EXHIBIT 10.1
     
 
Loan Agreement
by and between
Kansas City Southern de México, S.A. de C.V.
and
DVB Bank AG
Dated as of September 24, 2008
     
 

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Table of Contents

              Section   Heading   Page  
 
           
Article I
  Definitions     1  
 
           
Section 1.1.
  Definitions     1  
Section 1.2.
  Directly or Indirectly     1  
 
           
Article II
  Closing Date; Acquisition Date     1  
 
           
Section 2.1.
  Closing     1  
 
           
Article III
  Funding of the Loan     2  
 
           
Section 3.1.
  Funding     2  
Section 3.2.
  Notice and Closing     2  
Section 3.3.
  Up-Front Fee     2  
 
           
Article IV
  The Notes     2  
 
           
Section 4.1.
  Notes     2  
Section 4.2.
  Method of Payment     3  
Section 4.3.
  Application of Payments to Principal Amount and Interest     3  
Section 4.4.
  Termination of Interest     3  
Section 4.5.
  Transfer of Notes     3  
Section 4.6.
  Loss, Theft, Etc. of Notes     4  
Section 4.7.
  Payment of Transfer Taxes     4  
Section 4.8.
  Prepayments     4  
Section 4.9.
  Equally and Ratably Secured     6  
 
           
Article V
  Security     7  
 
           
Article VI
  Closing Conditions     7  
 
           
Article VII
  Covenants of the Borrower     7  
 
           
Section 7.1.
  Payment of the Notes     7  
Section 7.2.
  Marking of Equipment     7  
Section 7.3.
  Maintenance of Equipment; Casualty Occurrences; Eminent Domain     8  
Section 7.4.
  Possession of Equipment; Assignments     10  
Section 7.5.
  Insurance     13  
Section 7.6.
  Borrower’s Indemnities     14  
Section 7.7.
  The Lender’s Inspection Rights     18  
Section 7.8.
  Merger Covenant     19  
Section 7.9.
  Financial Statements     19  
Section 7.10.
  Increased Costs     20  

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              Section   Heading   Page  
 
           
Section 7.11.
  Withholding Tax Indemnity     22  
Section 7.12.
  Discharge of Liens     25  
Section 7.13.
  Recording     25  
Section 7.14.
  Further Assurances     25  
Section 7.15 .
  Negative Make-Whole Amount     26  
Section 7.16 .
  Equipment Use; Proceeds     26  
 
           
Article VIII
  Events of Default; Remedies of Upon An Event of Default     26  
 
           
Section 8.1.
  Events of Default     26  
Section 8.2.
  Rights and Remedies Upon Default     28  
Section 8.3.
  Waiver of Default     29  
Section 8.4.
  Obligations of Borrower Not Affected by Remedies     29  
Section 8.5.
  Borrower to Deliver Equipment to Trustee     29  
Section 8.6.
  Lender May Perform     30  
Section 8.7.
  Applications of Proceeds Received From Disposition of the Equipment     30  
 
           
Article IX
  Miscellaneous     30  
 
           
Section 9.1.
  Security; Termination     30  
Section 9.2.
  Notices     31  
Section 9.3.
  Entire Agreement; Severability     31  
Section 9.4.
  Amendments     32  
Section 9.5.
  Counterparts     32  
Section 9.6.
  Governing Law     32  
Section 9.7.
  Waiver of Jury Trial     32  
Section 9.8.
  Powers and Rights Not Waived; Remedies Cumulative     32  
Section 9.9.
  Exempted Transaction     32  
Section 9.10.
  Reproduction of Documents     33  
Section 9.11.
  Tax Disclosure     33  
Section 9.12.
  Jurisdiction, Court Proceedings     33  
Section 9.13.
  Judgment Currency     34  
Section 9.14.
  Business Days     35  
Section 9.15.
  Effect of Headings     35  
Section 9.16.
  Participations     35  
Section 9.17.
  Security Agreement     36  

         
Appendix A
  —   Definitions
Exhibit A
  —   Form of Note
Exhibit B
  —   Form of Loan Request
Exhibit C
  —   Closing Conditions
Exhibit D
  —   Form of Borrower’s Officer’s Certificate
Exhibit E
  —   Loan Agreement Supplement
Exhibit F
  —   Secretaría de Hacienda y Crédito Público Listing

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Loan Agreement
          This Loan Agreement (the “Agreement”), dated as of September 24, 2008,
is made by and between Kansas City Southern de México, S.A. de C.V., a company
incorporated under the laws of Mexico (herein, together with its permitted
successors and assigns, “Borrower”) and DVB Bank AG, a German corporation
(herein, together with its permitted successors and assigns, each a “Lender”
and, collectively, the “Lenders”).
Recitals
          Whereas, the Borrower has requested that the Lender make the Loan to
the Borrower in an aggregate principal amount not to exceed $52,200,000.00, and
the Lender has indicated its willingness to make the Loan on the terms set forth
herein.
          Now, Therefore, in consideration of the premises and agreements herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
Article I
Definitions
     Section 1.1. Definitions. Unless the context otherwise requires, all
capitalized terms used herein without definition shall have the respective
meanings set forth in Appendix A hereto for all purposes hereof; and the rules
of interpretation set forth in Appendix A hereto shall apply to this Agreement.
     Section 1.2. Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
Article II
Closing Date; Acquisition Date
     Section 2.1. Closing. (a) Subject to the terms and conditions hereof, this
Agreement shall be effective as of September 26, 2008 (the “Closing Date”) upon
the satisfaction or waiver of the conditions precedent set forth in Exhibit C
hereto.
          (b) All documents and instruments required to be delivered on the
Closing Date and in connection with the Loan pursuant to this Agreement shall be
delivered at the offices of Chapman and Cutler LLP, 111 West Monroe Street,
Suite 1700, Chicago, Illinois 60603, or at such other location as the Lender and
the Borrower may mutually agree.

 

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Article III
Funding of the Loan
     Section 3.1. Funding. (a) Amount of the Loan. (a) Subject to the
satisfaction or waiver of the conditions precedent set forth in Exhibit C
hereto, prior to 11:00 A.M., New York City time, on the Closing Date, the Lender
shall make a loan (the “Loan”) to the Borrower by delivery to the Borrower by
wire transfer immediately available funds in an amount equal to the Requested
Loan Amount as set forth in the Loan Request in accordance with the wiring
instructions set forth in the Loan Request; provided, that if the terms and
conditions for the Loan set forth herein have not been satisfied by 11:00 A.M.
New York City time on the Closing Date, the Lender shall not be obligated to
maintain the availability of its funds for the Loan unless the Lender has
received a satisfactory indemnity from the Borrower for the overnight investment
of such funds. The aggregate amount of the Loan required to be made as above
provided shall not exceed the lesser of (1) the product of the Financing
Percentage and the aggregate Equipment Cost of the Equipment being financed on
the Closing Date and (2) the Aggregate Commitment Amount. The funding by the
Lender of the Loan shall be deemed a waiver of the Loan Request. The Loan
Request shall be irrevocable and binding on the Borrower. Notwithstanding
anything in this Agreement to the contrary, the Lender shall not be obligated to
make the Loan so long as either a Default or an Event of Default shall have
occurred and be continuing.
     Section 3.2. Notice and Closing. Not later than 1:00 P.M., New York City
time, on the third Business Day preceding the Closing Date, the Borrower shall
deliver to the Lender a request (a “Loan Request”) by facsimile or other form of
electronic communication or telephone (to be promptly confirmed in writing)
substantially in the form of Exhibit B hereto setting forth:
          (i) the Closing Date;
          (ii) the Requested Loan Amount; and
          (iii) the number and type of Units for which settlement of the
purchase price will be made on the Closing Date and the Equipment Cost of such
Units.
     Section 3.3. Up-Front Fee. On the Closing Date, the Borrower shall pay to
the Lender an up-front fee in an amount equal to 0.45% of the Aggregate
Commitment Amount.
Article IV
The Notes
     Section 4.1. Notes. The Loan shall be evidenced by Notes executed by the
Borrower and issued to the Lender, substantially in the form of Exhibit A
attached hereto. The Lender shall be entitled to receive a single Note on the
Closing Date in the principal amount and with the maturity date specified in
Schedule II to the Loan Agreement Supplement dated the Closing Date.

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          The principal amount of and interest on each Note issued pursuant to
the provisions of this Agreement shall be payable as set forth in the form
thereof contained in Exhibit A. Interest on the Notes shall accrue on the
principal amount thereof remaining unpaid from time to time at the Debt Rate and
shall be computed on the basis of a 360-day year and the actual number of days
elapsed from and including the date thereof to but excluding the date of
payment. Interest shall be payable in arrears on each Payment Date. Each Note
outstanding hereunder shall be identical except in respect of principal amount
thereof.
     Section 4.2. Method of Payment. (a) The principal of, and Positive
Make-Whole Amount, if any, and interest on each Note will be payable in U.S.
dollars in immediately available funds to the Lender at HSBC Bank, New York, ABA
021001088, Account Number: 000129879, Account Name: DVB Bank AG, Frankfurt,
Reference: KCSM Locomotives 3035647, without any presentment or surrender of any
Note, except that the holder of a Note shall promptly surrender such Note to the
Borrower upon payment in full of the principal amount of and interest on such
Note and such other sums payable to such holder hereunder or under the Note.
          (b) Subject to Section 7.11, payments in respect of the Notes shall be
reduced by any taxes, fees or other charges required by applicable law to be
withheld at the source.
     Section 4.3. Application of Payments to Principal Amount and Interest. In
the case of each Note, each payment of principal thereof and Positive Make-Whole
Amount, if any, and interest thereon shall be applied, first, to the payment of
accrued but unpaid interest on such Note then due thereunder, second, to the
payment of the unpaid principal amount of such Note then due thereunder and,
third, to the payment of Positive Make-Whole Amount, if any, then due thereon.
Any prepayment of less than the entire outstanding principal amount of the Notes
pursuant to Section 4.8(b) shall be applied pro rata in accordance with the
outstanding principal amounts thereof.
     Section 4.4. Termination of Interest. The Lender shall have no further
interest in, or other right with respect to, any Equipment when and if the
principal amount of and interest on all the Notes and all other sums payable to
the Lender hereunder and under such Notes shall have been paid in full. The
Lender shall provide the Trustee notice of the termination of this Agreement
promptly following the payment in full of the principal amount of and interest
on the Notes and all other sums payable to the Lender hereunder.
     Section 4.5. Transfer of Notes. The Borrower shall cause to be kept at its
principal office a register for the registration and transfer of the Notes
(hereinafter called the “Note Register”) and the Borrower will register or
transfer or cause to be registered or transferred as hereinafter provided any
Notes issued pursuant to this Agreement. A holder of a Note intending to
transfer such Note to a new payee, or to exchange any Note or Notes held by it
for a Note or Notes of a different denomination or denominations, may surrender
such Note or Notes to the Borrower, together with a written request from such
holder for the issuance of a new Note or Notes, specifying the denomination or
denominations (each of which shall be not less than $5,000,000.00 (or, if less,
the outstanding principal amount of such Note) or such smaller denomination as
may be necessary due to the original issuance of Notes of the maturity in an

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aggregate principal amount not evenly divisible by $5,000,000.00), and, in the
case of a surrender for registration of transfer, the name and address of the
transferee or transferees. Promptly upon receipt of such documents, the Borrower
will issue a new Note or Notes in the same aggregate principal amount, in the
form set forth in Exhibit A, in the same maturity and bearing the same interest
rate as the Note or Notes surrendered, in such denomination or denominations and
payable to such payee or payees as shall be specified in the written request
from such holder. All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Borrower evidencing the same
respective obligations, and entitled to the same security and benefits under
this Agreement, as the Notes surrendered upon such registration of transfer or
exchange.
          Prior to the due presentment for registration of transfer of a Note,
the Borrower shall deem and treat the registered holder of such Note as the
absolute owner and holder of such Note for the purpose of receiving payment of
all amounts payable with respect to such Note and for all other purposes and
shall not be affected by any notice to the contrary.
     Section 4.6. Loss, Theft, Etc. of Notes. If any Note shall become
mutilated, destroyed, lost or stolen, the Borrower shall, upon the written
request of the holder of such Note, issue in replacement thereof, a new Note in
the form set forth in Exhibit A, payable to the same holder in the same
principal amount, dated the same date, of the same maturity, bearing the same
interest rate and dated the same date as the Note so mutilated, destroyed, lost
or stolen. If the Note being replaced has become mutilated, such Note shall be
surrendered to the Borrower. If the Note being replaced has been destroyed, lost
or stolen, the holder of such Note shall furnish to the Borrower such security
or indemnity as may be required by it to save the Borrower harmless and evidence
satisfactory to the Borrower of the destruction, loss or theft of such Note and
of the ownership thereof. The Borrower shall not charge the holder for the
expense in replacing any Note hereunder other than any amounts that may be
payable in accordance with Section 4.7 hereof.
     Section 4.7. Payment of Transfer Taxes. Upon and as a condition to the
transfer of any Note or Notes pursuant to Section 4.5, the Borrower may require
from the party requesting such new Note or Notes payment of a sum to reimburse
the Borrower for, or to provide funds for the payment of, any tax or other
governmental charge in connection therewith.
     Section 4.8. Prepayments. (a) All Notes issued with respect to any Unit
that has suffered or been deemed to have suffered a Casualty Occurrence shall be
prepaid in whole or in part by the Borrower if such Unit or Units are not
replaced pursuant to Section 7.3 hereof on the relevant date determined pursuant
to Section 7.3 hereof, at a price equal to the sum of (i) as to principal
thereof, an amount equal to the product obtained by multiplying the aggregate
unpaid principal amount of such Notes as at the date of such prepayment for such
Unit or Units (after deducting therefrom the principal installment, if any, due
on the date of such prepayment) by a fraction, the numerator of which shall be
the Equipment Cost of such Unit or Units of Equipment and the denominator of
which shall be the aggregate Equipment Cost of all Units of Equipment subject to
the Mexican Trust Agreement immediately prior to the date of such prepayment,
(ii) as to interest, the aggregate amount of interest accrued and unpaid in
respect of the principal amount of the Notes to be prepaid pursuant to clause
(i) above to but not including the date of

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prepayment (after deducting therefrom any principal installment due on or prior
to the date of such prepayment) and (iii) a premium in an amount equal to the
Positive Make-Whole Amount, if any, applicable in respect of the principal
amount of the Notes to be prepaid pursuant to clause (i) above on the date of
such prepayment; provided that, if such prepayment shall result in a Negative
Make-Whole Amount, the holders of the Notes so to be prepaid shall pay such
Negative Make-Whole Amount in accordance with the provisions of Section 7.15 of
this Agreement.
          (b) All Notes issued at any time outstanding hereunder may upon not
less than three (3) Business Days prior written notice be prepaid in whole or in
part upon the request of the Borrower at any time on a date selected by the
Borrower at a price equal to the unpaid principal amount thereof together with
accrued but unpaid interest thereon, up to, but not including the date of such
payment plus, an amount equal to the Positive Make-Whole Amount determined as of
the Business Day immediately preceding such prepayment date, if any, applicable
in respect of the principal amount of such Notes to be prepaid pursuant to this
Section 4.8(b); provided that, if such prepayment shall result in a Negative
Make-Whole Amount, the holders of the Notes so to be prepaid shall pay such
Negative Make-Whole Amount in accordance with the provisions of Section 7.15 of
this Agreement; provided, further, that if the Borrower shall prepay any Notes
at any time prior to the third anniversary of the Closing Date pursuant to this
Section 4.8(b), the Borrower shall also pay to the Lender in immediately
available funds the applicable Prepayment Fee.
          (c) If at any time as a result of a Change in Tax Law (as defined
below) the Borrower is or becomes obligated to make any increased payments
pursuant to Section 7.11 hereof in respect of any payment of interest on account
of any of the Notes in excess of the amounts payable without regard to such
Change in Tax Law, the Borrower may give the Lender irrevocable written notice
(a “Tax Prepayment Notice”) of the prepayment of the Notes on a specified
prepayment date (which shall be a Business Day not less than 30 days nor more
than 60 days after the date of such notice) and the circumstances giving rise to
the obligation of the Borrower to make any increased payments and the amount
thereof and stating that all of the Notes shall be prepaid on the date of such
prepayment at 100% of the principal amount so prepaid together with interest
accrued thereon up to, but not including the date of such prepayment and
Make-Whole Amount, if any, with respect thereto unless the Lender gives Borrower
written notice no more than 20 days after receipt of the Tax Prepayment Notice
(or, if earlier, the tenth day prior to the date for the payment giving rise to
such increased payments), rejecting such prepayment (a “Tax Prepayment Rejection
Notice”). The form of Tax Prepayment Rejection Notice shall also accompany the
Tax Prepayment Notice and shall state that execution and delivery thereof by the
Lender shall operate as a permanent waiver of its right to receive the increased
payments arising as a result of the circumstances described in the Tax
Prepayment Notice in respect of all future payments of interest (but not of the
Lender’s right to receive any increased payments that arise out of circumstances
not described in the Tax Prepayment Notice or which exceed the amount of the
increased payment described in the Tax Prepayment Notice). The Tax Prepayment
Notice having been given, the principal amount of the Notes together with
interest accrued thereon to the date of such prepayment and Positive Make-Whole
Amount, if any, with respect thereto shall become due and payable on such
prepayment date, unless the Lender shall timely give a Tax Prepayment Rejection
Notice. If any

