities are given the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of exercising any
trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction
that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to
the rights of any other Holder or that would involve the Trustee in personal liability. Prior to
taking any action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused by taking or not
taking such action.



15. Trustee Dealings with the Company



Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Parent, the Company or its Affiliates and may
otherwise deal with the Parent, the Company or its Affiliates with the same rights it would have if
it were not Trustee.



16. No Recourse Against Others



A director, officer, employee or stockholder, as such, of the Parent, the Company or any Note
Guarantor shall not have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.



17. Authentication



This Security shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Security.



18. Abbreviations



Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to
Minors Act).



19. Governing Law



THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.



20. CUSIP Numbers



The Company has caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.




The Company will furnish to any Holder of Securities, upon
written request and without charge to the Holder, a copy of
the Indenture which has in it the text of this
Security.

14


ASSIGNMENT FORM



To assign this Security, fill in the form below:



I or we assign and transfer this Security to



     




(Print or type assignee’s name, address and zip code)



     




(Insert assignee’s soc. sec. or tax I.D. No.)



and irrevocably appoint agent to transfer this Security on the books of the


Company. The agent may substitute another to act for him.



Date:     Your Signature:     



     


Sign exactly as your name appears on the other side of this Security. Signature must be guaranteed
by a participant in a recognized signature guaranty medallion program or other signature guarantor
acceptable to the Trustee.



15




OPTION OF HOLDER TO ELECT PURCHASE



If you want to elect to have this Security purchased by the Company pursuant to Section 4.06
(Asset Disposition) or 4.08 (Change of Control) of the Indenture, check the box:




Asset Disposition ? Change of Control ?



If you want to elect to have only part of this Security purchased by the Company pursuant to
Section 4.06 or 4.08 of the Indenture, state the amount ($1,000 or an integral multiple thereof):



$     



Date:     Your Signature:     




(Sign exactly as your name appears on the other


side of the Security)



Signature Guarantee:     



Signature must be guaranteed by a participant in a recognized signature



guaranty medallion program or other signature guarantor acceptable to



the Trustee



16




[TO BE ATTACHED TO GLOBAL SECURITIES]




SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY



The initial principal amount of this Global Security is $[ ]. The following increases or
decreases in this Global Security have been made:



	 	 	 	 	 	 	 	 	 
	Date of Exchange

	 	Amount of decrease

in Principal Amount

of this Global

Security
	 	Amount of increase

in Principal

Amount of this

Global Security
	 	Principal amount of

this Global

Security following

such decrease or

increase
	 	Signature of

authorized

signatory of

Trustee or

Securities

Custodian






17





EXHIBIT B




FORM OF SUPPLEMENTAL INDENTURE



SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of , among [GUARANTOR] (the
“New Guarantor”), a subsidiary of THE KANSAS CITY SOUTHERN RAILWAY COMPANY (or its successor), a
Missouri corporation (the “Company”), KANSAS CITY SOUTHERN, GATEWAY EASTERN RAILWAY COMPANY, PABTEX
GP, LLC, PABTEX L.P., SIS BULK HOLDING INC., SOUTHERN DEVELOPMENT COMPANY, SOUTHERN INDUSTRIAL
SERVICES, INC., TRANS-SERVE, INC., [OTHER EXISTING GUARANTORS] and U.S. BANK ASSOCIATION, a
national banking association, as trustee under the indenture referred to below (the “Trustee”).




WITNESSETH:



WHEREAS the Company and [OLD GUARANTORS] (the “Existing Guarantors”) have heretofore executed
and delivered to the Trustee an Indenture (the “Indenture”) dated as of December 18, 2008,
providing for the issuance of an unlimited aggregate principal amount of 13% Senior Notes due 2013
(the “Securities”), subject to the conditions and in compliance with the covenants set forth in the
Indenture;



WHEREAS Section 4.11 of the Indenture provides that under certain circumstances the Company is
required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Guarantor shall unconditionally guarantee all the Company’s obligations
under the Securities pursuant to a Note Guarantee on the terms and conditions set forth herein; and



WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the Existing
Guarantors are authorized to execute and deliver this Supplemental Indenture;



NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company, the
Existing Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit
of the holders of the Securities as follows:



1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with
all the Existing Guarantors, to unconditionally guarantee the Company’s obligations under the
Securities on the terms and subject to the conditions set forth in Article 10 of the Indenture and
to be bound by all other applicable provisions of the Indenture and Securities.



