Exhibit 10.1

EXECUTION COPY

KANSAS CITY SOUTHERN de MÉXICO, S.A. de C.V.

$185,000,000 6.625% Senior Notes due 2020

PLACEMENT AGREEMENT

December 14, 2010

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December 14, 2010

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

J.P. Morgan Securities LLC

Scotia Capital (USA) Inc.

BBVA Securities Inc.

Citigroup Global Markets Inc.

UBS Securities LLC

c/o Merrill Lynch, Pierce, Fenner & Smith

Incorporated

One Bryant Park

New York, New York 10036

Dear Sirs and Mesdames:

Kansas City Southern de México, S.A. de C.V. (formerly known as TFM, S.A. de
C.V.) (the “Company”), a sociedad anónima de capital variable organized under
the laws of the United Mexican States (“Mexico”), proposes to issue and sell to
the several purchasers named in Schedule I hereto (the “Placement Agents”),
acting through Merrill Lynch, Pierce, Fenner & Smith Incorporated as
representative (the “Representative”), $185,000,000 aggregate principal amount
of its 6.625% Senior Notes due December 15, 2020 (the “Securities”) to be issued
pursuant to the provisions of an Indenture to be executed on or about
December 20, 2010 (the “Indenture”) between the Company and U.S. Bank National
Association, as Trustee (the “Trustee”).

The Securities will be offered without being registered under the Securities Act
of 1933, as amended (the “Securities Act”), to people reasonably believed to be
qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in offshore
transactions in reliance on Regulation S under the Securities Act (“Regulation
S”).

The Placement Agents and their direct and indirect transferees will be entitled
to the benefits of a Registration Rights Agreement to be executed on or about
December 20, 2010 between the Company and the Placement Agents (the
“Registration Rights Agreement”).

In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the “Preliminary Memorandum”) and will prepare
a final offering memorandum (the “Final Memorandum” and, with the Preliminary
Memorandum, each a “Memorandum”) including or incorporating

 

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by reference a description of the terms of the Securities, the terms of the
offering and a description of the Company. “Time of Sale Memorandum” means the
Preliminary Memorandum together with the information set forth on Schedule II to
this Agreement that has been prepared and delivered by the Company to the
Placement Agents in connection with the offering of the Securities. The
“Applicable Time” means 3:38 p.m. Eastern Standard Time on December 14, 2010.
Reference to “this Agreement” shall mean this Placement Agreement.

1. Representations and Warranties. The Company represents and warrants to, and
agrees with, you that:

(a) (i) The Time of Sale Memorandum, at the Applicable Time, did not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and (ii) the Preliminary Memorandum does not
contain and the Final Memorandum, as of its date and as of the Closing Date (as
defined below), will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Time of Sale Memorandum or either Memorandum
based upon information relating to any Placement Agent furnished to the Company
in writing by such Placement Agent through you expressly for use therein, it
being understood and agreed that the only such information furnished by or on
behalf of any Placement Agent consists of the information described as such in
Section 8(b) hereof.

(b) The Company (including its agents and representatives, other than the
Placement Agents in their capacity as such) has not prepared, made, used,
authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any written communication that constitutes an offer to sell
or solicitation of an offer to buy the Securities (an “Issuer Written
Communication”) (other than the Final Memorandum, the Time of Sale Memorandum
and any electronic roadshow).

(c) The Company has been duly incorporated, is validly existing as a sociedad
anónima de capital variable under the laws of Mexico in good standing (to the
extent applicable), has the corporate power and authority to own, lease and
operate its property and to conduct its business as described in the Time of
Sale Memorandum and each Memorandum and is duly qualified to transact business
and is in good standing (to the extent applicable) in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires

 

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such qualification, except to the extent that the failure to be so qualified or
be in good standing (to the extent applicable) would not reasonably be expected
to have a material adverse effect on the Company and its subsidiaries, taken as
a whole.

(d) Each of the subsidiaries of the Company has been duly organized, is validly
existing and in good standing (to the extent applicable) under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own,
lease and operate its property and to conduct its business as described in the
Time of Sale Memorandum and each Memorandum and is duly qualified to transact
business and is in good standing (to the extent applicable) in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing (to the extent applicable) would not reasonably
be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital stock of
each of the subsidiaries held by the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims other than the shares (acciones) and/or equity quotas (partes
sociales) representing 100% of the stated capital (capital social) of the
Company’s subsidiaries, Arrendadora KCSM, S. de R.L. de C.V., Highstar Harbor
Holdings México, S. de R.L. de C.V., MTC Puerta México, S. de R.L. de C.V. and
Vamos a México, S.A. de C.V., which have been pledged by the Company, its
subsidiaries and affiliates as collateral for the secured credit agreement,
dated as of August 30, 2010, entered into by and between the Company, the
lenders defined therein, The Bank of Nova Scotia, as administrative agent for
the lenders, Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo
Financiero Scotiabank Inverlat, as collateral agent and Scotia Capital and Banc
of America Securities LLC, as joint lead arrangers and joint bookrunners.

(e) This Agreement has been duly authorized, executed and delivered by the
Company.