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prepayment under this Section 4.8(c) shall result in a Negative Make-Whole
Amount, the holders of the Notes so to be prepaid shall pay such Negative
Make-Whole Amount in accordance with the provisions of Section 7.15 of this
Agreement,
          No prepayment pursuant to this Section 4.8(c) shall affect the
obligation of the Borrower to pay increased payments in respect of any payment
made on or prior to the date of such prepayment.
          The Borrower may not offer to prepay or prepay Notes pursuant to this
Section 4.8(c) (i) until the Borrower shall have taken commercially reasonable
steps to mitigate the requirement to make the related increased payments or
(ii) if the obligation to make such increased payments directly results or
resulted from actions taken by the Borrower (other than actions required to be
taken under applicable law), and any Tax Prepayment Notice given pursuant to
this Section 4.8(c) shall certify to the foregoing and describe such mitigation
steps, if any.
          For purposes of this Section 4.8(c): “Change in Tax Law” means
(individually or collectively with one or more prior changes) (i) an amendment
to, or change in, any law, treaty, rule or regulation of Mexico after the
Closing Date, or an amendment to, or change in, an official interpretation or
application of such law, treaty, rule or regulation after the Closing Date,
which amendment or change is in force and continuing and meets the opinion and
certification requirements described below or (ii) in the case of any other
jurisdiction that becomes a Taxing Jurisdiction after the Closing Date, an
amendment to, or change in, any law, treaty, rule or regulation of such
jurisdiction, or the application of any amendment to, or change in, an official
interpretation or application of such law, treaty, rule or regulation, in any
case after such jurisdiction shall have become a Taxing Jurisdiction, which
amendment or change is in force and continuing and meets such opinion and
certification requirements. No such amendment or change shall constitute a
Change in Tax Law unless the same would in the opinion of the Borrower (which
shall be evidenced by an Officer’s Certificate of the Borrower and supported by
a written opinion of counsel having recognized expertise in the field of
taxation in the Taxing Jurisdiction, both of which shall be delivered to the
Lender prior to or concurrently with the Tax Prepayment Notice in respect of
such Change in Tax Law) affect the deduction or require the withholding of any
Tax imposed by such Taxing Jurisdiction on any payment payable on the Notes.
          (d) If the Borrower shall desire to prepay Notes pursuant to
Section 4.8(b) above, it shall deliver a Request to the Lender giving notice of
the exercise of such right of prepayment and specifying the aggregate principal
amount of Notes to be prepaid, the date fixed for prepayment (which date shall
be at least 45 days after the delivery of such Request or such shorter period of
time as shall be satisfactory to the Lender) and shall state that payment of
such amount, together with accrued interest thereon, Make-Whole Amount, if any,
and Prepayment Fee, if any, will be made on the date of such prepayment and that
on and after such date interest on the principal amount of the Notes to be
prepaid will cease to accrue.
     Section 4.9. Equally and Ratably Secured. All Notes at any time outstanding
under this Agreement shall be equally and ratably secured by the Mexican Trust
Agreement without preference, priority or distinction on account of the date or
dates or the actual time or times of

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the issue or maturity of such Notes so that all Notes at any time issued and
outstanding hereunder shall have the same rights, Liens and preferences under
and by virtue of the Mexican Trust Agreement.
Article V
Security
The indebtedness described in the Notes, the prompt and complete payment of the
principal of, interest on and Positive Make-Whole Amount, if any, with respect
to the Notes, and all other amounts due from the Borrower with respect to the
Notes from time to time outstanding hereunder and all other amounts due from the
Borrower hereunder and the performance and observance by the Borrower of all the
agreements, covenants and provisions herein and in the Notes shall be secured by
the Equipment and the income and proceeds thereof pursuant to the terms of the
Mexican Trust Agreement. To the extent that the Borrower obtains, or is deemed
to have obtained, any right, title or interest in the Equipment and the income
and proceeds thereof, the Borrower hereby grants to the Lender, subject to
Section 7.16, a security interest in the Equipment and the income and proceeds
thereof as collateral security for the indebtedness described in the Notes and
this Agreement and the prompt and complete payment of the principal of, interest
on, and Positive Make-Whole Amount, if any, with respect to the Notes, and all
other amounts due from the Borrower with respect to the Notes from time to time
outstanding hereunder and all other amounts due from the Borrower hereunder.
Article VI
Closing Conditions
The obligation of the Lender to make the Loan hereunder shall be subject to the
satisfaction or waiver of the applicable conditions precedent set forth in
Exhibit C attached hereto on or before the Closing Date (except as otherwise
indicated).
Article VII
Covenants of the Borrower
     Section 7.1. Payment of the Notes. The Borrower shall promptly pay the
principal and interest on the Notes when due and punctually perform and observe
all of the covenants, agreements and provisions contained herein, in the Notes
and in any other instrument given as security for the Notes.
     Section 7.2. Marking of Equipment. The Borrower agrees that at or before
the Closing Date, the Borrower shall affix and maintain on each Unit the
reporting mark, if any, and identification number listed in the Loan Agreement
Supplement for such Unit and such other markings as from time to time may be
required by law or to protect the interest of the Lender in such Units. In case
any of such marks shall at any time be removed, defaced or destroyed before

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the termination of the Mexican Trust Agreement, the Borrower shall promptly
cause the same to be restored or replaced. The Borrower shall not change, or
permit to be changed, the reporting mark of any of the Equipment at any time
before the termination of the Mexican Trust Agreement (or any reporting mark
which may have been substituted as herein provided) except in accordance with a
statement of new reporting marks to be substituted therefor which shall be filed
and recorded as provided in Section 7.13 hereof.
          The Equipment may be lettered with the name, initials or insignia of
the Borrower, or of any Affiliate or any lessee of the Borrower which is
permitted to use the Equipment as herein provided, or may be lettered in some
other appropriate manner, for convenience of identification of the interest of
the Borrower, or such Affiliate or lessee therein. Except as aforesaid, during
the term of this Agreement, the Borrower shall not allow the name of any Person
to be placed on any of the Equipment as a designation if the right, title and
interest of the Trustee therein would thereby be impaired or invalidated. The
Lender shall, upon the Request of the Borrower, consent to the placing of the
name of any specified Person upon any Unit as a designation if there shall have
been delivered to the Lender an Opinion of Counsel to the effect that such
designation will not impair or invalidate the right, title and interest of the
Trustee in or to such Unit.
     Section 7.3. Maintenance of Equipment; Casualty Occurrences; Eminent
Domain.
          (a) Maintenance of Equipment. The Borrower, at its own cost and
expense, shall service, maintain, repair and keep each Unit (i) in good repair
and operating condition, ordinary wear and tear excepted, (ii) in accordance
with (a) prudent U.S. Class I railroad industry maintenance practices in
existence from time to time, (b) manufacturer’s recommendations to the extent
required to maintain such manufacturer’s warranties in effect with respect to
such Unit and (c) the requirements, if any, of any insurance policies maintained
by, or on behalf of, the Borrower with respect to such Unit, (iii) in a manner
consistent with service, maintenance, overhaul and repair practices used by the
Borrower in respect of equipment owned or leased by the Borrower similar in type
to such Unit and without discrimination between owned and leased equipment and
(iv) in compliance, in all material respects, with all applicable laws and
regulations, including any applicable United States EPA Regulations and any
applicable AAR Mechanical Standards and Federal Railroad Administration
regulations as applicable to continued use by the Borrower; provided, however,
that the Borrower may, in good faith and by appropriate proceedings diligently
conducted, contest the validity or application of any such law, regulation,
requirement or rule in any reasonable manner which does not materially adversely
affect (it being agreed that the imposition of a Lien (other than a Permitted
Lien) on, or a material risk of loss of a Unit, shall be a material adverse
affect) the rights or interests of the Lender in the Equipment or hereunder or
otherwise expose the Lender to criminal sanctions, regulatory sanctions or risk
of material civil liability.
          (b) Casualty Occurrences. Whenever any Unit shall suffer a Casualty
Occurrence, the Borrower shall within 60 days after a Responsible Officer of the
Borrower has actual knowledge of such occurrence give the Lender notice of such
occurrence (such notice to include the amount, description, reporting marks and
road numbers of all the Units of Equipment that have suffered a Casualty
Occurrence) and of its election to perform one of the following options (it
being agreed that if the Borrower shall not have given notice of such election
within such 60 days after such

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actual knowledge of such occurrence, the Borrower shall be deemed to have
elected to perform the option set forth in the following clause (1)) (1) on or
before a Payment Date selected by the Borrower that is within 180 days (or, in
the case of an event of the type described in clause (v) of the definition of
Casualty Occurrence, within 60 days) after the occurrence of the Casualty
Occurrence, the Borrower shall transfer to the Lender immediately available
funds in an amount equal to the amount required to prepay that portion of the
Notes that are to be prepaid on account of such Casualty Occurrence on such
Payment Date pursuant to Section 4.8(a) hereof or (2) so long as no Event of
Default shall have occurred and be continuing, as promptly as practicable, and
in any event on or before the Business Day next preceding the 175th day next
following the date of the Casualty Occurrence, the Borrower shall convey to the
Trustee a replacement Unit of similar type and capable of performing comparable
function as the replaced Unit (a “Replacement Unit”) with a current fair market
value, utility, condition and remaining useful life at least equal to such
replaced Unit, assuming such replaced Unit was in the condition and repair
required by the terms hereof immediately prior to such Casualty Occurrence;
provided that, if the Borrower shall not perform its obligation to effect such
replacement under this clause (2) during the period of time provided herein,
then the Borrower shall pay on a Payment Date selected by the Borrower that is
within 180 days (or, in the case of an event of the type described in clause
(v) of the definition of Casualty Occurrence, within 60 days) of the occurrence
of a Casualty Occurrence to the Lender the amounts specified in clause
(1) above. Prior to or at the time of any such conveyance and as a condition to
such replacement, the Borrower will, at its own expense:
          (i) duly execute a Loan Agreement Supplement which shall subject such
Replacement Unit to this Agreement and cause such Loan Agreement Supplement to
be delivered to the Lender for execution and, upon such execution, cause such
supplement or appropriate evidence thereof to be filed, recorded or deposited in
every public office where the supplement (or appropriate evidence thereof)
covering the replaced Unit shall have been filed, recorded or deposited;
          (ii) cause title to the Replacement Unit to be transferred to the
Mexican Trust;
          (iii) furnish to the Lender an Officer’s Certificate certifying that
the Replacement Unit is free and clear of all Liens other than Permitted Liens;
          (iv) furnish to the Lender an Opinion or Opinions of Counsel, in
substantially the same form as the Opinion or Opinions of Counsel delivered on
the Closing Date, to the effect that all filings, recordings and other action
necessary to perfect the Lender’s interests in the United States of America,
Canada and Mexico in the Replacement Unit have been accomplished;
          (v) furnish to the Lender a certificate of a qualified engineer (who
may be the chief mechanical officer employed by the Borrower) certifying that
the Replacement Unit has a fair market value, utility and remaining useful life
at least equal to the Unit replaced thereby (assuming that such replaced Unit
was maintained in the condition required by the terms of this Agreement);
provided that if the Lender shall promptly notify the Borrower in writing that
the Lender, in good faith, objects to or disagrees with the fair

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market value, utility or remaining useful life of any Replacement Unit set forth
in the certificate of the qualified engineer of the Borrower described herein,
the Lender shall be entitled, at Borrower’s expense, to obtain an appraisal from
an independent appraiser of recognized standing as to the fair market value,
utility and remaining useful life of such Replacement Unit and the parties agree
that the determination of the fair market value, utility and remaining useful
life of such Replacement Unit as set forth in the appraisal prepared by the
independent appraiser shall be final and binding upon the parties; and
          (vi) pay all of the Lender’s reasonable costs and expenses (including
reasonable attorney’s fees) incurred in connection with such replacement or
substitution, but excluding any appraisal fees.
          Upon the compliance by the Borrower with the terms of this
Section 7.3(b), the Lender shall instruct the Trustee to execute and deliver to,
or as directed in writing by, the Borrower an appropriate instrument (in due
form for recording) furnished by the Borrower conveying the replaced Unit or
Units of Equipment from the Trustee to the Borrower and releasing all proceeds,
rents, issues, profits, revenues, income thereof including leases, subleases and
use agreements relating thereto from the Mexican Trust Agreement.
Notwithstanding anything to the contrary contained herein, upon payment to the
Lender of the amounts set forth in this Section 7.3 following a Casualty
Occurrence or the delivery of a Replacement Unit in accordance with this
Section 7.3 following a Casualty Occurrence, the Borrower or its designee shall
be entitled to any amounts arising from the disposition of any Unit suffering a
Casualty Occurrence, plus any awards, insurance (other than insurance maintained
by the Lender for its own account in accordance with Section 7.5(d)) or other
proceeds and damages (including any Association of American Railroads interline
settlement paid upon a Casualty Occurrence) received by the Borrower or the
Lender by reason of such Casualty Occurrence. For all purposes hereof, each
Replacement Unit shall, after such conveyance, be deemed to have the same
Equipment Cost as the Unit it replaced.
          In the event of the substitution of a Replacement Unit, all provisions
of this Agreement relating to the Unit or Units being replaced shall be
applicable to such Replacement Unit with the same force and effect as if such
Replacement Unit was the same Unit being replaced.
     Section 7.4. Possession of Equipment; Assignments. (a) The Borrower shall
be entitled to the possession of the Equipment and to the use of the Equipment
by it or any Affiliate in the general operation of the Borrower’s or any such
Affiliate’s freight rail business upon lines of railroad owned or operated by it
or any such Affiliate, upon lines of railroad over which the Borrower or any
such Affiliate has trackage or other operating rights or over which railroad
equipment of the Borrower or any such Affiliate is regularly operated pursuant
to contract and on railroad lines of other railroads in Mexico, the United
States and Canada, in the usual interchange of traffic or in through or
run-through service and shall be entitled to permit the use of the Equipment
upon lines of railroad of connecting and other carriers in the usual interchange
of traffic or pursuant to through or run-through agreements; provided the
Borrower shall use the Equipment only for the purpose and in the manner for
which it was designed and intended and in compliance, in all material respects,
with all applicable laws, regulations and guidelines of any governmental body,
the Association of American Railroads, the Federal Railroad Administration

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and the Secretaría de Comunicaciones y Transporte and their successors and
assigns. Nothing in this Section 7.4(a) shall be deemed to constitute permission
by the Lender to any Person that acquires possession of any Unit to take any
action inconsistent with the terms and provisions of this Agreement. The rights
of any person that acquires possession of any Unit pursuant to this
Section 7.4(a) shall be subject and subordinate to the rights of the Trustee
under the Mexican Trust Agreement.
          (b) Except as otherwise provided in this Section 7.4(b) or in the case
of any requisition for use by an agency or instrumentality of the Mexican,
United States or Canadian government, the Borrower will not, without the prior
written consent of the Lender, assign any of its rights hereunder; provided,
however, that the Borrower, so long as no Event of Default shall have occurred
and be continuing under this Agreement, shall have the right, without the prior
written consent of the Lender, to lease any Unit to or permit its use by a user
organized under the laws of Mexico, organized under the federal laws or the laws
of any state of the United States or organized under the federal laws or the
laws of any province of Canada, for use by such lessee or user upon lines of
railroad owned or operated by the Borrower, any Affiliate of the Borrower, such
lessee or user or by a railroad company or companies organized under the laws of
Mexico, organized under the federal laws or the laws of any state of the United
States or organized under the federal laws or the laws of any province of
Canada, over which the Borrower, such Affiliate of the Borrower, such lessee or
user or such railroad company or companies has trackage or other operating
rights, and upon lines of railroad of connecting and other carriers in the usual
interchange of traffic or pursuant to through or run-through service agreements;
provided such lessee or user shall not, at the time of such lease, be insolvent
or subject to insolvency or bankruptcy proceedings. Each such lease or use
agreement shall be subject and subordinate to the Mexican Trust Agreement. No
lease or use agreement shall contain a purchase option. The Borrower shall not
enter into a lease or use agreement with respect to any Unit for a period in
excess of one year without the prior written consent of the Lender, which
consent shall not be unreasonably withheld or delayed. No lease or use agreement
shall in any way discharge or diminish any of the Borrower’s obligations
hereunder, and the Borrower shall remain primarily liable hereunder for the
performance of all the terms, conditions and provisions of this Agreement to the
same extent as if such lease or use agreement had not been entered into. Nothing
in this Section 7.4(b) shall be deemed to constitute permission to any Person in
possession of any Unit pursuant to any such lease or use agreement to take any
action inconsistent with the terms and provisions of this Agreement.
          Notwithstanding anything to the contrary contained herein, any
conveyance, transfer or lease, directly or indirectly, of all or substantially
all of the assets of the Borrower in accordance with Section 7.8 shall not be
deemed a breach of this covenant.
          (c) The Lender shall not assign, transfer or convey any Notes without
the prior written consent of the Borrower (which consent shall not be
unreasonably withheld) unless (i) such assignment, transfer or conveyance shall
be to an Affiliate of Lender or (ii) an Event of Default described in
Section 8.1(a) hereof shall have occurred and be continuing, in the case of
either such situation, such consent shall not be required; provided that any
assignment, transfer or conveyance shall (i) be to one or more Affiliates of the
Lender or to one or more other assignees that, so long as no Event of Default
has occurred and is then continuing, is reasonably acceptable

