KANSAS CITY SOUTHERN 1,494,469 Shares of Common Stock Underwriting Agreement
Exhibit 1.1
1,494,469 Shares of Common Stock
December ___, 2006
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Grupo TMM, S.A., a sociedad anonima organized under the laws of the United Mexican States and
a stockholder (the “Selling Stockholder”) of Kansas City Southern, a Delaware corporation (the
"Company”), proposes to sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (the “Underwriter”), an aggregate
of 1,494,469 shares (the “Shares”) of common stock, par value $0.01 per share (the “Stock”), of the
Company. The Stock, including the Shares, will have attached thereto rights (the “Rights”). The
Rights are to be issued pursuant to a Rights Agreement (the “Rights Agreement”) dated as of
September 29, 2005 between the Company and UMB Bank, n.a., as Rights Agent.
The Company and the Selling Stockholder hereby confirm their agreement with the Underwriter
concerning the purchase and sale of the Shares as follows:
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1. The Company has prepared and filed with the Securities and Exchange Commission (the
"Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-1
(File No.: 333-138831) which contains a form of prospectus to be used in connection with the public
offering and sale of the Shares. Such registration statement, as amended at the time it became
effective, including the information, if any, deemed pursuant to Rule 430A under the Securities Act
to be a part of the registration statement at the time of its effectiveness (the “Rule 430
Information”) is referred to herein as the “Registration Statement”; and as used herein the term
“Prospectus” means the prospectus in the form first used to confirm sales of Shares (or in the form
first made available to the Underwriter by the Company to meet requests of purchasers pursuant to
Rule 173 under the Securities Act) and the term “Preliminary Prospectus” means any preliminary form
of the Prospectus. Any reference in this Agreement to the Registration Statement, any Preliminary
Prospectus, the Time of Sale Information (as defined herein) or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form
S-1 under the Securities Act, and any reference to “amend”, “amendment” or “supplement” with
respect to the Registration Statement, any Preliminary Prospectus, Time of Sale Information (as
defined below) or the Prospectus shall be deemed to refer to and include any documents filed by the
Company under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by
reference therein. Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Registration Statement and the Prospectus.
The Company has prepared the following information (collectively with the information referred
to in the next succeeding sentence, the “Time of Sale Information”): a Preliminary Prospectus dated
December [4], 2006, as amended and supplemented, as of the Applicable Time (as defined below),
including all information incorporated by reference therein, and each free-writing prospectus (as
defined pursuant to Rule 405 under the Securities Act) listed on Annex C hereto. If, subsequent to
the date of this Agreement, the Company and the Underwriter have determined that such information
included an untrue statement of material fact or omitted a statement of material fact necessary to
make the information therein not misleading and have agreed to provide an opportunity to purchasers
to terminate their old contracts and enter into new contracts, then “Time of Sale Information” will
refer to the information available to purchasers at the time of entry into the first such new
contract. “Applicable Time” means [___][A.M./P.M.] New York City time on the date of this
Agreement.
2. Purchase of the Shares by the Underwriter. (a) The Selling Stockholder agrees to
sell the Shares to the Underwriter as provided in this Agreement, and the Underwriter, on the basis
of the representations, warranties and agreements set forth herein and subject to the conditions
set forth herein, agrees, severally and not jointly, to purchase from the Selling Stockholder at a
purchase price per share of $[___] (the “Purchase Price”) the number of Shares (to be adjusted by
you so as to eliminate fractional shares) as set forth opposite its name in Schedule I hereto.
(b) The Selling Stockholder understands that the Underwriter intends to make a public
offering of any or all Shares on the terms set forth in the Prospectus as soon after
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the effectiveness of this Agreement as in the judgment of the Underwriter is advisable.
The Selling Stockholder acknowledges and agrees that the Underwriter may offer and sell
Shares to or through any affiliate of an Underwriter and that any such affiliate may offer
and sell Shares purchased by it to or through the Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available
funds to the account specified by the Attorneys-in-Fact (as defined below), or any of them
at the offices of Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇ at
9.00 A.M. New York City time on December [___], 2006, or at such other time or place on the
same or such other date, not later than the fifth business day thereafter, as the
Underwriter and the Attorneys-in-Fact may agree upon in writing. The time and date of such
payment for the Shares are referred to herein as the “Closing Date”.
Payment for the Shares to be purchased on the Closing Date shall be made against delivery to
the Underwriter for the account of the Underwriter of the Shares to be purchased on such date in
definitive form registered in such names and in such denominations as the Underwriter shall request
in writing not later than two full business days prior to the Closing Date with any transfer taxes
payable in connection with the sale of the Shares duly paid by the Selling Stockholder. The
certificates for the Shares will be made available for inspection and packaging by the Underwriter
at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated set forth above not later than 4.00 P.M., New
York City time, on the business day prior to the Closing Date.
(d) Each of the Company and the Selling Stockholder acknowledges and agrees that the
Underwriter is acting solely in the capacity of an arm’s length contractual counterparty to
the Selling Stockholder with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company, the Selling Stockholder or any other
person. Additionally, the Underwriter is not advising the Company, the Selling Stockholder
or any other person as to any legal, tax, investment, accounting or regulatory matters in
any jurisdiction. The Company and the Selling Stockholder shall consult with their own
advisors concerning such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriter
shall have no responsibility or liability to the Company or the Selling Stockholder with
respect thereto. Any review by the Underwriter of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely
for the benefit of the Underwriter and shall not be on behalf of the Company or the Selling
Stockholder.
3. Representations and Warranties of the Company. The Company represents and warrants to
the Underwriter and the Selling Stockholder that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, complied in all material respects with the Securities Act and
did not contain any untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with information
relating to the Underwriter or the Selling Stockholder furnished to the Company in writing
by the Underwriter and the Selling Stockholder, respectively, expressly for use in any
Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale did
not, and at the Closing Date will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to the Underwriter or the
Selling Stockholder furnished to the Company in writing by the Underwriter or the Selling
Stockholder, respectively, expressly for use in such Time of Sale Information. No statement
of material fact included in the Prospectus has been omitted from the Time of Sale
Information and no statement of material fact included in the Time of Sale Information that
is required to be included in the Prospectus has been omitted therefrom.
(c) Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
the Company (including its agents and representatives, other than the Underwriter in its
capacity as such) has not made, used, prepared, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any written communication (as defined
in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of
an offer to buy the Shares (each such communication by the Company or its agents and
representatives (other than a communication referred to in clause (i) below) a “Free Writing
Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section
2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents
listed on Annex D hereto and other written communications approved in writing in advance by
the Underwriter. Each such Free Writing Prospectus complied in all material respects with
the Securities Act, has been filed in accordance with the Securities Act (to the extent
required thereby) and, when taken together with the Preliminary Prospectus accompanying, or
delivered prior to delivery of, such Free Writing Prospectus, did not, and at the Closing
Date will not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in reliance
upon and in conformity with information relating to the Underwriter or the Selling
Stockholder furnished to the Company in writing by the Underwriter or the Selling
Stockholder, respectively, expressly for use in any Free Writing Prospectus.