2. Ratification of Indenture; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and
all the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of
Securities heretofore or hereafter authenticated and delivered shall be bound hereby.



3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.



4. Trustee Makes No Representation. The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture.



5. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.



6. Effect of Headings. The Section headings herein are for convenience only and shall
not affect the construction hereof.



IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.




[NEW GUARANTOR]




	 	 	 	By






Name:




	 	 	 	Title:






	 	 	 	THE
KANSAS CITY SOUTHERN RAILWAY COMPANY






	 	 	 	By






Name:




	 	 	 	Title:






KANSAS CITY SOUTHERN




	 	 	 	By






Name:




	 	 	 	Title:






GATEWAY EASTERN RAILWAY COMPANY




	 	 	 	By






Name:




	 	 	 	Title:






PABTEX GP, LLC




	 	 	 	By






Name:




	 	 	 	Title:






PABTEX L.P.




	 	 	 	By






Name:




	 	 	 	Title:






SIS BULK HOLDING, INC.




	 	 	 	By






Name:




	 	 	 	Title:






SOUTHERN DEVELOPMENT COMPANY




	 	 	 	By






Name:




	 	 	 	Title:






SOUTHERN INDUSTRIAL SERVICES, INC.




	 	 	 	By






Name:




	 	 	 	Title:






TRANS-SERVE, INC.




	 	 	 	By






Name:




	 	 	 	Title:






[OTHER EXISTING GUARANTORS]




	 	 	 	By






Name:




	 	 	 	Title:






	 	 	 	U.S.
BANK NATIONAL ASSOCIATION,






as Trustee




	 	 	 	By






Name:




	 	 	 	Title:





18





EXHIBIT C




FORM OF NOTE GUARANTEES



[Name of Note Guarantors] (the “Note Guarantors,” which term includes any successor Person
under the Indenture dated as of December 18, 2008 among The Kansas City Southern Railway Company,
as issuer, the Note Guarantors and U.S. Bank National Association, as trustee (the “Indenture”))
has unconditionally guaranteed, to the extent set forth in the Indenture and subject to the
provisions of the Indenture, the due and punctual payment of the principal of, any premium and
interest on the Securities, when and as the same shall become due and payable, whether at maturity,
by acceleration, redemption, repayment or otherwise, all in accordance with the terms set forth in
Article 10 of the Indenture.



Each capitalized term used but not defined herein shall have the meaning ascribed thereto in
the Indenture.



The obligation of the undersigned to the Holders of the Securities and to the Trustee pursuant
to these Note Guarantees and in the Indenture are expressly set forth in the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note Guarantees and all of
the other provisions of the Indenture to which these Note Guarantees relate.



These Note Guarantees shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made or instruments entered into and, in each case,
performed in said state.



IN WITNESS WHEREOF, the Note Guarantors have caused this instrument to be duly executed.




By and on Behalf of:




KANSAS CITY SOUTHERN




By  




Name:




Title:




GATEWAY EASTERN RAILWAY COMPANY




By  




Name:




Title:




PABTEX GP, LLC




By




Name:




Title:



19




PABTEX, L.P.



By  



Name:



Title:



SIS BULK HOLDING, INC.



By  



Name:



Title:



SOUTHERN DEVELOPMENT COMPANY



By  



Name:



Title:



SOUTHERN INDUSTRIAL SERVICES, INC.



By  



Name:



Title:



TRANS-SERVE, INC.



By  



Name:




	 	 	 	Title:






20