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to the Borrower (each an “Assignee”) and (ii) be of all or a portion (not less
than $ 5,000,000.00), in each case, of its interests, rights and obligations
under this Agreement and the Mexican Trust Agreement, including all or a portion
of the Loan, at the time made by or owing to it; provided further that (1) the
parties to each such assignment shall execute and deliver to the Lender an
instrument of assignment and acceptance; and (2) after giving effect to such
assignment, the assigning Lender shall retain (if it retains any portion) a
minimum of $5,000,000.00 original principal amount of its interests, rights, and
obligations under this Agreement and the Mexican Trust Agreement. The Lender
shall provide the Borrower with at least thirty (30) days prior written notice
of any proposed assignment, transfer or conveyance of any Note specifying the
name and address of any proposed Assignee, the proposed date of such assignment,
transfer or conveyance (the “Transfer Date”) and such additional information as
shall be necessary to determine whether the proposed transfer satisfies the
requirements of this Section 7.4(c). Upon acceptance, from and after the
effective date specified in each assignment and acceptance: (i) the Assignee
shall be a party hereto and, to the extent provided in such assignment and
acceptance, have the same rights and obligations as the Lender under this
Agreement, and the term “Lender” thereafter shall include such Assignee, and
(ii) the assigning Lender shall be released from any future obligations under
this Agreement with respect to the interest assigned; provided that in the case
of an assignment and acceptance covering all or the remaining portion of
assignor’s rights and obligations under this Agreement, such Assignee shall
continue to be entitled to the benefits of the indemnification provisions of
Sections 7.6, 7.10 and 7.11 hereof, as well as to any fees or amounts accrued
for its account hereunder and not yet paid and shall continue to be responsible
for obligations and liabilities incurred prior to such assignment. The Borrower
shall, upon request of the Assignee and delivery of the assignor’s Note, execute
new Notes in appropriate denominations and series to evidence the Loan after an
assignment and shall deliver such new Notes to the Assignee and the assignor (to
the extent it retains any portion of the Loan) in exchange for the return of the
Notes that previously evidenced a portion of the Loan.
          Notwithstanding anything to the contrary contained hereunder, if a
holder of a Note seeking to transfer its Note in accordance with this
Section 7.4(c) (a “Assignor”) shall have executed and delivered to the Borrower
a Tax Prepayment Rejection Notice and/or an Increased Cost Rejection Notice, as
applicable, with respect to such Note, the Borrower may, by written notice
delivered to the Assignor not later than fifteen (15) days prior to the proposed
Transfer Date, require the proposed Assignee to execute and deliver to the
Borrower a Tax Prepayment Rejection Notice with respect to the Change in Tax Law
giving rise to the original Tax Prepayment Notice and the Assignor’s Tax
Prepayment Rejection Notice and/or an Increased Cost Rejection Notice with
respect to the Regulatory Change giving rise to the original Increased Cost
Prepayment Notice and the Assignor’s Increased Cost Rejection Notice, as
applicable. If the proposed Assignee shall fail to execute and deliver a Tax
Prepayment Rejection Notice and/or an Increased Cost Rejection Notice, as
applicable, to the Borrower at least five (5) days prior to the proposed
Transfer Date, the Borrower may give the Assignor irrevocable written notice of
the prepayment of the Assignor’s Note on a specified prepayment date (which
shall be a Business Day not less than 30 days nor more than 60 days after the
date of such notice) stating that all of the Notes held by the Assignor shall be
prepaid on the date of such prepayment at 100% of the principal amount so
prepaid together with interest accrued thereon up to, but not including the date
of such prepayment and Positive Make-Whole Amount, if any, with respect thereto.
If any prepayment under this Section 7.4(c) shall result in a Negative
Make-Whole

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Amount, the holders of the Notes so to be prepaid shall pay such Negative
Make-Whole Amount in accordance with the provisions of Section 7.15 of this
Agreement.
     Section 7.5. Insurance.
          (a) Coverages. The Borrower will, at its own expense, cause to be
carried and maintained (i) all risk property insurance in respect of the Units
of Equipment and (ii) public liability insurance against loss or damage for
personal injury, death, environmental restoration (environmental clean up,
removal or remedial action) or property damage suffered upon, in or about any
premises occupied by the Borrower or occurring as a result of the use,
maintenance or operation of the Units of Equipment in an amount not less than
$75,000,000 and against such risks, with such insurance companies and with such
terms (including co-insurance, deductibles, limits of liability and loss payment
provisions) as are customary under the Borrower’s risk management program and in
keeping with risks assumed by U.S. Class I railroads generally, provided,
however, that the Borrower may self-insure with respect to any or all of the
above if customary under such risk management program and in keeping with risks
assumed by U.S. Class I Railroads generally, but in no event shall such
self-insurance or deductibles exceed $15,000,000 per occurrence. Such coverage
may provide for deductible amounts as are customary under the Borrower’s risk
management program and in keeping with risks assumed by U.S. Class I Railroads
generally. Notwithstanding the foregoing, all insurance coverages (including,
without limitation, self-insurance) with respect to the Equipment required under
this Agreement shall be comparable to, and no less favorable than, insurance
coverages applicable to equipment owned or leased by the Borrower which is
comparable to the Equipment. The Borrower shall, at its own expense, be entitled
to make all proofs of loss and take all other steps necessary to collect the
proceeds of such insurance.
          If any insurance required by this Agreement shall not be available to
the Borrower at renewal on a commercially reasonable basis on substantially the
same terms and conditions as then carried by the Borrower and the obtaining of
such insurance is, in the Borrower’s reasonable judgment, commercially
impracticable (taking into account both terms and premiums), the Borrower shall
obtain a written report of an independent insurance advisor of recognized
national standing, chosen by the Borrower and reasonably acceptable to the
Lender confirming in reasonable detail that such insurance, in respect of amount
or scope of coverage, is not so available on a commercially reasonable basis
from insurers of recognized standing who provide insurance to the railroad
industry. During any period with respect to which any insurance is not so
available, the Borrower shall nevertheless maintain such insurance to the
extent, with respect to amount and scope of coverage, that it is available on a
commercially reasonable basis from insurers of recognized standing who provide
insurance to the railroad industry. If any insurance which was previously
discontinued because of its commercial unavailability later becomes available,
in the Borrower’s reasonable judgment, on a commercially reasonable basis, the
Borrower shall reinstate such insurance.
          (b) Certificate of Insurance. The Borrower shall, on or prior to the
Closing Date for any Unit, furnish the Lender with a certificate signed by the
insurer or an independent insurance broker showing the insurance then
maintained, if any, with respect to the Units of Equipment financed on the
Closing Date. The Lender may, but not more than twice in any twelve-month

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period, request from the Borrower and the Borrower shall promptly thereafter
furnish to the Lender, an Officer’s Certificate or, at the Borrower’s option,
such a certificate signed by an independent insurance broker, setting forth all
insurance maintained by the Borrower pursuant to Section 7.5(a) above and
describing such policies, if any, including the amounts of coverage, any
deductible amounts and the names of the insurance providers. Such public
liability insurance and all risk property insurance shall name the Lender as an
additional insured with respect to such public liability insurance then
maintained as its interest may appear. The Borrower agrees that such insurer or
such broker will endeavor to provide written notice to the Lender at least
30 days prior to the cancellation or lapse of any insurance required to be
maintained by the Borrower in accordance with Section 7.5(a) above. Any
insurance maintained pursuant to this Section 7.5 shall (i) provide insurer’s
waiver of its right of subrogation with respect to public liability insurance
and all risk property insurance, set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability against any
additional insured except for claims as shall arise from the willful misconduct
or gross negligence of such additional insured, (ii) to the extent reasonably
commercially available, provide that such all risk property insurance as to the
interest of the Lender shall not be invalidated by any action or inaction of the
Borrower or any other Person (other than such claimant), regardless of any
breach or violation of any warranty, declaration or condition contained in such
policies by the Borrower or any other Person (other than such claimant), and
(iii) provide that all such insurance is primary without right of contribution
from any other insurance which might otherwise be maintained by the Lender and
shall expressly provide a severability of interest clause. Any insurance
maintained by the Lender shall not be considered co-insurance with any insurance
maintained by the Borrower.
          (c) Proceeds of Insurance. The entire proceeds of any property or
casualty insurance or third-party payments for damages or a Casualty Occurrence
with respect to any Unit (including any Association of American Railroads
interline settlements) received by the Trustee or the Lender shall be promptly
paid over to, and retained by, the Borrower; provided, however, any such amount
which is payable to the Borrower shall not be paid to the Borrower, or if it has
been previously paid directly to the Borrower shall not be retained by the
Borrower, if at the time of such payment an Event of Default shall have occurred
and be continuing, but shall be paid to and held by the Lender as security for
the obligations of the Borrower under this Agreement.
          (d) Additional Insurance. At any time the Lender may but shall not be
required to at its own expense carry insurance with respect to its interest in
the Equipment, provided that such insurance does not interfere with the
Borrower’s ability to insure the Equipment as required by this Section 7.5 or
adversely affect the Borrower’s insurance or the cost thereof, it being
understood that all salvage rights to each Unit and all primary subrogation
rights shall remain with the Borrower’s insurers at all times. Any insurance
payments received from policies maintained by the Lender pursuant to the
previous sentence shall be retained by the Lender without reducing or otherwise
affecting the Borrower’s obligations hereunder.
     Section 7.6. Borrower’s Indemnities. (a) Claims Defined. For the purposes
of this Section 7.6, “Claims” shall mean any and all costs, expenses,
liabilities, obligations, losses, damages, penalties, actions or suits or claims
of whatsoever kind or nature (whether or not on the basis of negligence, strict
or absolute liability or liability in tort) which may be imposed on, or

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asserted against, an Indemnified Person, as defined herein, or any Unit and,
except as otherwise expressly provided in this Section 7.6, shall include, but
not be limited to, all reasonable out-of-pocket costs, disbursements and
expenses (including reasonable and documented legal fees and expenses) paid or
incurred by an Indemnified Person in connection therewith or related thereto.
          (b) Indemnified Person Defined. For the purposes of this Section 7.6,
“Indemnified Person” means the Lender (and its successors and assigns), and its
directors, officers, employees, successors and permitted assigns, agents and
servants (the directors, officers, employees, successors and permitted assigns,
agents and servants of the Lender together with the Lender being referred to
herein collectively as the “Related Indemnitee Group” of the Lender), provided
that as a condition of any obligations of the Borrower to pay any indemnity or
perform any action under this Section 7.6 with respect to any Lender who is not
a signatory hereto, such Lender at the written request of the Borrower shall
expressly agree in writing to be bound by all the terms of this Section 7.6. In
the event that any Indemnified Person fails, after notice to such Indemnified
Person referring to this sentence, to comply with any duty or obligation under
Section 7.6(e) and (f), such Indemnified Person shall not be entitled to
indemnity under this Section 7.6 to the extent such failure to comply has a
material adverse effect on the Borrower’s ability to defend any such Claim.
          (c) Claims Indemnified. Subject to the exclusions stated in subsection
(d) below, the Borrower agrees to indemnify, protect, defend and hold harmless
each Indemnified Person on an After-Tax Basis against Claims resulting from or
arising out of or related to (whether or not such Indemnified Person shall be
indemnified as to such Claim by any other Person), (i) this Agreement or any of
the transactions contemplated hereby and thereby or resulting herefrom or
therefrom and the enforcement thereof and hereof; (ii) the ownership, lease,
operation, possession, modification, use, non-use, maintenance, sublease,
financing, substitution, control, repair, storage, alteration, violation of law
with respect to any Unit (including applicable securities laws and environmental
law), transfer or other disposition of any Unit, overhaul, testing or
registration of any Unit (including, without limitation, injury, death or
property damage of passengers, shippers or others, and environmental control,
noise and pollution regulations); (iii) the manufacture, design, purchase,
acceptance, rejection, delivery, nondelivery or condition of any Unit
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement);
and (iv) any breach of or failure to perform or observe, or any other
non-compliance with, any covenant, condition or agreement to be performed by, or
other obligation of, the Borrower under this Agreement, or the falsity when made
of any representation or warranty of the Borrower in this Agreement or in any
document or certificate delivered in connection therewith.
          (d) Claims Excluded. The following are excluded from the agreement to
indemnify under this Section 7.6:
          (i) Claims with respect to any Unit to the extent attributable to acts
or events occurring after (A) the occurrence of a Casualty Occurrence with
respect to such Unit under Section 7.3 hereof, the last to occur of (x) if an
Event of Default exists, the elimination of such Event of Default and the
payment of all amounts due under this

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Agreement, (y) the payment of all amounts due from the Borrower in connection
with any such event and (z) the conveyance of such Unit by the Trustee to the
Borrower in accordance with the terms herein or the terms of the Mexican Trust
Agreement or (B) in all other cases, with respect to such Unit, the earlier to
occur of (y) if an Event of Default exists, the elimination of such Event of
Default and the payment of all amounts due under this Agreement and (z) the
conveyance of such Unit by the Trustee to the Borrower in accordance with the
terms herein or the terms of the Mexican Trust Agreement;
          (ii) with respect to any particular Indemnified Person, Claims which
are Taxes except Taxes described in Section 7.11. Except as expressly provided
in this Agreement (including the foregoing sentence), the Borrower’s entire
obligation with respect to Taxes and losses of tax benefits being fully set out
in Section 7.11;
          (iii) with respect to any particular Indemnified Person, Claims to the
extent attributable to the gross negligence or willful misconduct of (other than
gross negligence or willful misconduct imputed as a matter of law to such
Indemnified Person solely by reason of its interest in the Equipment), or to the
breach of any contractual obligation by, or the falsity or inaccuracy of any
representation or warranty of such Indemnified Person or any of such Indemnified
Person’s Related Indemnitee Group;
          (iv) with respect to any particular Indemnified Person, Claims to the
extent attributable to any transfer (other than pursuant to Section 7.3 or
Article VIII hereof) by such Indemnified Person of any interest in the Units of
Equipment or this Agreement;
          (v) with respect to any particular Indemnified Person, any Claim to
the extent attributable to the offer, sale, transfer or disposition (voluntary
or involuntary) by, or on behalf of, such Indemnified Person of the Notes
(except, with respect to a transfer of a Note in accordance with the terms of
Section 7.4(c), to the extent of the indemnification expressly set forth
therein), any interest in this Agreement, or any similar security, other than a
transfer by such Indemnified Person of its interests in any Unit pursuant to
Section 7.3 hereof or otherwise attributable to an Event of Default that has
occurred and is continuing;
          (vi) any Claim to the extent attributable to the authorization or
giving or unreasonable withholding by such Indemnified Person of any future
amendments, supplements, modifications, alterations, waivers or consents with
respect to any of this Agreement, other than such as have been requested by or
consented to by the Borrower or necessary or required to effectuate the purpose
or intent of this Agreement or as are expressly required by this Agreement;
          (vii) any Claim which relates to a cost, fee or expense payable by a
Person other than the Borrower or the Borrower pursuant to this Agreement;
          (viii) any Claim which is an ordinary and usual operating or overhead
expense of such Indemnified Person other than such expenses attributable to the
occurrence of an Event of Default hereunder;

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          (ix) with respect to any particular Indemnified Person, any Claim
resulting from the imposition of any Lender’s Lien attributable to such
Indemnified Person; or
          (x) with respect to any particular Indemnified Person, any Claim, to
the extent the risk thereof has been expressly assumed by such Indemnified
Person in connection with the exercise by such Indemnified Person of the right
of inspection granted under Section 7.7 hereof.
          (e) Insured Claims. In the case of any Claim indemnified by the
Borrower hereunder which is covered by a policy of insurance maintained by the
Borrower pursuant to Section 7.5 of this Agreement or otherwise, each
Indemnified Person agrees to provide reasonable cooperation at the expense of
the Borrower to the insurers in the exercise of their rights to investigate,
defend or compromise such Claim as may be required to retain the benefits of
such insurance with respect to such Claim.
          (f) Claims Procedure. An Indemnified Person shall, upon becoming aware
of any Claim for which indemnification is sought, promptly notify the Borrower
in writing of such Claim; provided, however, that, notwithstanding the last
sentence of Section 7.6(b), the failure to give such notice shall not release
the Borrower from any of its obligations under this Section 7.6, except to the
extent that such failure to give notice shall have a material adverse effect on
the Borrower’s ability to defend such claim or recover proceeds under any
insurance policies maintained by the Borrower. Subject to the rights of insurers
under policies of insurance maintained by the Borrower, the Borrower shall have
the right in each case at the Borrower’s sole expense to investigate, and the
right in its sole discretion to defend or compromise, any Claim for which
indemnification is sought under this Section 7.6 and the Indemnified Person
shall cooperate, at Borrower’s expense, with all reasonable requests of the
Borrower in connection therewith; provided that no right to defend or compromise
such Claim shall exist on the part of the Borrower with respect to any
Indemnified Person if (1) an Event of Default shall have occurred and be
continuing or (2) such Claim would entail a significant risk to the Lender of
any criminal liability, regulatory sanction or material civil liability;
provided, further, that no right to compromise or settle such Claim shall exist
unless the Borrower agrees in writing to pay the amount of such settlement or
compromise. In any case in which any action, suit or proceeding is brought
against any Indemnified Person in connection with any Claim, the Borrower may,
and upon such Indemnified Person’s request will, at the Borrower’s expense
resist and defend such action, suit or proceeding, or cause the same to be
resisted or defended by counsel selected by the Borrower and reasonably
acceptable to such Indemnified Person and, in the event of any failure by the
Borrower to do so, the Borrower shall pay all costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) incurred by such
Indemnified Person in connection with such action, suit or proceeding. Where the
Borrower or the insurers under a policy of insurance maintained by the Borrower
undertake the defense of an Indemnified Person with respect to a Claim, no
additional legal fees or expenses of such Indemnified Person in connection with
the defense of such Claim shall be indemnified hereunder unless such fees or
expenses were incurred at the request of the Borrower or such insurers;
provided, however, that if in the written opinion of counsel to such Indemnified
Person an actual or potential material conflict exists where it is advisable for
such Indemnified Person to be represented by separate counsel, the reasonable
fees and expenses of any such separate counsel