(d) Registration Statement and Prospectus. No order suspending the effectiveness of
the Registration Statement has been issued by the Commission and no
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proceeding for that purpose or pursuant to Section 8A of the Securities Act against the
Company or related to the offering has been initiated or threatened by the Commission; as of
the applicable effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with the Securities
Act, and did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in reliance
upon and in conformity with information relating to the Underwriter or the Selling
Stockholder furnished to the Company in writing by the Underwriter and the Selling
Stockholder, respectively, expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in the Prospectus,
when they become effective or were filed with the Commission, as the case may be, conformed
in all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
(f) Financial Statements. The historical financial statements and the related notes
thereto of the Company and its consolidated subsidiaries (including Grupo KCSM, S.A. de C.V.
(“Grupo KCSM”)) included or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as applicable, and
present fairly the financial position of the entities purported to be covered thereby at the
respective dates indicated and the results of their operations and their cash flows for the
respective periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis throughout the
periods covered thereby, and the supporting schedules included or incorporated by reference
in the Registration Statement, the Time of Sale Information, and the other financial
information included or incorporated by reference in the Registration Statement, the Time of
Sale Information and the Prospectus has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information shown thereby; and the
pro forma financial information and the
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related notes thereto included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus have been prepared in accordance
with the applicable requirements of the Securities Act and the Exchange Act, as applicable,
and the assumptions underlying such pro forma financial information are reasonable and are
set forth in the Registration Statement, the Time of Sale Information and the Prospectus.
No other financial statements, including pro forma financial statements, are required to be
included in the Registration Statement, the documents incorporated by reference therein, the
Time of Sale Information and the Prospectus. The other historical financial and statistical
information and data included or incorporated by reference in the Registration Statement,
the Time of Sale Information and the Prospectus are, in all material respects, fairly
presented.
(g) The Company is not an “ineligible issuer” in connection with the offering pursuant
to Rules 164, 405 and 433 under the Securities Act. Any Free Writing Prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or
will be, filed with the Commission in accordance with the requirements of the Securities Act
and the applicable rules and regulations of the Commission thereunder. Each Free Writing
Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act or that was prepared by or behalf of or used or referred to by the
Company complies or will comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission thereunder.
Except for the Free Writing Prospectuses, if any, identified in Annex D hereto, and
electronic road shows, if any, furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent, prepare, use or
refer to, any Free Writing Prospectus.
(h) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectus, there has not occurred any material adverse change,
or any development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, except in each case as otherwise disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus.
(i) Organization and Good Standing. The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of Delaware, has the corporate
power and authority to own its property and to conduct its business as described in the Time
of Sale Information and the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse effect on the
business, properties, management, financial position, stockholders’ equity, results of
operations or prospects of the Company and its subsidiaries, taken as a whole (a “Material
Adverse Effect”).
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(j) Subsidiaries. Each subsidiary of the Company has been duly organized, is validly
existing as a corporation, limited liability company or limited partnership, as the case may
be, in good standing under the laws of the jurisdiction of its organization, has the
corporate, limited liability company or limited partnership power and authority, as the case
may be, to own its property and to conduct its business as described in the Time of Sale
Information and the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect; all of the
outstanding shares of capital stock of the Company (including the Shares to be sold by the
Selling Stockholder) have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar rights; the capital stock
of the Company conforms to the description thereof contained in the Registration Statement;
and all of the issued shares of capital stock, membership interests or partnership
interests, as the case may be, of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and, except as otherwise described
in the Time of Sale Information and the Prospectus, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims, except those that
arise under the Amended and Restated Credit Agreement dated as of April 28, 2006, as amended
through the date hereof, among the Company, The Kansas City Southern Railway Company, the
subsidiary guarantors named therein and the lenders thereto (collectively, the “KCS Credit
Facilities”)
(k) Due Authorization. The Company has full right, power and authority to execute and
deliver this Agreement and perform its obligations thereunder, and all corporate action
required to be taken for the due and proper authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly and
validly taken.
(l) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(m) No Preemptive Rights. The sale or delivery of the Shares is not subject to any
preemptive right of stockholders of the Company arising under law or certificate of
incorporation or by-laws of the Company, to any contractual right of first refusal or other
right in favor of any person.
(n) The Rights. The Rights Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally or by equitable principles relating to enforceability; and the Rights have been
duly authorized by the Company and validly issued, and the poison pill security has been
duly authorized by the Company and validly reserved for issuance and upon the exercise in
accordance with the terms of the Rights Agreement, will be validly issued, fully paid and
non-assessable.
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(o) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in default in
any material respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject; or (iii) in violation in any
material respect of any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority, except (a) in the case of
clause (i) above, and only with respect to subsidiaries (whether individually or taken
together) of the Company which are not significant subsidiaries, for any such violations
that would not, individually or in the aggregate, have a Material Adverse Effect and (b) in
the case of clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) No Conflicts. The execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated hereby will
not contravene any provision of applicable law or the certificate of incorporation or
by-laws of the Company and its subsidiaries or any agreement or other instrument binding
upon the Company and its subsidiaries that are material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company and its subsidiaries, and no consent, approval,
authorization or order of, or qualification with, any governmental body or agency is
required for the performance by the Company and its subsidiaries of their obligations under
this Agreement, except such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Shares and the registration of
the Shares under the Securities Act.
(q) Legal Proceedings. There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or any of its subsidiaries is
subject other than proceedings accurately described in all material respects in the
Registration Statement, the Time of Sale Information and the Prospectus and proceedings that
could not reasonably be expected to have a Material Adverse Effect, or which could have a
material adverse effect on the power or ability of the Company to perform its obligations
under this Agreement or to consummate the transactions contemplated hereby.
(r) Independent Accountants. KPMG LLP, who have certified certain financial statements
of the Company and its subsidiaries are independent public accountants with respect to the
Company and its subsidiaries as required by the Securities Act. KPMG ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, S.C.,
who have certified certain financial statements of Grupo KCSM and its subsidiaries are
independent public accountants with respect to Grupo KCSM and its subsidiaries as required
by the Securities Act. PricewaterhouseCoopers S.C., who have certified certain financial
statements of Grupo
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KCSM and its subsidiaries are independent public accountants with respect to Grupo KCSM
and its subsidiaries as required by the Securities Act.
