Mexico
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N/A
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(State or other jurisdiction of
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(IRS Employer
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incorporation)
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Identification No.)
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Each Loan Agreement requires KCSM to make thirty eight (38) quarterly principal payments plus interest at an annual rate of 9.31%, which approximates the implicit interest rate in the Lease Agreement. KCSM generated certain tax benefits as a result of purchasing the locomotives. The first payment required by each Loan Agreement is due and payable on September 15, 2011, and the final payment is due and payable on December 15, 2020.
Each Loan Agreement contains representations, warranties and covenants typical of such equipment loans. Each Loan Agreement also contains affirmative and negative covenants that are customary for loan agreements of this type including, but not limited to: providing periodic financial information to GE, maintaining KCSM's legal existence and its railway concession, maintaining proper books and records, complying with laws and KCSM's railway concession, maintaining the Locomotives, taking actions necessary to avoid a change in control from occurring and refraining from (x) changing the nature of KCSM's business, (y) creating any liens upon KCSM's railway concession and (z) terminating or cancelling KCSM's railway concession.
Events of default in each Loan Agreement are customary for transactions of this type and include, but are not limited to, certain payment defaults, certain bankruptcy and liquidation proceedings, making material misrepresentations in each Loan Agreement, failure to perform any covenants or agreements contained in each Loan Agreement, the condemnation, nationalization or expropriation of the Locomotives or a material portion of the assets of KCSM, a material strike resulting in the discontinuance of all railroad operations of KCSM for a period of greater than ninety (90) days, KCSM's railway concession ceasing to grant KCSM the rights originally provided therein, and any action to terminate any of the trust agreements. Subject to applicable cure periods contained in each Loan Agreement, an event of default could trigger acceleration of KCSM's payment obligations under the terms of each Loan Agreement.
Kansas City Southern de Mexico, S.A. de C.V.
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Date: September 08, 2011
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By:
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/s/ Michael W. Upchurch
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Michael W. Upchurch
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Chief Financial Officer (Principal Financial Officer)
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