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shall be paid by the Borrower. Subject to the requirements of any policy of
insurance, an Indemnified Person may participate at its own expense in any
judicial proceeding controlled by the Borrower pursuant to the preceding
provisions; provided that such party’s participation does not, in the opinion of
the independent counsel appointed by the Borrower or its insurers to conduct
such proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 7.6(f).
Nothing contained in this Section 7.6(f) shall be deemed to require an
Indemnified Person to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto.
          (g) Subrogation. If a Claim indemnified by the Borrower under this
Section 7.6 is paid by the Borrower and/or an insurer under a policy of
insurance maintained by the Borrower, the Borrower and/or such insurer, as the
case may be, shall be subrogated to the extent of such payment to the rights and
remedies of the Indemnified Person (other than under insurance policies
maintained by such Indemnified Person) on whose behalf such Claim was paid with
respect to the transaction or event giving rise to such Claim. So long as no
Event of Default shall have occurred and be continuing, should an Indemnified
Person receive any refund, in whole or in part, with respect to any Claim paid
by the Borrower hereunder, it shall promptly pay over the amount refunded (but
not in excess of the amount the Borrower or any of its insurers has paid in
respect of such Claim paid or payable by such Indemnified Person on account of
such refund) to the Borrower.
          (h) Waiver of Certain Claims. The Borrower hereby waives and releases
any Claim now or hereafter existing against any Indemnified Person arising out
of death or personal injury to personnel of the Borrower, loss or damage to
property of the Borrower, or the loss of use of any property of the Borrower,
which may result from or arise out of the condition, use or operation of the
Equipment during the term of this Agreement, including without limitation any
latent or patent defect whether or not discoverable.
          (i) Conflicting Provisions. The general indemnification provisions of
this Section 7.6 are not intended to waive or supersede any specific provisions
of, or any rights or remedies of the Borrower under, this Agreement to the
extent such provisions apply to any Claim.
     Section 7.7. The Lender’s Inspection Rights. The Lender shall have the
right, but not the obligation, at its sole cost and expense (unless, in the case
of any such expense, an Event of Default shall have occurred and be continuing)
and risk (including, without limitation, the risk of personal injury or death),
by its authorized representatives, to the extent within the Borrower’s control:
on not more than one occasion in any 12-month period (unless an Event of Default
shall have occurred and be continuing) or during the last 12 months prior to the
final maturity of the Notes, to inspect the Equipment and the Borrower’s records
with respect thereto, during the Borrower’s normal business hours and upon
reasonable prior notice to the Borrower; provided, however, that the Borrower
shall not be liable for any injury to, or the death of, any Person exercising,
either on behalf of the Lender or any prospective user, the rights of inspection
granted under this Section 7.7 except as may result or arise from the Borrower’s
gross negligence or willful misconduct. No inspection pursuant to this
Section 7.7 shall interfere with the use, operation or maintenance of the
Equipment or the normal conduct of the Borrower’s

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business, and the Borrower shall not be required to undertake or incur any
additional liabilities in connection therewith.
     Section 7.8. Merger Covenant. The Borrower shall not consolidate with or
merge into any other Person (other than an Affiliate of the Borrower) or convey,
transfer or lease substantially all of its assets as an entirety to any Person
(other than an Affiliate of the Borrower) unless (i) the Person formed by such
consolidation or into which the Borrower is merged or the Person which acquires
by conveyance, transfer or lease substantially all of the assets of the Borrower
as an entirety shall execute and deliver to the Lender an agreement containing
the assumption by such successor entity of the due and punctual performance and
observance of each covenant and condition of this Agreement to be performed or
observed by the Borrower, (ii) immediately after giving effect to such
transaction, no Event of Default shall have occurred solely as a result of such
consolidation or merger or such conveyance, transfer or lease and (iii) such
transaction does not result in a Material Adverse Effect. Upon such
consolidation or merger, or any conveyance, transfer or lease of substantially
all of the assets of the Borrower as an entirety in accordance with this
Section 7.8, the successor entity formed by such consolidation or into which the
Borrower is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Borrower under this Agreement with the same effect as if such successor
entity had been named as the Borrower herein. If the Borrower shall have
consolidated with or merged into any other Person or conveyed, transferred or
leased substantially all of its assets, such assets to include the Equipment and
the Borrower’s interest in this Agreement, the Person owning such interest after
such event shall deliver to the Lender an opinion of counsel (which counsel may
be such Person’s in-house counsel) confirming that the assumption agreement
pursuant to which such Person assumed the obligations of the Borrower shall have
been duly authorized, executed and delivered by such Person and that such
agreement is the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms.
     Section 7.9. Financial Statements. The Borrower shall furnish the following
to the Lender:
          (i) unless included in a Form 10-Q delivered or deemed delivered under
clause (iii) below, as soon as available and in any event within 60 days after
the end of each quarterly period, except the last, of each fiscal year,
consolidated balance sheets of the Borrower and its consolidated Subsidiaries as
at the end of such period, together with the related consolidated statements of
income and cash flows of the Borrower and its consolidated Subsidiaries for the
period beginning on the first day of such fiscal year and ending on the last day
of such quarterly period, setting forth in each case (except for the
consolidated balance sheet) in comparative form the figures for the
corresponding periods of the previous fiscal year, all in reasonable detail and
prepared in accordance with U.S. generally accepted accounting principles and
certified by any Responsible Officer of the Borrower;
          (ii) unless included in a Form 10-K delivered or deemed delivered
under clause (iii) below, as soon as available and in any event within 120 days
after the last day of each fiscal year, a copy of the Borrower’s annual audited
report covering the

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operations of the Borrower and its consolidated Subsidiaries, including
consolidated balance sheets, and related consolidated statements of income and
retained earnings and consolidated statement of cash flows of the Borrower and
its consolidated Subsidiaries for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with U.S. generally accepted accounting
principles applied on a consistent basis, which statements will have been
certified by a firm of independent public accountants of recognized national
standing selected by the Borrower;
          (iii) as soon as available, one copy of each Annual Report on Form
10-K (or any successor form), Quarterly Report on Form 10-Q (or any successor
form) and Form 8-K filed by the Borrower with the SEC or any successor agency,
provided that, as long as the Borrower is subject to informational requirements
of the Securities Exchange Act of 1934 and in accordance therewith files reports
and other information with the SEC, the Lender shall be deemed to have been
furnished the foregoing reports and forms required under clauses (i), (ii) and
(iii) at the time the Lender may electronically access such reports and forms by
means of the SEC’s homepage on the internet or at the Borrower’s homepage on the
internet, provided, further, in the event that the Borrower shall cease to be
subject to such informational requirements, the Borrower will provide the Lender
with 90 days’ advance written notice and thereafter the Borrower shall directly
furnish such reports and forms to the Lender;
          (iv) as soon as available and in any event within 120 days after the
last day of each fiscal year, a certificate signed by any Responsible Officer of
the Borrower stating that he/she has reviewed the activities of the Borrower
during such year and that the Borrower during such year has kept, observed,
performed and fulfilled each and every covenant, obligation and condition
contained herein, or if an Event of Default shall exist or if an event has
occurred and is continuing which, with the giving of notice or the passage of
time or both, would constitute an Event of Default, specifying such Event of
Default and all such events and the nature and status thereof;
          (v) as soon as available and in any event within 120 days after the
last day of each fiscal year, a certificate signed by any Responsible Officer of
the Borrower (i) stating whether any Units are subject to a lease or use
agreement as of the end of such fiscal year and (ii) if any such Units are
subject to a lease or use agreement as of the end of such fiscal year, setting
forth the reporting marks of the Units being leased or used by another entity
and the name of the entity leasing or using such Units; and
          (vi) from time to time, such additional information kept by the
Borrower in the ordinary course of business reasonably related to the
transactions contemplated hereby as the Lender may reasonably request.
     Section 7.10. Increased Costs. (a) In the event of (x) a Regulatory Change
or (y) a judgment being rendered after the Closing Date which subjects or
imposes any increase in the actual cost to the Lender of agreeing to make or
making, funding or maintaining the Loan evidenced by the Notes, then, within
twenty (20) days after delivery to the Borrower of an

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Officer’s Certificate of the Lender setting forth in reasonable detail the event
giving rise to such increase in cost and the basis for the determination of the
amount of such increase in cost, the Borrower shall pay to the Lender such
amount as shall be necessary to reimburse the Lender for such increase in
respect of any period which is no more than ninety (90) days prior to such
demand; provided, however, that the Lender shall not be entitled to assert any
claim under this Section 7.10(a) in respect of Taxes. Such Officer’s Certificate
shall, in the absence of manifest error, be binding and conclusive on the
Borrower. The Lender shall notify the Borrower as soon as possible of the
occurrence of the event by reason of which it is entitled to make a claim as
described in this Section 7.10(a), but the failure to give such notice shall not
affect the obligations of the Borrower hereunder. In determining the amount of
compensation payable by the Borrower under this Section 7.10(a), the Lender
shall use reasonable efforts to take actions that are not materially adverse to
the Lender to minimize the compensation payable by the Borrower including using
reasonable efforts to obtain refunds or credit and any compensation paid by the
Borrower, which is later determined not to have been properly payable, shall
forthwith be reimbursed by such holder to the Borrower.
          (b) For purposes of Section 7.10(a), “Regulatory Change” means with
respect to the Lender (i) any change after the Closing Date in the laws or
regulations of Mexico or any State thereof or any Permitted Jurisdiction or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks including the Lender, as the case may be, of or
under any law or regulation (whether or not having the force of law) of Mexico
or any State thereof or any Permitted Jurisdiction by any court or governmental
or monetary authority charged with the interpretation or administration thereof
and (ii) any change after the Closing Date in any regulation, guideline or
requirement or in the interpretation or administration thereof (whether or not
having the force of law) issued by any governmental or monetary authority
applying to a class of banks including the Lender, as the case may be, or the
bank holding company of Lender, as the case may be (including any change after
the Closing Date in the regulations, guidelines or requirements or
interpretations or administration of any of the foregoing implementing the
proposals for a risk-based capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper entitled
“International Convergence of Capital Measurement and Capital Standards”
(commonly known as Basel II) dated June 2004, as modified and supplemented from
time to time).
          (c) The Lender shall, if seeking compensation under this Section 7.10,
use commercially reasonable efforts (at its own expense) that are not materially
adverse to the Lender to mitigate the amount of compensation, including
designating a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the reasonable
judgment of the Lender, result in any non-de minimis economic, legal or
regulatory disadvantage to the Lender. The Borrower shall not be required to
make payments under this Section 7.10 to the Lender if (A) a claim hereunder
arises solely through circumstances peculiar to the Lender and which do not
affect commercial banks in the jurisdiction of organization of the Lender
generally, (B) so long as no Event of Default described in Section 8.1(a) hereof
shall have occurred and be continuing, the Lender is not organized under the
laws of, or a resident in, a Permitted Jurisdiction, or (C) the claim arises out
of a voluntary relocation by the Lender of its lending office (it being
understood that any such relocation effected pursuant to the first sentence of
this Section 7.10(c) is not “voluntary”), or (D) the

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Lender is not seeking similar compensation for such costs from its borrowers
generally in similarly situated commercial loans.
          (d) If at any time the Borrower is or becomes obligated to make any
payment of increased cost pursuant to this Section 7.10, the Borrower may give
the Lender irrevocable written notice (an “Increased Cost Prepayment Notice”) of
the prepayment of the Notes on a specified prepayment date (which shall be a
Business Day not less than 30 days nor more than 60 days after the date of such
notice) and the circumstances giving rise to the obligation of the Borrower to
make such payment of increased cost and the amount thereof and stating that all
of the Notes shall be prepaid on the date of such prepayment at 100% of the
principal amount so prepaid together with interest accrued thereon up to, but
not including, the date of such prepayment and Make-Whole Amount, if any, with
respect thereto, unless the Lender gives Borrower written notice no more than
20 days after receipt of the Increased Cost Prepayment Notice (or, if earlier,
the tenth day prior to the date for the payment giving rise to such payment of
increased cost), that it rejecting such prepayment (an “Increased Cost Rejection
Notice”). The form of Increased Cost Rejection Notice shall also accompany the
Increased Cost Prepayment Notice and shall state that execution and delivery
thereof by the Lender shall operate as a permanent waiver of its right to
receive the payment of increased cost arising as a result of the circumstances
described in the Increased Cost Prepayment Notice (but not of the Lender’s right
to receive any payments of increased cost that arise out of circumstances not
described in the Increased Cost Prepayment Notice or which exceed the amount of
the payment of increased cost described in the Increased Cost Prepayment
Notice). The Increased Cost Prepayment Notice having been given, the principal
amount of the Notes together with interest accrued thereon to the date of such
prepayment and Positive Make-Whole Amount, if any, with respect thereto shall
become due and payable on such prepayment date, unless the Lender shall timely
give an Increased Cost Rejection Notice. If any prepayment under this
Section 7.10(d) shall result in a Negative Make-Whole Amount, the holders of the
Notes so to be prepaid shall pay such Negative Make-Whole Amount in accordance
with the provisions of Section 7.15 of this Agreement.
     Section 7.11. Withholding Tax Indemnity. (a) All payments whatsoever under
this Agreement and the Notes will be made by the Borrower free and clear of
withholding or deduction for any present or future Taxes by or on behalf of any
jurisdiction from or through which the Borrower makes such payments (hereinafter
a “Taxing Jurisdiction”) imposed or levied on payments of interest, unless the
withholding or deduction of such Tax is compelled by law.
          If any deduction or withholding for any Tax of a Taxing Jurisdiction
imposed or levied on payments of interest shall at any time be required in
respect of any amounts to be paid by the Borrower under this Agreement or the
Notes, the Borrower will pay to the relevant Taxing Jurisdiction the full amount
required to be withheld or deducted and pay to the Lender such additional
amounts as may be necessary in order that the net amounts paid to the Lender
pursuant to the terms of this Agreement or the Notes after such deduction or
withholding (including, without limitation, any required deduction or
withholding of Tax on or with respect to such additional amount) and after
taking into account tax benefits to the Lender of credits and deductions
actually realized by the Lender as a result of all such deductions and
withholdings,

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shall be not less than the amounts then due and payable to the Lender under the
terms of this Agreement or the Notes before the assessment of such Tax, provided
that no payment of any additional amounts shall be required to be made for or on
account of:
          (i) any Tax that would not have been imposed but for the existence of
any present or former connection between the Lender and the Taxing Jurisdiction,
other than the mere holding of the relevant Note or the receipt of payments
thereunder or in respect thereof, including, without limitation, the Lender
being or having been a citizen or resident thereof, or being or having been
present or engaged in trade or business therein or having or having had an
establishment, office, fixed base or branch therein, provided that this
exclusion shall not apply with respect to a Tax that would not have been imposed
but for the Borrower, after the Closing Date, opening an office in, moving an
office to, reincorporating in, or changing the Taxing Jurisdiction from or
through which payments on account of this Agreement or the Notes are made to,
the Taxing Jurisdiction imposing the relevant Tax;
          (ii) any Tax that would not have been imposed but for the delay or
failure by the Lender (following a written request by the Borrower) in the
filing with the relevant Taxing Jurisdiction of Forms (as defined below) that
are required to be filed by the Lender to avoid or reduce such Taxes, provided
that the filing of such Forms would not (in the Lender’s reasonable judgment)
result in any confidential or proprietary income tax return information being
revealed, either directly or indirectly, to any Person and such delay or failure
could have been lawfully avoided by the Lender and the Lender was legally
eligible to provide such Forms without unindemnified adverse consequences (other
than certain de minimis costs), and provided further that the Lender shall be
deemed to have satisfied the requirements of this clause (ii) upon the good
faith completion and submission of such Forms as may be specified in a written
request of the Borrower no later than 60 days after receipt by the Lender of
such written request (accompanied by copies of such Forms and related
instructions, if any, all in the English language or with an English translation
thereof); or
          (iii) any combination of clauses (i) and (ii) above;
and provided further that in no event shall the Borrower be obligated to pay
such additional amounts to a holder of the Notes (1) so long as no Event of
Default described in Section 8.1(a) hereof shall have occurred and be
continuing, if such holder is organized under the laws of, or a resident in, any
jurisdiction other than a Permitted Jurisdiction on the date such holder
acquires its Note, (2) except as provided in clause (3) below, to the extent
such additional amounts are attributable to a rate of withholding or deduction
imposed by such Taxing Jurisdiction that is in excess of 4.9% or (3) unless such
Tax is imposed or levied by reason of a Change in Tax Law (for this purpose
only, with respect to any Lender other than the Original Lender, “Change in Tax
Law” shall mean a change in tax law occurring after the date on which such
Lender acquires its Note).
          By acceptance of any Note, the Lender agrees, subject to the
limitations of clause (ii) above, that it will from time to time with reasonable
promptness (x) duly complete and deliver to