(s) Title to Real and Personal Property. The Company and each of its subsidiaries have
good and marketable title in fee simple to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the business of the Company
and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and
defects and imperfections of title except those that (i) arise under the KCS Credit
Facilities or (ii) do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries and could not reasonably be expected to
have a Material Adverse Effect.
(t) Title to Intellectual Property. The Company and each of its subsidiaries own or
possess adequate rights to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses and
knowhow (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct of their
respective businesses, except where the failure to possess such rights could not reasonably
be expected to have a Material Adverse Effect, and the conduct of their respective
businesses will not conflict with, and, except as described in the Time of Sale Information
and the Prospectus, the Company and its subsidiaries have not received any notice of any
claim or conflict with, any such rights of others that, if determined adversely to the
Company or any of its subsidiaries, would, individually or in the aggregate, have a Material
Adverse Effect.
(u) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on
the other, that is required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described in such documents and in the Time
of Sale Information.
(v) Investment Company Act. The Company is not and, after giving effect to the
consummation of the transactions as described in the Prospectus, will not be required to
register as an “investment company” as such term is defined in the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder (collectively,
“Investment Company Act”).
(w) Taxes. The Company and each of its subsidiaries have filed all federal, state,
local and foreign income and franchise tax returns required to be filed through the date
hereof and have paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely to the Company or any of
its subsidiaries, could reasonably be expected to have) a Material Adverse Effect.
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(x) Licenses and Permits. The Company and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign regulatory agencies
or bodies which are necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the Registration Statement,
the Time of Sale Information and the Prospectus, except where the failure to possess or make
the same would not, singularly or in the aggregate, have a Material Adverse Effect, and,
except as disclosed in the Time of Sale Information and the Prospectus, neither the Company
nor any of its subsidiaries has received notification of any revocation or modification of
any such license, certificate, authorization or permit or has any reason to believe that any
such license, certificate, authorization or permit will not be renewed in the ordinary
course, except where such revocation, modification or non renewal could not reasonably be
expected to, singularly or in the aggregate, have a Material Adverse Effect.
(y) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company, is
contemplated or threatened, except as would not have a Material Adverse Effect.
(z) Compliance With Environmental Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval, in each
case except as described in the Time of Sale Information and the Prospectus or where such
noncompliance with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a Material Adverse Effect.
(aa) In the ordinary course of its business, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and properties of the Company
and its subsidiaries. On the basis of such review, the Company has concluded that, except
as described in the Time of Sale Information and the Prospectus, there are no costs or
liabilities associated with Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect
(bb) Except as otherwise disclosed in the Time of Sale Information and the Prospectus,
there has been no storage, generation, transportation, handling, treatment, disposal,
discharge, emission or other release of any kind of toxic or other wastes or other hazardous
substances by, due to or caused by the Company or any of its subsidiaries (or, to the
knowledge of the Company, any other entity (including any predecessor) for whose
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acts or omissions the Company or any of its subsidiaries is or could reasonably be
expected to be liable) upon any of the property now or previously owned or leased by the
Company or any of its subsidiaries, or upon any other property, in violation of any statute
or any ordinance, rule, regulation, order, judgment, decree or permit or which would, under
any statute or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation or
liability that could not reasonably be expected to have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect; and, except as otherwise
disclosed in the Time of Sale Information and the Prospectus, there has been no disposal,
discharge, emission or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous substances with
respect to which the Company has knowledge, except for any such disposal, discharge,
emission or other release of any kind which could not reasonably be expected to have,
singularly or in the aggregate with all such discharges and other releases, a Material
Adverse Effect.
(cc) Compliance With ERISA. No “prohibited transaction” (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency”
(as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of
ERISA (other than events with respect to which the 30-day notice requirement under Section
4043 of ERISA has been waived) has occurred with respect to any employee benefit plan of the
Company or any of its subsidiaries which could reasonably be expected to have a Material
Adverse Effect, each such employee benefit plan is in compliance with applicable law,
including ERISA and the Code, except where such noncompliance, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect, the Company
and each of its subsidiaries have not incurred and do not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan
for which the Company or any of its subsidiaries would have any liability; and each such
pension plan that is intended to be qualified under Section 401 (a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action or by failure
to act, which could reasonably be expected to cause the loss of such qualification.
(dd) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of disclosure controls that is designed to ensure that information required to be
disclosed by the Company is recorded, summarized and reported to the Commission, including
controls and procedures designed to ensure that such information is accumulated and
communication to the Company’s management as appropriate to allow timely decisions regarding
required disclosure.
(ee) Accounting Controls. The Company and its subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
11
financial statements in conformity with generally accepted accounting principles or
international financial reporting standards, as the case may be, and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the Time of Sale Information and
the Prospectus, there are no material weaknesses in the Company’s internal controls.
(ff) Insurance. The Company and each of its subsidiaries carry, or are covered by,
insurance covering their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are adequate to protect
the Company and its subsidiaries and their respective businesses. Neither the Company nor
any of its subsidiaries has received notice from any insurer or agent of such insurer that
material capital improvements or other material expenditures are required or necessary to be
made in order to continue such insurance.
(gg) No Unlawful Payments. Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(hh) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its subsidiaries or the
Underwriter for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Shares.
(ii) No Registration Rights. No person other than the Selling Stockholder has the
right to require the Company or any of its subsidiaries to register any securities for sale
under the Securities Act by reason of the filing of the Registration Statement with the
Commission or, to the best knowledge of the Company, the sale of the Shares to be sold by
the Selling Stockholder hereunder
(jj) Contracts. There are no contracts, documents, pending legal or governmental
actions, suits or proceedings of a character that would be required to be described in the
Registration Statement, the Time of Sale Information and the Prospectus that are not set
forth or incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus. All descriptions in the Registration Statement, the Time of
Sale Information and the Prospectus of such contracts or documents are accurate in all
material respects.
12
(kk) No Legal Impediment to Sale. To the knowledge of the Company, no action has been
taken and no statute, rule, regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the sale of the Shares or suspends the sale of
the Share in any jurisdiction; no injunction, restraining order or order of any nature by
any federal or state court of competent jurisdiction has been issued with respect to the
Company or any of its subsidiaries which would prevent or suspend the sale of the Shares or
the use of the Prospectus in any jurisdiction; no action, suit or proceeding is pending
against or, to the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to interfere with or
adversely affect the sale of the Shares or the validity of this Agreement or any action
taken or to be taken pursuant hereto.