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or as reasonably directed by the Borrower all such forms, certificates,
documents and returns provided to the Lender by the Borrower (collectively,
together with instructions for completing the same, “Forms”) required to be
filed by or on behalf of the Lender in order to avoid or reduce any such Tax
pursuant to the provisions of an applicable statute, regulation or
administrative practice of the relevant Taxing Jurisdiction or of a tax treaty
between Mexico and such Taxing Jurisdiction and (y) provide the Borrower with
such information with respect to the Lender as the Borrower may reasonably
request in order to complete any such Forms, provided that nothing in this
Section 7.11 shall require the Lender to provide copies of its tax return or
other information with respect to any such Form or otherwise if in the opinion
of the Lender such Form or disclosure of information would involve the
disclosure of tax return or other information that is confidential or
proprietary to the Lender, and provided further that the Lender shall be deemed
to have complied with its obligation under this paragraph with respect to any
Form if such Form shall have been duly completed and delivered by the Lender to
the Borrower or mailed to the appropriate taxing authority, whichever is
applicable, within 60 days following a written request of the Borrower (which
request shall be accompanied by copies of such Form and English translations of
any such Form not in the English language) and, in the case of a transfer of any
Note, at least 90 days prior to the relevant interest payment date.
          On or before the Closing Date, the Borrower will furnish the Lender
with copies of the appropriate Form (and English translation if required as
aforesaid) currently required to be filed in Mexico pursuant to clause (ii) of
the second paragraph of this Section 7.11(a), if any, and in connection with the
transfer of any Note the Borrower will furnish the transferee of such Note with
copies of any Form and English translation then required.
          If any payment is made by the Borrower to or for the account of the
Lender after deduction for or on account of any Taxes, and increased payments
are made by the Borrower pursuant to this Section 7.11, then, if the Lender
determines that it has received or been granted a tax benefit with respect to
such Taxes or such increased payments, the Lender shall, to the extent it has
not taken such tax benefits into account in calculating and reducing Borrower’s
payments pursuant to this Section 7.11 and to the extent it can do so without
prejudice to the retention of the amount of such tax benefit, reimburse to the
Borrower such amount as the Lender shall determine to be attributable to the
relevant Taxes or deduction or withholding or increased payments. Nothing herein
contained shall interfere with the right of the Lender to arrange its tax
affairs in whatever manner it thinks fit and, in particular, the Lender shall
not be under any obligation to claim relief from its corporate profits or
similar tax liability in respect of such Tax in priority to any other claims,
reliefs, credits or deductions available to it or (other than as set forth in
clause (ii) above) oblige the Lender to disclose any information relating to its
tax affairs or any computations in respect thereof.
          If the Borrower makes payment to or for the account of the Lender and
the Lender is entitled to a refund of the Tax to which such payment is
attributable upon the making of a filing (other than a Form described above),
then the Lender shall, as soon as practicable after receiving written request
from the Borrower (which shall specify in reasonable detail and supply the
refund forms to be filed) use reasonable efforts to complete and deliver such
refund forms to or as directed by the Borrower, subject, however, to the same
limitations with respect to Forms as are set forth above.

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          The obligations of the Borrower under this Section 7.11 shall survive
the payment or transfer of any Note and the provisions of this Section 7.11
shall also apply to successive transferees of the Notes.
          (b) The Lender shall, if seeking increased payments under this
Section 7.11 (other than with respect to the Mexican withholding taxes
applicable to interest payments on the date hereof), use commercially reasonable
efforts (at its own expense) to mitigate the amount of increased payments,
including designating a different lending office if such designation will avoid
the need for, or reduce the amount of, such increased payments and will not, in
the reasonable judgment of the Lender, result in any non-de minimis economic,
legal or regulatory disadvantage to the Lender.
          (c) On or before the Closing Date, the Lender will furnish the
Borrower with a certificate, or other documentation acceptable to the Borrower,
from the applicable governmental authority of a Permitted Jurisdiction
evidencing the Lender’s residency in such Permitted Jurisdiction.
     Section 7.12. Discharge of Liens. The Borrower will not directly or
indirectly create, incur, assume or suffer to exist any Lien on or with respect
to any Units of Equipment or the Borrower’s interest therein under this
Agreement, except Permitted Liens, and the Borrower shall promptly, at its own
expense, take such action as may be necessary to duly discharge (by bonding or
otherwise) any such Lien not excepted above if the same shall arise at any time.
     Section 7.13. Recording. (a) On or prior to the Closing Date, the Borrower
will (x) at its own expense, (i) cause this Agreement and the Loan Agreement
Supplement dated the Closing Date, or appropriate evidence thereof, to (A) be
duly filed and recorded with the STB in accordance with 49 U.S.C. § 11301 and
(B) be deposited with the Registrar General of Canada pursuant to Section 105 of
the Canada Transportation Act and (ii) cause a Uniform Commercial Code
precautionary financing statement covering the security interest created by or
pursuant to this Agreement naming the Borrower, as debtor, and the Lender, as a
secured party, to be filed with (1) the Recorder of Deeds of the District of
Columbia and (2) the Secretary of State of the State of Missouri and (y) at
Lender’s expense and upon the written request of Lender, cause or permit such
other filings and notices to be filed or made as necessary or appropriate to
protect the interests of Lender, and will furnish Lender proof thereof.
          (b) The Borrower, at its sole expense, shall (i) promptly file the
Mexican Trust Agreement with the Mexican Railroad Registry (Registro Ferroviario
Mexicano) and (ii) provide the Lender with evidence of the completion of the
registration of the Mexican Trust Agreement with the Mexican Railroad Registry
(Registro Ferroviario Mexicano) promptly following its receipt of the same. The
Lender hereby appoints and constitutes the Borrower its agent and
attorney-in-fact to file, record or register, in the name and for the account of
the Lender and the Borrower, as their interests may appear, statements or
notices required by the Mexican Railroad Registry (Registro Ferroviario
Mexicano).
     Section 7.14. Further Assurances. The Borrower will duly execute and
deliver to the Lender such further documents and assurances and take such
further action as the Lender may

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from time to time reasonably request in order to effectively carry out the
intent and purpose of this Agreement and the Mexican Trust Agreement and to
establish and protect the rights and remedies created in favor of the Lender
hereunder, including, without limitation, if requested by the Lender, the
execution and delivery of supplements or amendments hereto, in recordable form,
subjecting to this Agreement and the Mexican Trust Agreement any Replacement
Unit and the recording or filing of counterparts hereof or thereof in accordance
with the laws of such jurisdiction as the Lender may from time to time deem
advisable; provided that this sentence is not intended to impose upon Borrower
any additional liabilities not otherwise contemplated by this Agreement and the
Mexican Trust Agreement; provided further that except for the Uniform Commercial
Code financing statement described in Section 7.13(a)(iii), nothing contained
herein shall require the Borrower to file or record, or cause to be filed or
recorded, or bear the cost or expense of any filing or recordation of, any
Uniform Commercial Code financing statement (including any continuation
statement) absent a change in law which requires that such filings be made to
protect the interests of the Lender.
     Section 7.15. Negative Make-Whole Amount. Each holder agrees, by its
acceptance of a Note, that in the event of any redemption of the Notes pursuant
to Section 4.8, Section 7.4, Section 7.10 or Section 9.16 or any acceleration of
the Notes pursuant to Section 8.2, if the calculation of the Make-Whole Amount
results in Negative Make-Whole Amount, then such Negative Make-Whole Amount
shall be due on the date of such redemption as provided for in Section 4.8,
Section 7.4, Section 7.10 or Section 9.16 or Section 8.2, as the case may be,
and such Negative Make-Whole Amount shall be paid in Dollars on such date by the
holders of the Notes (each such holder to pay its ratable portion of such
Negative Make-Whole Amount in accordance with its percentage of the Notes then
being prepaid or purchased) directly to the Borrower free of any Lien in the
case of any redemption pursuant to Section 4.8, Section 7.4, Section 7.10 or
Section 9.16 and if at any time that the Borrower is required to make a payment
of the aggregate unpaid principal amount of all Notes then outstanding plus the
accrued but unpaid interest thereon in connection with any acceleration of the
Notes pursuant to Section 8.2, there shall exist an obligation of the holders of
the Notes to pay any Negative Make-Whole Amount, there shall be deducted from
such payment of the aggregate unpaid principal amount of all Notes then
outstanding plus the accrued but unpaid interest thereon an amount equal to the
aggregate amount of such Negative Make-Whole Amount owed by the holders of the
Notes at such time.
     Section 7.16. Equipment Use; Proceeds. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, so long as no Event of
Default shall have occurred and be continuing, the Borrower shall be entitled to
use, possess and operate the Equipment and retain all income, proceeds and
revenues therefrom for its own benefit and disposition.
Article VIII
Events of Default; Remedies of Upon An Event of Default
     Section 8.1. Events of Default. The following events shall constitute
Events of Default hereunder (whether any such event shall be voluntary or
involuntary or come about or be

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effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and each such Event of Default shall be
deemed to exist and continue so long as, but only as long as, it shall not have
been remedied:
          (a) default by the Borrower in making any payment when due of
principal of, or Positive Make-Whole Amount, if any, or interest on, any Note or
Notes and the continuance of such default unremedied for five (5) Business Days
after such payment shall become due hereunder or default by the Borrower in
making any payment when due of any other amount owing with respect to any Note
or Notes and the continuance of such default unremedied for 30 days after
receipt by the Borrower of written notice of such failure from the Lender and
demanding the same be remedied; or
          (b) any representation or warranty made by the Borrower in this
Agreement is untrue or incorrect in any material respect as of the date of
issuance or making thereof and such untruth or incorrectness shall continue to
be material and unremedied for a period of 30 days after the earlier to occur of
(x) knowledge of a Responsible Officer of the Borrower or (y) receipt by the
Borrower of written notice specifying such incorrectness, stating that such
incorrectness is a default hereunder and requiring it to be remedied from the
Lender or from any holder of a Note; provided that, if such untruth or
incorrectness is capable of being remedied, no such untruth or incorrectness
shall constitute an Event of Default hereunder for a period of 180 days after
receipt of such written notice so long as the Borrower is diligently proceeding
to remedy such untruth or incorrectness; or
          (c) other than as set forth in clauses (a), (b), (f) or (g), any
failure by the Borrower to observe or perform any covenant to be observed or
performed by the Borrower hereunder or under the Notes and such failure shall
continue unremedied for 30 days after the earlier to occur of (x) knowledge of a
Responsible Officer of the Borrower or (y) receipt by the Borrower of a written
notice thereof from the Lender and demanding the same to be remedied; provided
that, if such failure is capable of being remedied, no such failure shall
constitute an Event of Default hereunder for a period of 180 days after such
written notice so long as the Borrower is diligently proceeding to remedy such
failure; or
          (d) the Borrower shall (i) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy (concurso mercantil), insolvency or
other similar law now or hereafter in effect, or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or (ii) consent to any such relief or to the
appointment of or taking possession by any such official in any voluntary case
or other proceeding commenced against it, or (iii) admit in writing its
inability to pay its debts generally as they come due, or (iv) make a general
assignment for the benefit of creditors, or (v) take any corporate action to
authorize any of the foregoing; or

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          (e) an involuntary case or other proceeding shall be commenced against
the Borrower or the Mexican Trust seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy (concurso
mercantil), insolvency or other similar law now or hereafter in effect, or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 90 days; or
          (f) the Borrower shall (i) fail to comply with the provisions of
Section 7.8; or (ii) fail to maintain any and all insurance policies required in
Section 7.5 and, in either case, such failure shall continue unremedied for
20 days; or
          (g) the Concession Title shall cease to grant the Borrower the rights
originally provided therein or the Concession Title shall be revoked or
terminated; or
          (h) the Borrower shall fail to provide the Lender with evidence of the
completion of the registration of the Mexican Trust Agreement with the Mexican
Railroad Registry as required by Section 7.13(b)(ii) by June 30, 2009; or
          (i) at any time after the execution and delivery thereof, the Mexican
Trust Agreement shall be terminated by the Borrower; provided, however, any
termination of the Mexican Trust Agreement in accordance with its terms shall
not constitute an Event of Default hereunder.
     Section 8.2. Rights and Remedies Upon Default. Upon the occurrence and
during the continuance of any Event of Default, Lender shall have the right to
exercise all of the remedies conferred hereunder, under the Notes and any other
document executed in connection herewith, and Lender shall have all the rights
and remedies of a secured party, and Lender may proceed to protect and enforce
its rights by an action at law, suit in equity, or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Notes, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise. Without limitation, the Lender shall have the following rights
and powers:
          (a) (i) If an Event of Default described in Section 8.1(d) or
Section 8.1(e) above has occurred, the entire unpaid principal amount and all
accrued and unpaid interest under the Notes (at par plus any Positive Make-Whole
Amount, if any, applicable thereto) shall automatically become immediately due
and payable and (ii) if any other Event of Default has occurred the Lender shall
have the right to declare the entire unpaid principal and all accrued and unpaid
interest under the Notes (at par plus any Positive Make-Whole Amount, if any,
applicable thereto) immediately due and payable and upon such declaration, such
principal and interest shall become immediately due and payable without
presentment, demand, protest or further notice, all of which are hereby waived.
Promptly upon payment of the foregoing amounts to the Lender, the Lender shall
pay to the Borrower in immediately available funds the Negative Make-Whole
Amount, if any, with respect to the Notes.

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          (b) Notwithstanding anything to the contrary contained in this
Section 8.2, after the occurrence and during the continuance of an Event of
Default all remedies with respect to Units shall be exercised pursuant to the
terms and conditions of the Mexican Trust Agreement.
     Section 8.3. Waiver of Default. If at any time after the principal of all
the Notes shall have been declared and have become due and payable, or if at any
time after the entire amount of Notes shall have been declared due and payable,
all as provided in Section 8.2 hereof, all expenses of the Lender occasioned by
the Borrower’s default, and all other sums which shall have become due and
payable by the Borrower hereunder shall be paid by the Borrower before any sale
or lease by the Trustee of any of the Units and every other default in the
observance or performance of any covenant or condition hereof shall be made good
or secured to the satisfaction of the Lender, or provision deemed by the Lender
to be adequate shall be made therefor, then, and in every such case, the Lender
shall, by written notice to the Borrower, waive the default by reason of which
there shall have been such declaration or declarations and the consequences of
such default, but no such waiver shall extend to or affect any subsequent
default or impair any right consequent thereon.
     Section 8.4. Obligations of Borrower Not Affected by Remedies. No retaking
of possession of the Equipment by the Trustee, nor any withdrawal, lease or sale
thereof, nor any action or failure or omission to act against the Borrower or in
respect of the Units, on the part of the Lender or on the part of the holder of
any Note, nor any delay or indulgence granted to the Borrower by the Lender or
by any such holder, shall affect the obligations of the Borrower hereunder. The
Borrower hereby waives presentation and demand in respect of any of the Notes
and waives notice of presentation, of demand and notice of any default in the
payment of the principal of and interest on the Notes.
     Section 8.5. Borrower to Deliver Equipment to Trustee. In case the Lender
shall demand the Trustee to take possession of the Equipment pursuant to the
provisions of the Mexican Trust Agreement, the Borrower shall forthwith deliver
possession of the Equipment to the Trustee. For the purpose of delivering
possession of any Unit of Equipment to the Trustee, the Borrower shall at its
own cost, expense and risk:
          (a) forthwith place such Equipment upon such storage tracks of the
Borrower or, at the expense of the Borrower, on any other storage tracks, as the
Borrower may select;
          (b) permit the Trustee to store such Equipment on such tracks without
charge for insurance, rent or storage until the earlier of (x) three months
after such demand for storage and (y) the date such Equipment is sold, leased or
otherwise disposed of by the Trustee and during such period of storage the
Borrower shall continue to maintain all insurance required by Section 7.5
hereof; and
          (c) transport the Equipment to the Borrower’s nearest point of
interchange with a railroad in the 48 contiguous United States, when directed by
the Lender.