(ll) No Stabilization. The Company has not taken, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(mm) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21 E of the Exchange Act) contained in the
Registration Statement, the Time of Sale Information and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(nn) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part of the Company
or any of the Company’s directors or officers, in their capacities as such, to comply with
any provision of the SarbanesOxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(oo) Shares Listed on the NYSE. The Shares are listed on the New York Stock Exchange.
4. Representations and Warranties of the Selling Stockholder. The Selling Stockholder
represents and warrants to the Underwriter and the Company that:
(a) Required Consents; Authority. Except for the consents, approvals, authentications,
orders and registrations or qualifications as may be required under federal securities laws
and applicable state securities laws and “blue sky” laws in connection with the purchase and
distribution of the Shares by the Underwriter, all consents, approvals, authorizations and
orders necessary for the execution and delivery by the Selling Stockholder of this Agreement
and the Power of Attorney (the “Power of Attorney”), and for the sale and delivery of the
Shares to be sold by the Selling Stockholder hereunder, will be obtained as of the Closing
Date; and the Selling Stockholder has full right, power and authority to enter into this
Agreement and the Power of Attorney (collectively, the “Stockholder Documents”), and to
sell, assign, transfer and deliver the Shares to be sold by the Selling Stockholder
hereunder on the
13
Closing Date; and the Stockholder Documents have each been duly authorized, executed
and delivered by the Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by the Selling Stockholder
of the Stockholder Documents, the sale of the Shares to be sold by the Selling Stockholder
and the consummation by the Selling Stockholder of the transactions herein and therein
contemplated will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Selling
Stockholder pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets of the Selling Stockholder is
subject, (ii) result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Selling Stockholder or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory agency having jurisdiction over the Selling Stockholder except,
in the case of clause (i) and (iii) for such conflicts, breaches or violations which could
not, individually or in the aggregate, be reasonably expected to have a material adverse
effect on the consummation of the transactions contemplated by this Agreement.
(c) Title to Shares. The Selling Stockholder has good and valid title to the Shares to
be sold at the Closing Date by the Selling Stockholder hereunder, free and clear of all
liens, encumbrances, equities or adverse claims other than those pursuant to the
Stockholders’ Agreement (as defined in Section 4(k) hereof); the Selling Stockholder will
have good and valid title to the Shares to be sold at the Closing Date by the Selling
Stockholder hereunder, free and clear of all liens, encumbrances, equities or adverse
claims; and upon (i) payment by the Underwriter for the Shares to be sold by the Selling
Stockholder in accordance with this Agreement, (ii) delivery (within the meaning of Section
8-301 of the Uniform Commercial Code as in effect in the State of New York as of the date
hereof (the “UCC”)) of such Shares, as directed by the Underwriter, to, and receipt by Cede
& Co. or other nominee designated by The Depository Trust Company (“DTC”), (iii)
registration of the transfer of such Shares to, and registration of such Shares in the name
of, Cede & Co. or other nominee designated by DTC and (iv) the crediting of such Shares to
the account of the Underwriter maintained by DTC, assuming that such accounts are
“securities accounts” (as defined in Section 8-501 of the UCC), DTC will be a protected
purchaser (within the meaning of Section 8-503 of the UCC) of such Shares, the Underwriter
will acquire “security entitlements” (as defined in Section 8-102 of the UCC) in respect of
such Shares and, assuming that the Underwriter does not have “notice of an adverse claim”
(within the meaning of Section 8-105 of the UCC) to such Shares, no action based on an
“adverse claim” (within the meaning of Section 8-102(a)(i) of the UCC) to such Shares,
whether framed in conversion, replevin, constructive trust, equitable lien, or other theory,
may be asserted against the Underwriter with respect to such “security entitlement.”
14
(d) No Stabilization. The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Shares.
(e) Registration Statement and Prospectus. (i) as of the applicable effective date of
the Registration Statement and any amendment thereto, the Registration Statement complied
and will comply in all material respects with the Securities Act, and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not misleading; (ii)
as of the Applicable Time, the Time of Sale Information did not, and as of the Closing Date
will not, contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (iii) as of its
date, the Prospectus and any amendment or supplement thereto did not, and as of the Closing
Date, the Prospectus will not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Selling Stockholder only makes such representation and
warranty to the extent such statements or omissions were made or omitted in reliance upon
and in conformity with information relating to the Selling Stockholder and were furnished to
the Company in writing by the Selling Stockholder expressly for use in the Registration
Statement, Time of Sale Information and the Prospectus and any amendment or supplement
thereto.
(f) Selling Stockholder Information. Wherever in this Agreement reference is made to
any information relating to the Selling Stockholder contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, any Free Writing Prospectus, any amendment or
supplement thereto, or any Time of Sale Information in reliance upon and in conformity with
information furnished to the Company in writing by the Selling Stockholder expressly for use
therein, such information shall be deemed to include any information regarding the Selling
Stockholder contained in the latest draft of any such document which has been submitted to
the Selling Stockholder or its counsel for review and which has either been approved by the
Selling Stockholder or its counsel or as to which no objection or comment was made by the
Selling Stockholder or its counsel prior to the public availability of the same
(g) Material Information. As of the date hereof, the Applicable Time and the Closing
Date, the sale of the Securities by the Selling Stockholder is not and will not be prompted
by any material information concerning the Company which is not set forth or incorporated by
reference in the Registration Statement or the Prospectus.
(h) Solvency. The Selling Stockholder is, and will be after giving effect to the sale
of the Shares and giving effect to the transactions related thereto as described in the
Prospectus), Solvent. As used in this paragraph, the term “Solvent’ ‘means, with respect to
a particular date, that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Selling Stockholder is not less than the total amount
15
required to pay the probable liabilities of the Selling Stockholder on its total
existing debts and liabilities (including contingent liabilities) as they become absolute
and matured, (ii) the Selling Stockholder is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of the Shares as
contemplated by this Agreement, the Selling Stockholder is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature, (iv) the Selling
Stockholder is not engaged in any business or transaction, and is not about to engage in any
business or transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in which the
Selling Stockholder is engaged and (v) the Selling Stockholder does not fall within any of
the provisions of Article 10 of the Mexican Ley de Concursos Mercantiles. In computing the
amount of such contingent liabilities at any time, it is intended that such liabilities will
be computed in an amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an actual or
matured liability.
(i) No Violation or Default. The Selling Stockholder is not (i) in violation of its
charter or by-laws or similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Selling Stockholder or any of its subsidiaries is a party or by which the Selling
Stockholder or any of its subsidiaries is bound or to which any of the property or assets of
the Selling Stockholder or any of its subsidiaries is subject; or (iii) in violation in any
material respect of any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority except for such violation which
could not, individually or in the aggregate, be reasonably expected to have a material
adverse effect on the consummation of the transaction contemplated by this Agreement. The
Selling Stockholder is current in its payment obligations under all its outstanding
indebtedness and no default or event of default under such indebtedness has occurred and is
continuing.
(j) Discharge of Existing Instruments. The obligations of the Selling Stockholder
under each of (i) the indenture, dated as of August 11, 2004 (as amended by a supplemental
indenture, effective as of August 20, 2004, by and among the Selling Stockholder, the
guarantors named therein and The Bank of New York, as trustee; (ii) the security agreement
dated April 1, 2005 between the Selling Stockholder and the Bank of New York as collateral
agent and; (iii) the Mexican pledge agreement dated [___], 200[_] by and between the Selling
Stockholder and The Bank of New York have been discharged in full as of the date hereof.
(k) Compliance with Stockholders Agreement and Registration Rights Agreement. The
Selling Stockholder represents and acknowledges that the sale of the Shares by the Selling
Stockholder pursuant to this Agreement will not violate the Stockholders Agreement, dated as
of December 15, 2004, as amended by the certain
16
letter agreement dated August 30, 2006 (the “Letter Agreement”) by and between the
Company, the Selling Stockholder and other parties named therein (the “Stockholders
Agreement”), and the Registration Rights Agreement, dated as of December 15, 2004, by and
between the Company, the Selling Stockholder and other parties named therein (the
“Registration Rights Agreement”).
The Selling Stockholder represents and warrants that the Selling Stockholder has duly executed
and delivered Powers of Attorney, in the form heretofore furnished to you, appointing the person or
persons indicated in Schedule II hereto, and each of them, as the Selling Stockholder’s
Attorneys-in-fact (the “Attorneys-in-Fact” or any one of them the “Attorney-in-Fact”) with
authority to execute and deliver this Agreement on behalf of the Selling Stockholder, to determine
the purchase price to be paid by the Underwriter to the Selling Stockholder as provided herein, to
authorize the delivery of the Shares to be sold by the Selling Stockholder hereunder and otherwise
to act on behalf of the Selling Stockholder in connection with the transactions contemplated by
this Agreement.
The Selling Stockholder specifically agrees that the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law or by the dissolution of the Selling
Stockholder or by the occurrence of any other event. If the Selling Stockholder should be
dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of the Selling Stockholder
in accordance with the terms and conditions of this Agreement and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if such dissolution or
other event had not occurred, regardless of whether or not the Attorneys-in-Fact, or any of them,
shall have received notice of such dissolution or other event.
5. Further Agreements of the Company. The Company covenants and agrees with the
Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will use commercially
reasonable efforts to cause the Registration Statement to become effective at the earliest
possible time and, if required, will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A under the Securities Act and to file
promptly all reports and any information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of the Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; and the Company will furnish copies of
the Prospectus to the Underwriter in New York City prior to 10.00 A.M., New York City time,
on the business day next succeeding the date of this Agreement in such quantities as the
Underwriter may reasonably request.
(b) Delivery of Copies. The Company will deliver, at its expense, (i) to the
Underwriter, two signed copies of the Registration Statement as originally filed and each
amendment thereto, in each case including all exhibits and consents filed therewith and
documents incorporated by reference therein; and (ii) to the Underwriter (A) a conformed
copy of the Registration Statement as originally filed and each amendment thereto
17
(without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as
many copies of the Prospectus (including all amendments and supplements thereto and
documents incorporated by reference therein) and each Free Writing Prospectus as the
Underwriter may reasonably request. As used herein, the term “Prospectus Delivery Period”
means such period of time after the first date of the public offering of the Shares as in
the opinion of counsel for the Underwriter a prospectus relating to the Shares is required
by law to be delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Shares by the Underwriter or dealer.
(c) Amendments or Supplements. Before preparing, using, authorizing, approving,
referring to or filing any Free Writing Prospectus, and before filing any amendment or
supplement to the Registration Statement or the Prospectus, whether before or after the time
that the Registration Statement becomes effective, the Company will furnish to the
Underwriter and counsel for the Underwriter a copy of the proposed Free Writing Prospectus,
amendment or supplement for review and will not prepare, use, authorize, approve, refer to
or file any such Free Writing Prospectus or file any such proposed amendment or supplement
to which the Underwriter reasonably objects.
(d) Notice to the Underwriter. The Company will advise the Underwriter promptly, and
confirm such advice in writing, (i) when the Registration Statement has become effective;
(ii) when any amendment to the Registration Statement has been filed or becomes effective;
(iii) when any supplement to the Prospectus or any amendment to the Prospectus has been
filed; (iv) of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request by the Commission for
any additional information; (v) of the issuance by the Commission of any order suspending
the effectiveness of the Registration Statement or preventing or suspending the use of the
Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding
for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of
any event within the Prospectus Delivery Period as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading; and
(vii) of the receipt by the Company of any notice with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its best efforts to
prevent the issuance of any such order suspending the effectiveness of the Registration
Statement, preventing or suspending the use of the Preliminary Prospectus or the Prospectus
or suspending any such qualification of the Shares and, if any such order is issued, will
obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus Delivery Period (i)
any event shall occur or condition shall exist as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the
18
statements therein, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading or (ii) in the opinion of counsel for the
Underwriter, it is necessary to amend or supplement the Prospectus to comply with law, the
Company will immediately notify the Underwriter thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission and furnish to the Underwriter, such
amendments or supplements to the Prospectus as may be necessary so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) Blue Sky Compliance. The Company will endeavor to qualify the Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as the Underwriter shall
reasonably request; provided that the Company and its subsidiaries shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which they have not so qualified or
to file a general consent to service of process in any jurisdiction.
(g) Earning Statement. The Company will make generally available to its security
holders and the Underwriter as soon as practicable an earning statement that satisfies the
provisions of Section 11 (a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158)
of the Registration Statement.
(h) No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(i) Record Retention. The Company will, pursuant to reasonable procedures developed in
good faith, retain copies of each Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
6. Further Agreements of the Selling Stockholder. The Selling Stockholder covenants and
agrees with the Underwriter that:
(a) Tax Form. It will deliver to the Underwriter prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-8BEN (or other
applicable form or statement specified by the Treasury Department regulations in lieu
thereof) in order to facilitate the Underwriter’s documentation of its compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated.
19
7. Conditions of Underwriter’s Obligations. The obligation of the Underwriter to
purchase the Shares on the Closing Date as provided herein is subject to the performance by the
Company and the Selling Stockholder of their respective covenants and other obligations hereunder
and to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement (or if a
post-effective amendment thereto is required to be filed under the Securities Act, such
post-effective amendment) shall have become effective, and the Underwriter shall have
received notice thereof, not later than 5:00 P.M., New York City time, on the date hereof;
no order suspending the effectiveness of the Registration Statement shall be in effect, and
no proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be
pending before or threatened by the Commission; the Prospectus and each Free Writing
Prospectus shall have been timely filed with the Commission under the Securities Act (in the
case of a Free Writing Prospectus, to the extent required by Rule 433 under the Securities
Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable satisfaction of the
Underwriter.