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It is hereby expressly covenanted and agreed that the performance of this
covenant is of the essence of this Agreement and that, upon application to any
court having jurisdiction in the premises, the Lender shall be entitled to a
decree against the Borrower requiring the specific performance thereof.
     Section 8.6. Lender May Perform. If Borrower fails to perform any agreement
contained herein, the Lender may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Lender, including reasonable
attorney’s fees and expenses, incurred in connection therewith shall be payable
by the Borrower.
     Section 8.7. Applications of Proceeds Received From Disposition of the
Equipment. All proceeds received by the Lender in respect of any sale of,
collection from, or other realization upon all or any part of the Equipment
following an Event of Default shall be applied in the following order of
priority:
     (a) First, to the payment of all costs and expenses of such sale,
collection or realization, including reasonable compensation to the Lender and
its agents and counsel, and all other expenses, liabilities and advances made or
incurred by the Lender in connection therewith, and all reasonable amounts for
which the Lender is entitled to indemnification under the Notes and to the
payment of all reasonable costs and expenses paid or incurred by the Lender in
connection with the exercise of any right or remedy under this Agreement, all in
accordance with this Agreement;
     (b) Next, to satisfaction of the Borrower’s obligations under this
Agreement, and the Notes; and
     (c) Thereafter, to the extent of any excess proceeds, to the payment to or
upon the order of the Borrower or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
If, upon the sale, license or other disposition of the Equipment, the proceeds
thereof are insufficient to pay all amounts to which the Lender is legally
entitled, the Borrower will be liable for the deficiency, together with interest
thereon, at the Late Rate, and the reasonable fees of any attorneys employed by
the Lender to collect such deficiency. To the extent permitted by applicable
law, the Borrower waives all claims, damages and demands against the Lender
arising out of the sale of the Equipment.
Article IX
Miscellaneous
     Section 9.1. Security; Termination. (a) The Mexican Trust Agreement shall
(i) remain in full force and effect until the payment in full of the Borrower’s
obligations under the Notes and hereunder, (ii) be binding upon the Borrower,
its successors and assigns, and (iii) inure, together with the rights and
remedies of the Lender hereunder and thereunder, to the benefit of the Lender
and its permitted successors, transferees and assigns.

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          (b) Immediately upon the payment in full of the Borrower’s obligations
under the Notes, this Agreement and the Mexican Trust Agreement shall terminate
and all rights to the Equipment shall revert to the Borrower. Upon any such
termination, the Lender shall execute and deliver, and instruct the Trustee to
execute and deliver, to, or as directed in writing by, the Borrower an
appropriate instrument (in due form for recording) furnished by the Borrower
conveying and/or releasing the Equipment from the Mexican Trust Agreement within
five (5) days of the Lender’s receipt of a written request therefor from the
Borrower.
     Section 9.2. Notices. (a) Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein shall be
in writing or by a telecommunications device capable of creating a written
record (including electronic mail), and any such notice shall become effective
(a) upon personal delivery thereof, including, without limitation, by overnight
mail and courier service, (b) in the case of notice by United States mail,
certified or registered, postage prepaid, return receipt requested, upon receipt
thereof, or (c) in the case of notice by such a telecommunications device, upon
transmission thereof, provided such transmission is promptly confirmed in
writing by either of the methods set forth in clauses (a) and (b) above, in each
case addressed to the following Person at its respective address set forth below
or at such other address as such Person may from time to time designate by
written notice to the other Persons listed below:
     (i) to the Borrower, at Kansas City Southern de México, S.A. de C.V.,
Montes Urales #625, Col. Lomas de Chapultepec C.P., 11000 Mexico, DF, Attention:
Director Jurídico Ejecutivo, Facsimile No.: 011 5255 9178 5604, Telephone No.:
011 5255 9178 5647, with a copy to (i) in the case of mail delivery, Kansas City
Southern, P.O. Box 219335, Kansas City, MO 64121-9335, Attention: Senior Vice
President – Finance & Treasurer, Facsimile No.: (816) 983-1198, Telephone No.:
(816) 983-1802 and (ii) in the case of courier and similar delivery, Kansas City
Southern, 427 West 12th Street, Kansas City, MO 64105, Attention: Senior Vice
President – Finance & Treasurer, Facsimile No.: (816) 983-1198, Telephone No.:
(816) 983-1802, and Kansas City Southern, 427 West 12th Street, Kansas City, MO
64105, Attention: Senior Vice President & General Counsel, Facsimile No.: (816)
983-1227, Telephone No.: (816) 983-1303;
     (ii) if to Lender at DVB Bank AG, Attention: Loan Administration
Department, Platz der Republik 6, D-60325 Frankfurt am Main, Germany, Fax No.:
011 49 69 9750 4526, with a copy to: DVB Transport (US) LLC, Attention: Land
Transport Division, 609 Fifth Avenue, New York, NY 10017, Fax No.: 212-588-8936;
and
     (iii) if to the agent designated pursuant to Section 9,12, at CT
Corporation System, 111 Eighth Avenue, New York, New York 10011.
     Section 9.3. Entire Agreement; Severability. (a) This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and is intended to supersede all prior negotiations, understandings and
agreements with respect thereto. No provision of this Agreement may be modified
or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

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          (b) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
     Section 9.4. Amendments. No amendment, modification, termination or waiver
of any provision of this Agreement, and no consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Lender and, in the case of any such amendment or
modification, by the Borrower. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.
     Section 9.5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
     Section 9.6. Governing Law. This Agreement and any extensions, amendments,
modifications, renewals or supplements hereto and the Notes shall be governed by
and construed in accordance with the internal laws and decisions (as opposed to
conflicts of law provisions) of the State of New York; provided, however, that
the parties shall be entitled to all rights conferred by any applicable Federal
statute, rule or regulation. The Mexican Trust Agreement shall be governed by
and construed in accordance with the laws of Mexico.
     Section 9.7. Waiver of Jury Trial. Each party hereto knowingly,
irrevocably, voluntarily and intentionally waives any right it may have to a
trial by jury in respect of any action, proceeding or counterclaim based on or
arising out of, under or in connection with any of the transaction documents, or
any course of conduct, course of dealing, statement (whether verbal or written)
or actions of any party thereto.
     Section 9.8. Powers and Rights Not Waived; Remedies Cumulative. No delay or
failure on the part of the holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the holder
of any Note are cumulative to, and are not exclusive of, any rights or remedies
any such holder would otherwise have.
     Section 9.9. Exempted Transaction. The Borrower agrees that (i) the Notes
constitute an extension of credit to a business entity for an amount greater
than two hundred fifty thousand dollars ($250,000.00) for purposes of New York
General Obligations Law § 5-501(6)(a), (ii) the

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payment obligations evidenced by this Agreement and the Notes are exempted
transactions under the Truth in Lending Act, 15 U.S.C. § 1601, et seq.,
(iii) the proceeds of the indebtedness evidenced by the Notes will not be used
for the purchase of registered equity securities within the purview of
Regulation “U” issued by the Board of Governors of the Federal Reserve System
and (iv) on the maturity date of any Note, the Lender shall not have any
obligation to refinance the indebtedness evidenced by such Note or to extend
further credit to the Borrower.
     Section 9.10. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by the
parties hereto on the Closing Date (except the Notes), and (c) financial
statements, certificates and other information previously or hereafter furnished
pursuant hereto, may be reproduced by the parties hereto by any photographic,
photostatic, microfilm, microcard, miniature photographic, electronic or other
similar process and the parties hereto may destroy any original document so
reproduced. The parties agree to accept delivery of all of the foregoing
documents in electronic format in lieu of original closing transcripts. The
parties further agree and stipulate that, to the extent permitted by applicable
law, any such reproduction, in electronic format or otherwise, shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence. This Section 9.10 shall not prohibit the parties hereto
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.
     Section 9.11. Tax Disclosure. Notwithstanding anything herein to the
contrary, each party hereto (and each employee, representative or other agent of
such person) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions described in this
Agreement, and all materials of any kind (including opinions or other tax
analyses) that are provided to the person related to such tax treatment and tax
structure. The preceding sentence is intended to cause the transaction
contemplated hereby to be treated as not having been offered under conditions of
confidentiality for purposes of U.S. Treasury Regulation §1.6011-4(b)(3) and
shall be construed in a manner consistent with such purpose.
     Section 9.12. Jurisdiction, Court Proceedings. Any suit, action or
proceeding against any party to this Agreement arising out of or relating to
this Agreement, the Notes or any transaction contemplated hereby may be brought
in any Federal or state court located in New York, New York, and each such party
hereby submits to the exclusive jurisdiction of such courts for the purpose of
any such suit, action or proceeding. Any suit, action or proceeding against any
party to this Agreement arising out of or relating to the Mexican Trust
Agreement shall be brought in Mexico, and each such party hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action
or proceeding. Each of the parties to this Agreement (that is a resident of the
United States of America), in the event that service of process by mail is
permitted by applicable law, each such party irrevocably consents to the service
of process in any such suit, action or proceeding in such courts by the mailing
of such process by registered or certified mail, postage prepaid, at its address
for notices provided for in Section 9.2. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner

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permitted by law. Each such party irrevocably agrees not to assert any objection
which it may ever have to the laying of venue of any such suit, action or
proceeding in any Federal or state court located in New York, New York,
including without limitation, objections regarding jurisdiction to which they
may be entitled by reason of their current or future domiciles; and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
          Each of the parties to this Agreement (that are not residents of the
United States of America), hereby irrevocably designate, appoint and empower CT
Corporation System as its lawful agent to receive for and on its behalf service
of process in the State of New York in any action or proceeding described in
this Section 9.12 and irrevocably consents to the service of process outside the
territorial jurisdiction of said courts in any such action or proceeding. Any
service made on such agent or its successor shall be effective when delivered
regardless of whether notice thereof is given to affected party. If any person
or firm designated as agent hereunder shall no longer serve as agent of such
party to receive service of process in the State of New York, the party so
affected shall be obligated promptly to appoint a successor to so serve; and,
unless and until such successor is appointed and the parties hereto notified of
the same in writing, service upon the last designated agent shall be good and
effective. The parties to this Agreement agree that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
     Section 9.13. Judgment Currency. This is an international transaction in
accordance with which the specification of Dollars is of the essence, and
Dollars shall be the currency of account in the case of all obligations under
this Agreement and the Notes. The payment obligations of the parties under this
Agreement and the Notes shall not be discharged by an amount paid in a currency
or in a place other than that specified with respect to such obligations,
whether pursuant to a judgment or otherwise, to the extent that the amount so
paid on prompt conversion to Dollars and transfer to the specified place of
payment under normal banking procedures does not yield the amount of Dollars, in
such place, due under this Agreement and the Notes, as the case may be. In the
event that any payment, whether pursuant to a judgment or otherwise, upon
conversion and transfer does not result in payment of such amount of Dollars in
the specified place of payment, the obligee of such payment shall have a
separate cause of action against the party making the same for the additional
amount necessary to yield the amount due and owing under this Agreement and the
Notes. If, for the purpose of obtaining a judgment in any court with respect to
any obligation of a party under any of this Agreement or any Note or any of the
agreements contemplated thereby, it shall be necessary to convert to any other
currency any amount in Dollars due thereunder and a change shall occur between
the rate of exchange applied in making such conversion and the rate of exchange
prevailing on the date of payment of such judgment, the respective judgment
debtor agrees to pay such additional amounts (if any) as may be necessary to
insure that the amount paid on the date of payment is the amount in such other
currency which, when converted into Dollars and transferred to New York,
New York, in accordance with normal banking procedures, will result in the
amount then due under this Agreement or any Note, as the case may be, in
Dollars. Any amount due from the respective judgment debtor shall be due as a
separate debt and shall not be affected by or merged into any judgment being
obtained for any other sum due under or in respect of this Agreement or any

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Note. In no event, however, shall the respective judgment debtor be required to
pay a larger amount in such other currency at the rate of exchange in effect on
the date of payment than the amount of Dollars stated to be due under this
Agreement or any Note, as the case may be, so that in any event the obligations
of the respective judgment debtor under this Agreement or such Note, as the case
may be, will be effectively maintained as Dollar obligations.
     Section 9.14. Business Days. If any payment is to be made hereunder or any
action is to be taken hereunder on any date that is not a Business Day, such
payment or action otherwise required to be made or taken on such date shall be
made or taken on the immediately succeeding Business Day with the same force and
effect as if made or taken on such scheduled date and as to any payment
(provided any such payment is made on such succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to
the time of such payment on such next succeeding Business Day.
     Section 9.15. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
     Section 9.16. Participations. (a) The Lender shall not sell a participation
to any Person (each, a “Participant”) in all or a portion of the Lender’s rights
and/or obligations under this Agreement (including all or a portion of the Loan
owing to it) without the prior written consent of the Borrower (which consent
shall not be unreasonably withheld) unless an Event of Default described in
Section 8.1(a) hereof shall have occurred and be continuing, in which case, such
consent shall not be required; provided that (i) the Lender’s obligations under
this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the Borrower for the performance of such obligations and
(iii) the Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender’s rights and obligations under this Agreement. The
Lender shall provide the Borrower with at least thirty (30) days prior written
notice of any proposed participation specifying the name and address of any
proposed Participant and the proposed date of such participation (the
“Participation Date”).
          Any agreement or instrument pursuant to which the Lender sells such a
participation shall provide that the Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that the Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification that affects such Participant.
Subject to clause (b) below, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 7.10 and 7.11 to the same extent as if it
were the Lender and had acquired its interest by assignment pursuant to
Section 7.4(c).
          (b) A Participant shall not be entitled to receive any greater payment
under Section 7.10 or Section 7.11 than the Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.
          (c) Notwithstanding anything to the contrary contained hereunder, if a
holder of a Note seeking to sell a participation to any Person in all or a
portion of its rights and/or obligations

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under this Agreement (including all or a portion of the Loan owing to it) in
accordance with this Section 9.16 (a “Transferor”) shall have executed and
delivered to the Borrower a Tax Prepayment Rejection Notice and/or an Increased
Cost Rejection Notice, as applicable, with respect to such Note, the Borrower
may, by written notice delivered to the Transferor not later than fifteen (15)
days prior to the proposed Participation Date, require the proposed Participant
to execute and deliver to the Borrower a Tax Prepayment Rejection Notice with
respect to the Change in Tax Law giving rise to the original Tax Prepayment
Notice and the Transferor’s Tax Prepayment Rejection Notice and/or an Increased
Cost Rejection Notice with respect to the Regulatory Change giving rise to the
original Increased Cost Prepayment Notice and the Transferor’s Increased Cost
Rejection Notice, as applicable. If the proposed Participant shall fail to
execute and deliver a Tax Prepayment Rejection Notice and/or an Increased Cost
Rejection Notice, as applicable, to the Borrower at least five (5) days prior to
the proposed Participation Date, the Borrower may give the Transferor
irrevocable written notice of the prepayment of the Transferor’s Note on a
specified prepayment date (which shall be a Business Day not less than 30 days
nor more than 60 days after the date of such notice) stating that all of the
Notes held by the Transferor shall be prepaid on the date of such prepayment at
100% of the principal amount so prepaid together with interest accrued thereon
up to, but not including the date of such prepayment and Make-Whole Amount, if
any, with respect thereto. If any prepayment under this Section 9.16(c) shall
result in a Negative Make-Whole Amount, the holders of the Notes so to be
prepaid shall pay such Negative Make-Whole Amount in accordance with the
provisions of Section 7.15 of this Agreement.
     Section 9.17. Security Agreement. This Agreement shall constitute a
security agreement as defined in the NY UCC, and the Borrower hereby grants to
Lender a security interest within the meaning of the NY UCC in favor of the
Lender in the Equipment, the proceeds thereof and other rights described herein.