(b) Representations and Warranties. The respective representations and warranties of
the Company and the Selling Stockholder contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; and the statements of the Company and its
officers and of the Selling Stockholder and its officers made in any certificates delivered
pursuant to this Agreement shall be true and correct on and as of the Closing Date.
(c) No Downgrade. Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, (i) there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the rating accorded
(x) the Company or any of its subsidiaries, any of the Company’s or its subsidiaries’
securities or in the rating outlook for the Company or any of its subsidiaries and (y) the
Selling Stockholder or any of its subsidiaries, any of the Selling Stockholder’s or its
subsidiaries’ securities or in the rating outlook for the Selling Stockholder or any of its
subsidiaries, in each case by any “nationally recognized statistical rating organization”,
as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (in each
case other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section
3(h) hereof shall have occurred or shall exist, which event or condition is not described in
the Time of Sale Information (excluding any amendment or supplement thereto pursuant to
termination of old contracts and entry into new contracts by prospective purchasers) and the
Prospectus (excluding any amendment or supplement thereto) and the effect of which in the
judgment of the Underwriter makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares
20
on the Closing Date, on the terms and in the manner contemplated by this Agreement, the
Time of Sale Information and the Prospectus.
(e) Officer’s Certificate. The Underwriter shall have received on and as of the
Closing Date a certificate:
(i) with respect to the Company, in form and substance reasonably satisfactory to the
Underwriter, of an executive officer of the Company (A) confirming that such officer has
carefully reviewed the Registration Statement, the Time of Sale Information and the
Prospectus and, to the best knowledge of such officer, the representation of the Company set
forth in Section 3(b) hereof is true and correct, (B) confirming that the other
representations and warranties of the Company in this Agreement are true and correct and
that the Company has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing Date and (C) to the
effect set forth in paragraphs (a), (c) and (d) above with respect to the Company and its
subsidiaries and
(ii) with respect to the Selling Stockholder, in form and substance reasonably
satisfactory to the Underwriter, of an executive officer or chief accounting officer of the
Selling Stockholder and one additional senior executive officer of the Selling Stockholder
who is satisfactory to the Underwriter (A) confirming that such officers have carefully
reviewed the Registration Statement, the Time of Sale Information and the Prospectus and the
representation of the Selling Stockholder set forth in Section 4(e) hereof is true and
correct, (B) confirming that the other representations and warranties of the Selling
Stockholder in this Agreement are true and correct and that the Selling Stockholder has
complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date, (C) to the effect set forth in
paragraphs (c) and (d) above with respect to the Selling Stockholder and its subsidiaries
and (D) confirming that the requirements for the delivery of such Shares to the Underwriter
free and clear of all liens, encumbrances, equities or claims upon payment therefor in
accordance with this Agreement have been complied with.
(f) KPMG Comfort Letters. (i) On the date of this Agreement and on the Closing Date
KPMG LLP, independent public accountants, with respect to the Company and its subsidiaries,
shall have furnished to the Underwriter, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriter in form and substance
reasonably satisfactory to the Underwriter, containing statements and information of the
type customarily included in accountants’ “comfort letters” to Underwriter with respect to
the financial statements and certain financial information contained or incorporated by
reference in the Registration Statement, the Time of Sale Information and the Prospectus;
provided, that each letter delivered on the Closing Date shall use a “cut-off’ date no more
than three business days prior to such Closing Date and (ii) On the date of this Agreement,
KPMG ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, S.C., independent public accountants with respect to Grupo KCSM, S.A.
de C.V. and its subsidiaries, shall have furnished to the Underwriter, at the request of the
Company, a letter dated the date of this Agreement and addressed to the Underwriter, in form
and
21
substance reasonably satisfactory to the Underwriter, containing statements and
information of the type customarily included in accountants’ “comfort letters” with respect
to the financial statements and certain financial information contained or incorporated by
reference in the Registration Statement, the Time of Sale Information and the Prospectus
provided, that such letter shall use a “cut-off” date no more than three business days prior
to the date of this Agreement.
(g) PWC Comfort Letters. On the date of this Agreement PricewaterhouseCoopers S.C.,
independent public accountants with respect to Grupo KCSM, S.A. de C.V. and its
subsidiaries, shall have furnished to the Underwriter, at the request of the Company, a
letter dated the date of this Agreement and addressed to the Underwriter, in form and
substance reasonably satisfactory to the Underwriter, containing statements and information
of the type customarily included in accountants’ “comfort letters” with respect to the
financial statements and certain financial information contained or incorporated by
reference in the Registration Statement, the Time of Sale Information and the Prospectus
provided, that such letter shall use a “cut-off’ date no more than three business days prior
to the date of this Agreement.
(h) Opinion of Counsel for the Company. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, outside
United States counsel for the Company, and White & Case, outside Mexican counsel for the
Company, shall have furnished to the Underwriter, at the request of the Company, their
written opinions, dated the Closing Date and addressed to the Underwriter, in form and
substance reasonably satisfactory to the Underwriter, to the effect set forth in Annex A-1
and A-2, respectively, hereto.
(i) Opinion of U.S. and Mexican Counsel for the Selling Stockholder. ▇▇▇▇▇▇ and ▇▇▇▇▇
LLP, U.S. counsel for the Selling Stockholder, and ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.▇., Mexican counsel
for the Selling Stockholder, shall have furnished to the Underwriter, at the request of the
Selling Stockholder, their written opinions, dated the Closing Date and addressed to the
Underwriter, in form and substance reasonably satisfactory to the Underwriter, to the effect
set forth in Annex B hereto.
(j) Opinion of U.S. and Mexican Counsel for the Underwriter. The Underwriter shall
have received on and as of the Closing Date an opinion of Shearman & Sterling LLP, U.S.
counsel for the Underwriter, with respect to such matters as the Underwriter may reasonably
request, and such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(k) No Legal Impediment to Sale. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Closing Date prevent the
sale of the Shares; and no injunction or order of any federal, state or foreign court shall
have been issued that would, as of the Closing Date prevent the sale of the Shares.
22
(l) Good Standing. The Underwriter shall have received on and as of the Closing Date
satisfactory evidence of the good standing of the Company and its subsidiaries and the
Selling Stockholder (certified copy of Registration of the Selling Stockholder, or any
Mexican subsidiary of the Company, as the case may be, before the public registry of
Commerce) in their respective jurisdictions of organization and their good standing as
foreign entities in such other jurisdictions as the Underwriter may reasonably request, in
each case in writing or any standard form of telecommunication from the appropriate
Governmental Authorities of such jurisdictions.
(m) Additional Documents. On or prior to the Closing Date the Company and the Selling
Stockholder shall have furnished to the Underwriter such further certificates and documents
as the Underwriter may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.
8. Indemnification and Contribution.
(a) Indemnification of the Underwriter by the Company. The Company agrees to indemnify
and hold harmless the Underwriter, its affiliates, directors and officers and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such fees and
expenses are incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (or any amendment or supplement thereto), any Free Writing
Prospectus or any Time of Sale Information, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use therein, it being
understood and agreed that the only such information furnished by the Underwriter consists
of the information described as such in subsection (d) below.
(b) Indemnification of the Underwriter and the Company by the Selling Stockholder. The
Selling Stockholder agrees to indemnify and hold harmless (i) the Underwriter, its
affiliates, directors and officers and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including, without
limitation, the legal fees and other expenses incurred in connection with any suit, action
or proceeding or any claim asserted, as such fees and expenses are
23
incurred), joint or several, that arise out of, or are based upon, any untrue statement
or alleged untrue statement of a material fact relating to the Selling Stockholder provided
in writing to the Company by the Selling Stockholder for use in, and contained in, the
Registration Statement or the Prospectus (or any amendment or supplement thereto), any Free
Writing Prospectus or any Time of Sale Information, or caused by any omission or alleged
omission to state therein a material fact about the Selling Stockholder required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such losses,
claims, damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity
with information relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein, it being understood and agreed that the only such
information furnished by the Underwriter consists of the information described as such in
subsection (d) below; and (ii) the Company, its affiliates, directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, the legal fees and other expenses incurred
in connection with any suit, action or proceeding or any claim asserted, as such fees and
expenses are incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact relating to the Selling Stockholder
provided in writing to the Company by the Selling Stockholder for use in, and contained in,
the Registration Statement or the Prospectus (or any amendment or supplement thereto), any
Free Writing Prospectus or any Time of Sale Information, or caused by any omission or
alleged omission to state therein a material fact about the Selling Stockholder required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Notwithstanding anything to the contrary contained herein, the aggregate liability of the
Selling Stockholder under Section 8 hereof shall not exceed the net proceeds received by such
Selling Stockholder hereunder.
(c) Indeminifcation of the Selling Stockholder by the Company. The Company agrees to
indemnify and hold harmless the Selling Stockholder, its affiliates, directors and officers
and each person, if any, who controls the Selling Stockholder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the legal fees and
other expenses incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (or any amendment or supplement
thereto), any Free Writing Prospectus or any Time of Sale Information, or caused by any
omission or alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such losses, claims, damages
or liabilities arise out of, or are based upon, any
24
untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to the Selling Stockholder furnished to the
Company in writing by the Selling Stockholder expressly for use therein.
(d) Indemnification of the Company and the Selling Stockholder. The Underwriter
agrees, severally and not jointly, to indemnify and hold harmless the Company, its
directors, its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and the Selling Stockholder to the same extent as the indemnity set forth
in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities
that arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information relating
to the Underwriter furnished to the Company in writing by the Underwriter expressly for use
in the Registration Statement, the Prospectus (or any amendment or supplement thereto), any
Free Writing Prospectus or any Time of Sale Information.
(e) Notice and Procedures. If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or asserted against any
person in respect of which indemnification may be sought pursuant to the preceding
paragraphs of this Section 8, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying Person”) in
writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify
the Indemnifying Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 8. If any such proceeding shall be
brought or asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others
entitled to indemnification pursuant to this Section 8 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those available to the
Indemnifying Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of more
25
than one separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any
such separate firm for the Underwriter, its affiliates, directors and officers and any
control persons of the Underwriter shall be designated in writing by the Underwriter, any
such separate firm for the Company, its directors, its officers who signed the Registration
Statement and any control persons of the Company shall be designated in writing by the
Company and any such separate firm for the Selling Stockholder shall be designated in
writing by the Attorney-in-Fact. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days after receipt
by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which
any Indemnified Person is or could have been a party and indemnification could have been
sought hereunder by such Indemnified Person, unless such settlement (x) includes an
unconditional release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(f) Contribution. If the indemnification provided for in paragraphs (a), (b), (c) and
(d) above is unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and the
Underwriter on the other from the offering of the Shares or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the relative fault
of the Company and the Selling Stockholder on the one hand and the Underwriter on the other
in connection with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and the
Underwriter on the other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Selling Stockholder from the sale of
the Shares and the total underwriting discounts and commissions received by the Underwriter
in connection therewith, in each
26
case as set forth in the table on the cover of the Prospectus, bear to the aggregate
offering price of the Shares. The relative fault of the Company and the Selling Stockholder
on the one hand and the Underwriter on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company and the Selling Stockholder or by the Underwriter and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission.
(g) Limitation on Liability. The Company, the Selling Stockholder and the Underwriter
agree that it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Selling Stockholder or
the Underwriter were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in
paragraph (f) above. The amount paid or payable by an Indemnified Person as a result of the
losses, claims, damages and liabilities referred to in paragraph (f) above shall be deemed
to include, subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 8, in no event shall the Underwriter be required to contribute
any amount in excess of the amount by which the total underwriting discounts and commissions
received by the Underwriter with respect to the offering of the Shares exceeds the amount of
any damages that the Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(h) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be available to any
Indemnified Person at law or in equity.
9. Effectiveness of Agreement. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
10. Termination. This Agreement may be terminated in the absolute discretion of the
Underwriter, by notice to the Company and the Selling Stockholder, if after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the Underwriter, is material
and adverse and makes it impracticable or inadvisable to proceed with the offering, sale
27
or delivery of the Shares on the Closing Date on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Prospectus.
11. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the sale, preparation and delivery of the Shares and any
taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Free
Writing Prospectus, the Time of Sale Information and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing
and distributing any other documents relating to the offering of the Shares; (iv) the fees and
expenses of the Company’s counsel and independent accountants; (v) the fees and expenses incurred
in connection with the registration or qualification and determination of eligibility for
investment of the Shares under the laws of such jurisdictions as the Underwriter may designate and
the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriter); (vi) the cost of preparing stock certificates; (vii) the
costs and charges of any transfer agent and any registrar; (viii) all expenses and application fees
incurred in connection with any filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc.