-36-

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     In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

            Kansas City Southern de México, S.A. de
     C.V., a company incorporated under the laws
     of Mexico
      By:   /s/ Paul J. Weyandt         Name:   Paul J. Weyandt        Title:  
Attorney-in-Fact and Treasurer        DVB Bank AG, a German corporation
      By:   /s/ M. Lieschied         Name:   M. Lieschied        Title:   Vice
President            By:   /s/ Volker Eberhart         Name:   Volker Eberhart 
      Title:   Vice President   

-37-

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Definitions
General Provisions
     The following terms shall have the following meanings for all purposes of
the Loan Agreement referred to below, unless otherwise defined in the Loan
Agreement or the context thereof shall otherwise require and such meanings shall
be equally applicable to both the singular and the plural forms of the terms
herein defined. In the case of any conflict between the provisions of this
Appendix A and the provisions of the main body of the Loan Agreement, the
provisions of the main body of the Loan Agreement shall control the construction
of the Loan Agreement.
     Unless the context otherwise requires, (i) references to agreements shall
be deemed to mean and include such agreements as the same may be amended,
supplemented and otherwise modified from time to time, and (ii) references to
parties to agreements shall be deemed to include the permitted successors and
assigns of such parties.
Defined Terms
     “AAR Mechanical Standards” shall mean the rules, standards and supplements
thereto of the Mechanical Division of the Association of American Railroads, as
the same may be in effect from time to time.
     “Affiliate” of any Person shall mean any other Person which directly or
indirectly controls, or is controlled by, or is under a common control with,
such Person. The term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” shall have meanings
correlative to the foregoing.
     “After-Tax Basis” means with respect to any payment to be received by a
Person, the amount of such payment plus a further payment or payments so that
the net amount received by such Person, after deducting from such payment and
such further payment the amount of all Taxes actually imposed on the Person
receiving such payments by any U.S. federal, state or local or foreign taxing
authority with respect to such payments (net of any current credits, deductions
or other Tax benefits actually arising from the payment by such Person of any
amount, including Taxes, with respect to the payment received or arising by
reason of the receipt or accrual by such Person of the payment received) is
equal to the original payment required to be received.
     “Aggregate Commitment Amount” means $52,200,000.
     “Assignee” shall have the meaning set forth in Section 7.4(c) of the Loan
Agreement.
     “Assignor” shall have the meaning set forth in Section 7.4(c) of the Loan
Agreement.
     “Borrower” shall have the meaning specified in the Recitals to the Loan
Agreement.
Appendix A
(to Loan Agreement)

 

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     “Business Day” means any day other than a Saturday or Sunday or other day
on which banks in Mexico City, Mexico, Frankfurt, Germany or New York, New York,
are authorized or obligated to be closed.
     “Casualty Occurrence” shall mean, with respect to any Unit, the occurrence
of any of the following: (i) the destruction, damage, contamination, wear or
unsuitability of such Unit which, in the Borrower’s good faith opinion, makes
repair uneconomic or renders such Unit unfit for commercial use, (ii) theft or
disappearance of such Unit, (iii) the permanent return of such Unit to the
manufacturer pursuant to any warranty or patent indemnity provisions, (iv) the
taking of title of such Unit or appropriation of such Unit by any governmental
authority under the power of eminent domain or otherwise or (v) the taking or
requisition for use of such Unit by any governmental authority under the power
of eminent domain or otherwise for a continuous period in excess of 180 days.
     “Change in Tax Law” shall have the meaning set forth in Section 4.8(c) of
the Loan Agreement.
     “Claims” shall have the meaning set forth in Section 7.6 of the Loan
Agreement.
     “Closing Date” shall have the meaning set forth in Section 2.1(a) of the
Loan Agreement.
     “Concession Title” shall mean the Borrower’s right, for a period of
50 years, to be the exclusive provider (subject to certain trackage rights) of
freight transportation services over the northeast rail lines of the Mexican
railroad system and for an additional 50 years to be a non-exclusive provider of
such services over such rail lines, granted by the Mexican government pursuant
to the Concession Title, subject in all cases to the terms and conditions of the
Concession Title, as in effect on June 23, 1997 and as amended on February 12,
2001 and November 22, 2006.
     “Debt Rate” shall mean 6.1950% per annum, calculated on the basis of a
360-day year and the actual number of days elapsed.
     “Default” shall mean an event that with the passage of time or the giving
of notice, or both, would become an Event of Default.
     “Dollars”, “U.S. Dollars” and “$” shall mean lawful currency of the United
States.
     “Equipment” shall mean collectively those locomotives described in the Loan
Agreement Supplements and in any supplement thereto as applicable, together with
any and all accessions, additions, improvements and replacements from time to
time incorporated or installed in any item thereof and “Unit” shall mean
individually the various items thereof.
     “Equipment Cost” shall mean, for each Unit, the cost thereof as set forth
in Schedule 1 to the Loan Agreement Supplement for such Unit.

A-2

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     “Event of Default” shall mean any event specified in Section 8.1 of the
Loan Agreement to be an Event of Default.
     “Financing Percentage,” shall mean the percentage specified in the Loan
Request delivered pursuant to Section 3.2 of the Loan Agreement relating to the
Loan, which is the percentage of the Equipment Cost intended to be financed
through the Loan, and which shall not exceed 80%.
     “Forms” shall have the meaning set forth in Section 7.11 of the Loan
Agreement.
     “Governmental Authority” shall mean any branch of power (whether
administrative, legislative or judicial) of any state, any nation or government,
any state or other political or administrative subdivision thereof, any central
bank (or similar monetary or regulatory authority) and any entity exercising
executive, legislative, judicial, regulatory or administrative authority of or
pertaining to government.
     The word “holder” shall mean the registered owner of a Note.
     “Increased Cost Prepayment Notice” shall have the meaning set forth in
Section 7.10(d) of the Loan Agreement.
     “Increased Cost Prepayment Rejection Notice” shall have the meaning set
forth in Section 7.10(d) of the Loan Agreement.
     “Indemnified Person” shall have the meaning set forth in Section 7.6 of the
Loan Agreement.
     “Late Rate” shall mean the lesser of 2% over the Debt Rate and the maximum
interest rate from time to time permitted by law.
     “Lender” shall have the meaning specified in the introductory paragraph to
the Loan Agreement.
     “Lender’s Lien” shall mean any Lien against the Equipment or any part
thereof that results from any act of, or any failure to act by, or as a result
of any claim against, the Lender arising out of any event or condition unrelated
to the transactions contemplated by the Agreement, excluding any tax, assessment
or charge for which the Borrower is obligated to indemnify the Lender
thereunder.
     “Lien” shall mean any mortgage, pledge, security interest, lien,
encumbrance, lease, exercise of rights, claim, disposition of title or other
charge of any kind on property.
     “Loan” shall have the meaning set forth in Section 3.1(a) of the Loan
Agreement.
     “Loan Agreement” or “Agreement” shall mean the Loan Agreement dated as of
September 24, 2008 by and between the Borrower and the Lender, as amended,
supplemented or

A-3

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otherwise modified from time to time. The term “Loan Agreement” or “Agreement”
shall include each Loan Agreement Supplement entered into pursuant to the terms
of the Loan Agreement.
     “Loan Agreement Supplement” shall mean a Loan Agreement Supplement dated
the Closing Date or the date that any Replacement Unit is subjected to the Loan
Agreement, as applicable, substantially in the form of Exhibit E to the Loan
Agreement, between the Borrower and the Lender, covering the Units described
therein.
     “Loan Request” shall have the meaning set forth in Section 3.2 of the Loan
Agreement.
     “Make-Whole Amount” shall mean, with respect to the principal amount of a
Note to be prepaid on any prepayment date, an amount equal to the amount which
the holder of such Note would receive (such amount to be expressed as negative
amount) or pay (such amount to be expressed as a positive amount) in accordance
with market practice as a result of terminating all, or the application portion
of, a LIBOR to fixed rate (such fixed rate to equal the Debt Rate minus 185
basis points) U. S. Dollar denominated interest rate swap entered into on the
Closing Date governed by an ISDA master agreement with an amortizing notional
amount equal to the scheduled principal amount outstanding of such Note, the
fixed and floating rates payable on the same dates as interest is scheduled to
be paid on the Note. Make-Whole Amount shall be determined by the holder of such
Note and shall be certified to the Borrower in an Officer’s Certificate of such
holder, which Officer’s Certificate shall be binding and conclusive absent
manifest error. The Officer’s Certificate of the applicable holder referenced in
the immediately preceding sentence shall describe in reasonable detail the basis
of determination of the Make-Whole Amount as of the specified prepayment date.
For the purposes of the definition of “Make-Whole Amount”, references to
“prepayment”, “date of prepayment” and similar references shall also be deemed
to refer to acceleration of the Notes pursuant to Section 8.2 of the Loan
Agreement.
     “Material Adverse Effect” means a material adverse effect on the
(a) financial condition or operations of the Borrower and its Subsidiaries,
taken as a whole or (b) Borrower’s ability to perform its obligations under the
Loan Agreement or (c) the validity or enforceability of the Loan Agreement, the
Mexican Trust Agreement or the Notes.
     “Mexican Trust” shall mean the trust established pursuant to the Mexican
Trust Agreement.
     “Mexican Trust Agreement” means the Irrevocable Guaranty Trust Agreement,
dated as of September 24, 2008, by and among the Borrower, as Settlor and as
Second Beneficiary, the Lender, as First Beneficiary and the Trustee.
     “Mexico” shall mean the Estados Unidos Mexicanos (United Mexican States).
     “Negative Make-Whole Amount” shall mean an amount equal to the absolute
value of the Make-Whole Amount to the extent such Make-Whole Amount is a
negative number.

A-4

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     “Note Register” shall have the meaning set forth in Section 4.5 of the Loan
Agreement.
     “Notes” shall mean the promissory notes, each to be substantially in the
form therefor set forth in Exhibit A of the Loan Agreement issued by the
Borrower pursuant to the terms of the Loan Agreement, and shall include any
notes issued in exchange therefor or replacement thereof pursuant to Section 4.5
or Section 4.6 of the Loan Agreement.
     “Officer’s Certificate” shall mean a certificate signed by either the
Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer,
the Chief Accounting Officer, the President, any Vice President, the Treasurer,
any Assistant Treasurer or any Attorney-in-Fact authorized to execute and
deliver any such certificate.
     “Opinion of Counsel” shall mean an opinion in writing signed by legal
counsel who may be (1) an employee of or counsel to the Borrower or (2) other
counsel reasonably acceptable to the Lender.
     “Participant” shall have the meaning specified in Section 9.16 of the Loan
Agreement.
     “Participation Date” shall have the meaning specified in Section 9.16 of
the Loan Agreement.
     “Payment Date” shall mean each date on which payments of principal or
interest on the Notes are scheduled to be made pursuant to the terms thereof.
     “Permitted Jurisdiction” shall mean any of the jurisdictions set forth on
the then-current version of the Secretaría de Hacienda y Crédito Público
registry listing those countries having a treaty to avoid double taxation with
Mexico. A copy of the Secretaría de Hacienda y Crédito Público registry in
effect as of the Closing Date is attached as Exhibit F to the Loan Agreement.
     “Permitted Liens” with respect to the Equipment and each Unit thereof,
shall mean: (i) the interest of the Borrower and any lessee as provided in any
lease permitted pursuant to Section 7.4(b) of the Loan Agreement; (ii) any Liens
thereon for taxes, assessments, levies, fees and other governmental and similar
charges not due and payable or the amount or validity of which is being
contested in good faith by appropriate proceedings so long as there exists no
material risk of sale, forfeiture, loss, or loss of use of any Unit or any
interest therein or any risk of criminal liability or risk of material civil
liability on the Lender; (iii) any Liens of mechanics, suppliers, materialmen,
laborers, employees, repairmen and other like Liens arising in the ordinary
course of the Borrower’s (or if a lease is then in effect, any lessee’s)
business securing obligations which are not due and payable or the amount or
validity of which is being contested so long as there exists no material risk of
sale, forfeiture, loss, or loss of use of any Unit or any risk of criminal
liability or risk of material civil liability on the Lender; (iv) the Lien and
security interest granted to the Trustee under and pursuant to the Mexican Trust
Agreement; (v) Liens arising out of any judgment or award against the Borrower
(or any lessee permitted pursuant to Section 7.4(b) of the Loan Agreement) with
respect to which an appeal or proceeding for review is being presented in good
faith and with respect to which there shall have been secured a stay of

A-5

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execution pending such appeal or proceeding for review; or (vi) salvage rights
of insurers under insurance policies maintained pursuant to Section 7.5 of the
Loan Agreement.
     “Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
     “Positive Make-Whole Amount” shall mean an amount equal to the Make-Whole
Amount to the extent such Make-Whole Amount is a positive number.
     “Prepayment Fee” shall mean, with respect to the prepayment of any Note
pursuant to Section 4.8(b) of the Loan Agreement (i) at any time prior to the
first anniversary of the Closing Date, an amount equal to 0.75% of the principal
amount of such Note being prepaid, (ii) at any time after the first anniversary
of the Closing Date, but prior to the second anniversary of the Closing Date, an
amount equal to 0.50% of the principal amount of such Note being prepaid,
(iii) at any time after the second anniversary of the Closing Date, but prior to
the third anniversary of the Closing Date, an amount equal to 0.25% of the
principal amount of such Note being prepaid and (iv) at any time on or after the
third anniversary of the Closing Date, an amount equal to 0% of the principal
amount of such Note being prepaid.
     “Regulatory Change” shall have the meaning specified in Section 7.10(b) of
the Loan Agreement.
     “Rejection Notice” shall have the meaning set forth in Section 4.8(c) of
the Loan Agreement.
     “Related Indemnitee Group” shall have the meaning set forth in Section 7.6
of the Loan Agreement.
     “Replacement Unit” shall have the meaning set forth in Section 7.3(b) of
the Loan Agreement.
     “Request” shall mean a written request for the action therein specified,
delivered to the Lender and signed on behalf of the Borrower by the Chairman of
the Board, the Chief Executive Officer, the Chief Financial Officer, the Chief
Accounting Officer, the President, any Vice President, the Treasurer, any
Assistant Treasurer or any Attorney-in-Fact authorized to execute and deliver
any such request.
     “Requested Loan Amount” shall mean the amount of the Loan as requested by
the Borrower pursuant to the Loan Request.
     “Responsible Officer” shall mean shall mean, with respect to the subject
matter of any covenant, agreement or obligation of any party contained in the
Loan Agreement, Chairman of the Board, the Chief Executive Officer, the Chief
Financial Officer, the Chief Accounting Officer, the President, any Vice
President, Assistant Vice President, Treasurer or Assistant Treasurer.

A-6

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     “SEC” shall mean the Securities and Exchange Commission.
     “Secured Party” shall mean the Lender.
     “Subsidiary” of any Person shall mean any corporation, association, or
other business entity of which more than 50% (by number of votes) of the voting
stock or other ownership interest at the time outstanding shall at the time be
owned, directly or indirectly, by such Person or by any other corporation,
association or trust which is itself a Subsidiary within the meaning of this
definition, or collectively by such Person and any one or more such
Subsidiaries.
     “Surface Transportation Board” or “STB” means the Surface Transportation
Board of the United States Department of Transportation and any agency or
instrumentality of the United States Government succeeding to its functions.
     “Tax Prepayment Notice” shall have the meaning set forth in Section 4.8(c)
of the Loan Agreement.
     “Tax Prepayment Rejection Notice” shall have the meaning set forth in
Section 4.8(c) of the Loan Agreement.
     “Taxes” means all fees, taxes, levies, assessments, charges or withholdings
of any nature imposed by any Governmental Authority, together with any
penalties, fines or interest thereon or additions thereto.
     “Taxing Jurisdiction” shall have the meaning set forth in Section 7.11 of
the Loan Agreement.
     “Transfer Date” shall have the meaning set forth in Section 7.4(c) of the
Loan Agreement.
     “Transferor” shall have the meaning set forth in Section 9.16(c) of the
Loan Agreement.
     “Trustee” shall mean Banco Nacional de México, S.A., integrante del Grupo
Financiero Banamex, a Mexican Banking Institution, in its capacity as trustee
under the Mexican Trust Agreement.
     “Unit” shall have the meaning set forth in the definition of “Equipment.”

A-7

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PROMISSORY NOTE

      No.                                        

  New York, New York
U.S.$                                                                ___, 20___

     FOR VALUE RECEIVED, Kansas City Southern de México, S.A. de C.V., a
variable stock corporation (sociedad anónima de capital variable) organized and
existing under the laws of the United Mexican States (the “Obligor”), by this
Promissory Note hereby unconditionally promises to pay to the order of DVB BANK
AG (the “Holder”) the principal sum of
U.S.$                                        
(                                         DOLLARS 00/100, CURRENCY OF THE UNITED
STATES OF AMERICA), in installments payable on the dates set forth under the
column entitled “To (Payment Date)” in Annex A hereto commencing
                                           ___, ___ and thereafter to and
including                                            ___, ___, each such
installment to be in an amount equal to the corresponding percentage (if any) of
the remaining principal amount hereof set forth under the column entitled
“Percentage of Remaining Principal Balance Payable” in Annex A hereto, together
with interest thereon on the amount of such principal amount remaining unpaid
from time to time from and including the date hereof until such principal amount
shall be due and payable, payable on                                         
___, ___ and on the last day of each March, June, September and December
thereafter to the maturity date hereof at the rate of 6.1950% per annum
(computed on the basis of a 360-day year and the actual number of days elapsed).
Interest on any overdue principal, interest or Positive-Make Whole Amount, if
any, hereof shall be paid from the due date thereof at the Late Rate (computed
on the basis of a 360-day year and the actual number of days elapsed), payable
on demand.
     This Promissory Note is one of the Notes issued pursuant to the Loan
Agreement, dated as of September 24, 2008 (as from time to time amended,
supplemented or modified, the “Loan Agreement”), between the Obligor and DVB
Bank AG and is entitled to the benefits thereof. Unless otherwise indicated,
capitalized terms used in this Promissory Note shall have the respective
meanings ascribed to such terms in the Loan Agreement.
     Payments with respect to the principal amount hereof, Positive Make-Whole
Amount, if any, and interest hereon shall be payable in U.S. Dollars in
immediately available funds in accordance with Section 4.2 of the Loan
Agreement. Each such payment shall be made on the date such payment is due and,
except for the last payment of principal hereof, without any presentment or
surrender of this Promissory Note. Whenever the date scheduled for any payment
to be made hereunder or under the Loan Agreement shall not be a Business Day,
then such payment need not be made on such scheduled date but may be made on the
next succeeding Business Day with the same force and effect as if made on such
scheduled date and (provided such payment is made on such next succeeding
Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date to the time of such payment on such next succeeding
Business Day.
     Payments hereunder shall be reduced by any taxes, fees or charges required
by applicable law to be withheld at the source, and any such withholdings shall
be deemed to have been made for the benefit of the holder hereof.
Exhibit A
(to Loan Agreement)

 

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     Each holder hereof, by its acceptance of this Promissory Note, agrees that
each payment received by it hereunder shall be applied, first, to the payment of
accrued but unpaid interest on this Promissory Note then due, second, to the
payment of the unpaid principal amount of this Promissory Note then due, and,
third, to the payment of any Positive Make-Whole Amount then due.
     This Promissory Note is subject to prepayment, in whole or from in part, at
the times and on the terms specified in the Loan Agreement, but not otherwise.
     This Promissory Note is a registered Note and, as provided in the Loan
Agreement, upon surrender of this Promissory Note, together with a written
request from the holder of this Promissory Note for the issuance of a new Note
or Notes of the same aggregate principal amount, the Obligor will issue and
register in the name of a transferee a new Note or Notes. Prior to due
presentment for registration of transfer, the Obligor may treat the person in
whose name this Promissory Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Obligor will
not be affected by any notice to the contrary.
     If an Event of Default occurs and is continuing, the principal of this
Promissory Note may be declared or otherwise become due and payable in the
manner, at the price (including any Positive Make-Whole Amount) and with the
effect provided in the Loan Agreement.
     This Promissory Note has not been registered under the Securities Act of
1933 and may not be transferred in violation of such Act. This Promissory Note
shall be governed by, and construed in accordance with, the laws of the State of
New York, United States of America.
     The Obligor and the holder, by holding this Promissory Note, submit
themselves to the jurisdiction of the Federal or state courts located in New
York, New York in any legal action or proceeding arising out of or with respect
to this Promissory Note. Each such party irrevocably agrees not to assert any
objection which it may ever have to the laying of venue of any such suit, action
or proceeding in any Federal or state court located in New York, New York,
including without limitation, objections regarding jurisdiction to which they
may be entitled by reason of their current or future domiciles; and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

A-2

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     IN WITNESS WHEREOF, the Obligor has duly executed this Promissory Note as
of the date mentioned below.