(b) If (i) the Selling Stockholder for any reason fails to tender the Shares for
delivery to the Underwriter or (ii) the Underwriter declines to purchase the Shares for any
reason permitted under this Agreement, the Selling Stockholder agrees to reimburse the
Underwriter for all out-of-pocket costs and expenses (including the fees and expenses of
their counsel) reasonably incurred by the Underwriter in connection with this Agreement and
the offering contemplated hereby.
(c) The Selling Stockholder shall pay all Selling Expenses, and shall reimburse the
Company for all Registration Expenses (as such terms are defined in the Letter Agreement),
related to the offering and sale of the Shares and the performance of the Company’s
obligations hereunder and under the Registration Rights Agreement and Letter Agreement. The
Selling Stockholder shall be credited with all Registration Expenses advanced by the Selling
Stockholder to the Company prior to the Closing Date. One business day prior to the Closing
Date, the Company shall provide to the Underwriter and the Selling Stockholder a written
good faith estimate of the total Registration Expenses incurred, net of all Registration
Expenses theretofore advanced by the Selling Stockholder to the Company (the “Estimated Net
Registration Expenses”), provided, however, that if the Company fails to
provide such written good faith estimate of the Estimated Net Registration Expenses then the
amount of the Estimated Net Registration Expenses shall be $[___]. The Underwriter shall
disburse the offering proceeds net of underwriting discounts and commissions, Selling
Expenses and the Estimated Net Registration Expenses to the Selling Stockholder and
concurrently disburse the Estimated Net Registration Expenses to the Company. The Company
shall provide the Underwriter and the Selling Stockholder with copies of all invoices for
Registration Expenses actually incurred as and when received by the Company. Any
28
amount by which the Estimated Net Registration Expenses exceed the total Registration
Expenses actually incurred less all Registration Expenses theretofore advanced by the
Selling Stockholder to the Company and any Registration Expenses remitted to the Company by
the Underwriter in accordance with this Section 11(c) (the “Actual Net Registration
Expenses”) shall be reimbursed by the Company to the Selling Stockholder not later than 30
days after the date the Actual Net Registration Expenses are finally determined. Any amount
by which the Actual Net Registration Expenses exceed the Estimated Net Registration Expenses
shall be reimbursed by the Selling Stockholder to the Company not later than 30 days after
the date the Actual Net Registration Expenses are finally determined. It is specifically
understood and agreed that the Underwriter and the Selling Stockholder may rely on the
written good faith estimate provided by the Company as set out above, as the case may be,
and shall have no responsibility therefor other than as set forth in this Section 11(c).
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and the officers and
directors and any controlling persons referred to in Section 8 hereof. Nothing in this Agreement
is intended or shall be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein. No purchaser of
Shares from the Underwriter shall be deemed to be a successor merely by reason of such purchase.
13. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company, the Selling Stockholder and the Underwriter contained in
this Agreement or made by or on behalf of the Company, the Selling Stockholder or the Underwriter
pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery
of and payment for the Shares and shall remain in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of the Company, the Selling
Stockholder or the Underwriter.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set
forth in Rule 1-02 of Regulation S-X under the Exchange Act.
15. Miscellaneous.
(a) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication. Notices to the Underwriter shall be given to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: Equity
Syndicate Desk with a copy to the Legal Department. Notices to the Company shall be given
to it at Kansas City Southern, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (Fax:
816983-1227); Attention: General Counsel. Notices
29
to the Selling Stockholder shall be given to the Attorneys-in-Fact at Grupo TMM, S.A.,
▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, DF
(Fax: 5255-5666-1486); Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(b) Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Each of the Selling Stockholder, the Company and the Underwwriter irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the City of New York or the courts of the State of New York in each
case located in the Borough of Manhattan in the City of New York (collectively, the “Specified
Courts”), and irrevocably submits to the jurisdiction of such courts in any such suit, action or
proceeding. The Selling Stockholder has appointed [CT Corporation System] as its authorized agent
in the Borough of Manhattan in The City of New York upon which process may be served in any such
suit, action or proceeding relating to this Agreement, and agrees that service of process upon such
agent, and written notice of said service to the Selling Stockholder by the person serving the same
to the address provided in paragraph (b) above, shall be deemed in every respect effective service
of process upon the Selling Stockholder in any such suit, action or proceeding. The Selling
Shareholder further agrees that, in the event that CT Corporation System shall at any time cease to
be such duly appointed and authorized agent for service of process, it shall take any and all
action as may be necessary to ensure that there shall be a duly appointed and authorized agent for
service of process in the Borough of Manhattan, The City of New York. Each of the Selling
Stockholder, the Company and the Underwriter hereby irrevocably and unconditionally, to the fullest
extent permitted by law, waives any objection to the laying of venue of any lawsuit, action or
other proceeding in the Specified Courts, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such lawsuit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
With respect to any Related Proceedings, the Selling Stockholder irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise)
from jurisdiction, service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect to any judgment by a
Specified Court (“Related Judgment”), the Selling Stockholder waives any such immunity in the
Specified Courts or any other court of competent jurisdiction, and will not raise or claim or cause
to be pleaded any such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United States Foreign
Sovereign Immunities Act of 1976, as amended.
Nothing herein shall be construed to prevent or impair the right of the Underwriter to serve
process in any other manner permitted by law.
(c) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of
30
which shall be an original and all of which together shall constitute one and the same
instrument.
(d) Amendments or Waivers. No amendment or waiver of any provision of this Agreement,
nor any consent or approval to any departure therefrom, shall in any event be effective
unless the same shall be in writing and signed by the parties hereto.
(e) Headings. The headings herein are included for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
31
If the foregoing is in accordance with your understanding, please indicate your acceptance of this
Agreement by signing in the space provided below.
| Very truly yours, KANSAS CITY SOUTHERN |
||||
| By: | ||||
| Name: | [___] | |||
| Title: | [___] | |||
| GRUPO TMM, S.A. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| As Attorneys-in-Fact acting on behalf of the Selling Stockholder named in Schedule II to this Agreement. |
||||
32
| Accepted: December [___], 2006 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED |
||||
| By: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED | |||
| By: | ||||
| Name: | ||||
| Title: | ||||
33
Schedule I
Underwriter |
Number of Shares | |||
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated |
1,494,469 | |||
Total |
1,494,469 | |||
Schedule II
Selling Stockholder: |
Number of Shares: | |||
Group TMM, S.A. |
1,494,469 | |||
Annex A-1
[Form of Opinion of United States Counsel for the Company]
Annex A-2
[Form of Opinion of Mexican Counsel for the Company]
Annex B
[Form of Opinion of Counsel For
The Selling Stockholder]
The Selling Stockholder]
Annex C
Time of Sale Information
Annex D
[Free Writing Prospectuses]