           
Kansas City Southern de México, S.A. de
C.V., a company incorporated under the laws
of Mexico

      By:           Name:           Title:   Attorney-in-Fact     

A-3

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Amortization Schedule
Equipment Note

A-4

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Loan Request
                    , 20__

To:   DVB Bank AG, as lender (“Lender”) under that certain Loan Agreement dated
as of September 24, 2008 between the Kansas City Southern de México, S.A. de
C.V., as borrower and the Lender (the “Agreement”) (all capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in the
Agreement, unless the context otherwise requires).

From:   Kansas City Southern de México, S.A. de C.V.

Re:   Loan Request

     1. The Closing Date is                     , 20___.
     2. The undersigned hereby requests the Loan in the amount of
$52,200,000.00. The Financing Percentage relating to the requested Loan is
79.1%.
     3. Set forth on Annex A is a description of number and type of Units of
Equipment for which settlement of the purchase price will be made on the Closing
Date with the proceeds of this Loan and the Equipment Cost of such Units.
     4. The undersigned hereby certifies that the requested Loan complies with
the limitations and conditions set forth in Section 3.1(a) of the Agreement and
all conditions to the Loan set forth in Article VI of the Agreement have been
fully satisfied or waived.
     5. The undersigned requests that the Loan be sent by wire transfer in
accordance with the payment instructions attached hereto as Annex B.

           
Kansas City Southern de México, S.A. de C.V.

      By:           Name:           Title:        

Exhibit B
(to Loan Agreement)

 

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Annex A
to Loan Request

                                      Equipment Cost     Equipment   Quantity  
Per Unit   Reporting Marks
GE ES44AC Locomotives
    29     $ 2,275,662.00     KCSM 4730 through
 
                  KCSM 4758, inclusive

B-2

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Annex B
to Loan Request
Wiring Instructions

     
Beneficiary:
  Kansas City Southern de México, S.A. de C.V.
 
   
Account:
  62908 26870
 
   
ABA
  026 0095 93
 
   
Bank:
  Bank of America
 
   
Loc.
  Concorde California

B-3

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Conditions Precedent
     The obligation of the Lender to make the Loan to the Borrower on the
Closing Date shall be subject to the following conditions precedent:
     (1) Execution of the Loan Agreement. On or before the Closing Date, the
Loan Agreement (the “Agreement”) between DVB Bank AG, as Lender (the “Lender”)
and Kansas City Southern de México, S.A. de C.V. (the “Borrower”) shall be in
full force and effect and shall be satisfactory in form and substance to the
Lender, shall have been duly executed and delivered by the Lender and the
Borrower (except that the execution and delivery of the Agreement by a party
thereto shall not be a condition precedent to such party’s obligations
hereunder), and executed counterparts of the Agreement shall have been delivered
to Lender or its counsel on or before the Closing Date.
     (2) Loan Request. The Lender shall have received the Loan Request from the
Borrower relating to the Loan requested to be made on the Closing Date.
     (3) Loan Agreement Supplement. A Loan Agreement Supplement shall be in full
force and effect and shall be satisfactory in form and substance to the Lender,
shall have been duly executed and delivered by the Lender and the Borrower
(except that the execution and delivery of the Agreement by a party thereto
shall not be a condition precedent to such party’s obligations hereunder), and
executed counterparts of the Loan Agreement Supplement shall have been delivered
to Lender or its counsel on or before the Closing Date.
     (4) Appraisal. On or before the Closing Date, the Lender shall have
received an appraisal from the Borrower by RailSolutions, Inc.
     (5) Recordation and Filing. On or before the Closing Date, the Borrower
will (i) cause the Agreement and the Loan Agreement Supplement dated the Closing
Date or appropriate evidence thereof, to be duly filed, recorded and deposited
(A) with the Surface Transportation Board in conformity with 49 U.S.C. § 11301
and (B) with the Registrar General of Canada pursuant to Section 105 of the
Canada Transportation Act and (ii) cause a Uniform Commercial Code precautionary
financing statement covering the security interest created by or pursuant to the
Agreement naming the Borrower, as debtor, and the Lender, as a secured party, to
be filed with (x) the Recorder of Deeds of the District of Columbia and (y) the
Secretary of State of the State of Missouri.
     (6) Officer’s Certificate of the Borrower. On the Closing Date, the Lender
shall have received an Officer’s Certificate dated such date from the Borrower,
substantially in the form attached to the Agreement as Exhibit D.
     (7) Opinions of Counsel. On the Closing Date, the Lender and the Borrower
shall have received the favorable written opinion of each of (A) internal
counsel to the
Exhibit C
(to Loan Agreement)

 

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Borrower and special U.S. counsel to the Borrower, (B) Alvord and Alvord,
special STB counsel and (C) McCarthy Tétrault LLP, special Canadian counsel;
provided that receipt by a party hereto of a favorable written opinion from
counsel to such party shall not be a condition precedent to such party’s
obligations hereunder.
     (8) Insurance Certificate. On or before the Closing Date, the Lender shall
have received a certificate relating to insurance that is required pursuant to
Section 7.5 of the Agreement.
     (9) Corporate Documents. The Lender and the Borrower shall have received
such documents and evidence with respect to the Lender and the Borrower as
either such party may reasonably request in order to establish the authority for
the consummation of the transactions contemplated by the Agreement, the taking
of all corporate and other proceedings in connection therewith and compliance
with the conditions herein or therein set forth and the incumbency of all
officers signing the Agreement.
     (10) No Proceedings. No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Closing Date, to
set aside, restrain, enjoin or prevent the completion and consummation of any of
the Agreement or the transactions contemplated hereby or thereby.
     (11) Governmental Actions. All actions, if any, required to have been taken
on or prior to the Closing Date in connection with the transactions contemplated
by the Agreement on the Closing Date shall have been taken by any governmental
or political agency, subdivision or instrumentality of the United States and all
orders, permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Closing Date in connection with such
transactions contemplated by the Agreement on the Closing Date shall have been
issued, and all such orders, permits, waivers, exemptions, authorizations and
approvals shall be in full force and effect, on the Closing Date.
     (12) Mexican Trust Agreement. The Mexican Trust Agreement, in form and
substance satisfactory to the parties thereto, shall have been executed by the
Borrower, the Lender and the Trustee and the Lender shall have received an
original counterpart of the executed Mexican Trust Agreement.

C-2

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Form of Officer’s Certificate of
Kansas City Southern de México, S.A. de C.V.
     The undersigned certifies that he is the
                                         of Kansas City Southern de México, S.A.
de C.V. (the “Borrower”) and that, as such, he is authorized to execute this
Certificate on behalf of the Borrower, and further certifies that (i) the
Borrower has performed and complied with all agreements and conditions contained
in the Loan Agreement dated as of September 24, 2008, between DVB Bank AG and
the Borrower (the “Agreement”) which are required to be performed or complied
with by the Borrower on or before the date hereof (capitalized terms used herein
without definition have the meanings assigned to them in the Agreement) and
(ii) the representations and warranties of the Borrower set forth below are true
and correct in all material respects on and as of the date hereof, except to the
extent that such representations and warranties relate solely to an earlier date
(in which case such representations and warranties were true and correct on and
as of such earlier date):
     (a) the Borrower is a company duly organized and validly existing under the
laws of Mexico, is duly licensed or qualified in each jurisdiction where it
operates in which the failure to so qualify would have a material adverse effect
on its ability to enter into and perform its obligations under the Agreement,
has the corporate power and authority to carry on its business as now conducted,
and has the requisite power and authority to execute, deliver and perform its
obligations under the Agreement;
     (b) the Agreement has been duly authorized by all necessary corporate
action (no shareholder approval being required), executed and delivered by the
Borrower, and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency and
similar laws and by general principles of equity;
     (c) the execution, delivery and performance by the Borrower of the
Agreement and compliance by the Borrower with all of the provisions thereof do
not and will not contravene any law or regulation, or any order of any court or
governmental authority or agency applicable to or binding on the Borrower or any
of its properties, or contravene the provisions of, or constitute a default by
the Borrower under, or result in the creation of any Lien (except for Permitted
Liens) upon the property of the Borrower under its by-laws or any material
indenture, mortgage, contract or other agreement or instrument to which the
Borrower is a party or by which the Borrower or any of its property is bound or
affected;
     (d) except for those matters discussed in the financial statements of the
Borrower referred to in paragraph (e) below, there are no proceedings pending
or, to the knowledge of the Borrower, threatened against the Borrower in any
court or before any governmental authority or arbitration board or tribunal
which individually or in the aggregate would materially and adversely affect the
financial condition of the Borrower or impair the ability of the Borrower to
perform its obligations under the Agreement or
Exhibit D
(to Loan Agreement)

 

--------------------------------------------------------------------------------

 

which questions the validity of the Agreement or any action taken or to be taken
pursuant thereto;
     (e) the audited consolidated balance sheet and consolidated statements of
income and retained earnings and cash flows of the Borrower for the fiscal year
ended December 31, 2007, fairly present, in conformity with U.S. generally
accepted accounting principles, the consolidated financial position of the
Borrower as of such date and the results of its operations for the period then
ended. Since December 31, 2007, there has been no material adverse change in
such financial condition or results of operations;
     (f) the Equipment is covered by the insurance required by Section 7.5 of
the Agreement and all premiums due prior to the Closing Date in respect of such
insurance shall have been paid in full;
     (g) no Event of Default has occurred and is continuing and no Casualty
Occurrence has occurred; and
     (h) no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery or performance by the Borrower of the Agreement, except
for the filings contemplated by Section 7.13 of the Agreement.
     In Witness Whereof, the undersigned has hereunto subscribed his/her name
this ___day of                     , 2008.

                        Name:         Title:   Attorney-in-Fact     

D-2

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Loan Agreement Supplement No. ___
Between
Kansas City Southern de México, S.A. de C.V.,
as Borrower
and
DVB Bank AG,
as Lender
___GE ES44AC Locomotives
Dated                      ___, 2008
 
     Memorandum of Loan Agreement Supplement No. ___ filed with the Surface
Transportation Board pursuant to 49 U.S.C. §11301 on                      ___,
2008, at ___:______ ___.M., Recordation Number                     , and
deposited in the Office of the Registrar General of Canada pursuant to
Section 105 of the Canada Transportation Act on                      ___, 2008,
at ___:______ ___.M.
Exhibit E
(to Loan Agreement)

 

--------------------------------------------------------------------------------

 

Loan Agreement Supplement No. ___
     Loan Agreement Supplement No. ___ dated                      ___, 2008 by
and between Kansas City Southern de México, S.A. de C.V., a company incorporated
under the laws of Mexico (together with its successors and permitted assigns,
the “Borrower”) and DVB Bank AG, a German corporation (together with its
successors and permitted assigns, the “Lender”).
     Whereas, the Loan Agreement, dated as of September 24, 2008 (as amended,
supplemented or restated and in effect from time to time, the “Loan Agreement”)
between the Borrower and the Lender provides for the execution and delivery of
supplements thereto (each a “Loan Agreement Supplement” and collectively, “Loan
Agreement Supplements”) substantially in the form hereof which shall
particularly describe the Equipment (such term and other terms defined in the
Loan Agreement being used herein as therein defined) and any Replacement Units
(terms used in this instrument having the meanings assigned thereto in the Loan
Agreement);
     Whereas, the Loan Agreement relates to the Units of Equipment described in
Schedule I hereto and made a part hereof;
     Now, therefore, the indebtedness described in the Notes, the prompt and
complete payment of the principal of, interest on and Positive Make-Whole
Amount, if any, with respect to the Notes, and all other amounts due from the
Borrower with respect to the Notes from time to time outstanding under the Loan
Agreement and all other amounts due thereunder and the performance and
observance by the Borrower of all the agreements, covenants and provisions in
the Loan Agreement and in the Notes is secured by the Equipment and the income
and proceeds thereof pursuant to the terms of the Mexican Trust Agreement. To
the extent that the Borrower obtains, or is deemed to have obtained, any right,
title or interest in the Equipment and the income and proceeds thereof, the
Borrower grants to the Lender, subject to Section 7.16 of the Loan Agreement, a
security interest in the Equipment and the income and proceeds thereof as
collateral security for the indebtedness described in the Notes and the Loan
Agreement and the prompt and complete payment of the principal of, interest on,
and Positive Make-Whole Amount, if any, with respect to the Notes, and all other
amounts due from the Borrower with respect to the Notes from time to time
outstanding under the Loan Agreement and all other amounts due from the Borrower
under the Loan Agreement.
     This Loan Agreement Supplement shall be construed as supplemental to the
Loan Agreement and shall form a part thereof; and the Loan Agreement is hereby
incorporated by reference herein to the same extent as if fully set forth herein
and is hereby ratified, approved and confirmed in all respects.
     This Loan Agreement Supplement shall be governed by and construed in
accordance with the laws of the State of New York, including all matters of
construction, validity and performance.

E-2

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     In Witness Whereof, the parties hereto have caused this Loan Agreement
Supplement to be duly executed, as of the day and year first above written.

           
Kansas City Southern de México, S.A. de
C.V., as Borrower

      By:           Name:           Title:        

            DVB Bank AG, as Lender
      By:           Name:           Title:        

E-3

--------------------------------------------------------------------------------

 

                 
State of
        )      
 
               
 
        )     SS.:
County of
        )      
 
               

     On this ___day of                                         , 2008, before me
personally appeared                                          to me personally
known, who being by me duly sworn, says that (s)he is the
                                         of DVB Bank AG, that said instrument
was signed on                                          ___, 2008, on behalf of
said corporation by authority of its Management Board and Supervisory Board and
(s)he acknowledged that the execution of the foregoing instrument was the free
act and deed of said corporation.

                  By           Notary Public             

(SEAL)
My Commission Expires:                                         

                 
State of
        )      
 
               
 
        )     SS.:
County of
        )      
 
               

     On this ___day of                                         , 2008, before me
personally appeared                                          to me personally
known, who being by me duly sworn, says that (s)he is the
                                         of Kansas City Southern de México, S.A
de C.V., that said instrument was signed on
                                         ___, 2008, on behalf of said
corporation by authority of its Board of Directors; and (s)he acknowledged that
the execution of the foregoing instrument was the free act and deed of said
corporation.

                  By           Notary Public             

(SEAL)
My Commission Expires:                                         

E-4

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Schedule I
to
Loan Agreement Supplement No. ___

                                  Equipment Cost     Equipment   Quantity   Per
Unit   Reporting Marks
GE ES44AC Locomotives
    29     $ 2,275,662.00     KCSM 4730 through
 
                  KCSM 4758, inclusive

E-5

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Schedule II
to
Loan Agreement Supplement No. ___
Terms of Notes

                              Principal Amount   Interest Rate   Final Maturity
 
  $ 52,200,000.00       6.1950 %   _September 29, 2023

E-6

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Secretaría de Hacienda y Crédito Público Listing
Germany
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
China
Korea
Denmark
Ecuador
Spain
United States of America
Finland
France
Greece
Indonesia
Ireland
Israel
Italy
Japan
Luxembourg
Norway
New Zealand
Netherlands
Poland
Portugal
United Kingdom
Czech Republic
Slovakia
Romania
Russia
Singapore
Sweden
Switzerland
Exhibit F
(to Loan Agreement)