(f) The capitalization of the Company conforms as to legal matters to the
description thereof contained in the Time of Sale Memorandum and the Final
Memorandum.

(g) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Placement Agents in accordance with the terms of this
Agreement, will be valid and binding

 

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obligations of the Company, enforceable against the Company in accordance with
their terms, subject to applicable concurso mercantil, bankruptcy, insolvency
and similar laws affecting creditors’ rights generally and equitable principles
of general applicability, and will be entitled to the benefits of the Indenture
pursuant to which such Securities are to be issued, and the Registration Rights
Agreement.

(h) The Registration Rights Agreement has been duly authorized and, on the
Closing Date, will have been duly executed and delivered by, and will constitute
a valid and binding agreement of, the Company, enforceable against the Company
in accordance with its terms, except as the enforcement thereof may be limited
by applicable concurso mercantil, bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and equitable principles of general
applicability and except as rights to indemnification under the Registration
Rights Agreement may be limited by applicable law.

(i) The Indenture has been duly authorized by the Company and, at the Closing
Date, will have been duly executed and delivered by the Company and will
constitute a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
limited by applicable concurso mercantil, bankruptcy, insolvency and similar
laws affecting creditors’ rights generally and equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
“TIA”), applicable to an indenture qualified thereunder.

(j) The execution and delivery by the Company of, and the performance by the
Company of its obligations under this Agreement, the Indenture, the Registration
Rights Agreement and the Securities (the “Transaction Documents”) and the
consummation of the transactions contemplated therein have been duly authorized
by the Company, the Company has all power and authority to execute, deliver and
perform its obligations under the Transaction Documents and the execution,
delivery and performance by the Company of its obligations under the Transaction
Documents and the consummation of the transactions contemplated therein,
including, without limitation, the application of the proceeds from the sale of
the Securities as described in the Memorandum and the Time of Sale Memorandum,
will not (i) contravene, conflict with or constitute a breach of, or default
under any provision of (x) the estatutos sociales or any other organizational
document of the Company or any of its subsidiaries, (y) the Concession (as
defined below) or any law applicable to the Company and its operations
(including, without limitation, its subsidiaries) or (z) any agreement or other
instrument binding upon the

 

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Company, any of its subsidiaries or Kansas City Southern (“KCS”) that is
included in or incorporated by reference into the Annual Report on Form 10-K for
the year ended December 31, 2009, the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2010, the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010 and the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2010 of the Company or KCS, (ii) result in an event or condition
which gives the holder of any note, debenture, or other evidence of indebtedness
that is included in or incorporated by reference into the Annual Report on Form
10-K for the year ended December 31, 2009, the Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010, the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2010 and the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2010 of the Company or KCS (or any person acting on
such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of its
subsidiaries, or (iii) contravene, conflict with or constitute a breach of, or
default under any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any of its subsidiaries and their
respective operations, except to the extent that such violation, breach or
default described in item (iii) of this Section 1(g) would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

(k) No consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under the Transaction Documents, except (i) such as may be
required (x) by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities, (y) by U.S. Federal and
state securities laws with respect to the Company’s obligations under the
Registration Rights Agreement, and (z) the filing of a notice with the Comisión
Nacional Bancaria y de Valores of Mexico (the “CNBV”) regarding the issuance of
the Securities and the terms thereof, such filing to be delivered by the Company
to the CNBV prior to the Closing Date, and (ii) such consents, approvals,
authorizations, filings or orders as have been obtained.

(l) The Company holds a valid concession title granted in 1997 for a period of
50 years, which may be renewed under certain conditions for an additional period
of up to 50 years, to provide freight transportation services over its rail
lines as described in the Time of Sale Memorandum and the Final Memorandum (the
“Concession”). The Concession is currently, and has at all times since its
granting been, in full force and effect and no proceeding to revoke, suspend or
lapse the effectiveness of the Concession is pending before or, to the Company’s
knowledge, threatened by any Mexican federal governmental authority.

 

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Except for the rights held by the government of Mexico as described in the Time
of Sale Memorandum and the Final Memorandum, the Concession and the Company’s
rights deriving therefrom are free and clear of any liens and encumbrances.

(m) The Company and each of its subsidiaries own, possess or has obtained all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, including, without limitation, the Concession, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof and
as described in the Time of Sale Memorandum and the Final Memorandum, except to
the extent that the failure to own, possess or obtain such licenses, permits,
certificates, consents, orders, approvals and other authorizations would not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and neither the Company nor any of its
subsidiaries has received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order, approval
or other authorization which, individually or in the aggregate, if subject to an
unfavorable or adverse decision or ruling, would reasonably be expected to
result in a material adverse effect on the Company and its subsidiaries, taken
as a whole.

(n) The historical audited consolidated financial statements and notes thereto
of the Company included, or incorporated by reference, in the Time of Sale
Memorandum and the Final Memorandum (i) have been prepared in accordance with
U.S. generally accepted accounting principles (“U.S. GAAP”) (prior historical
audited consolidated financial statements and notes of the Company prepared in
accordance with International Financial Reporting Standards (“IFRS”) have been
re-stated in accordance with U.S. GAAP), (ii) present fairly in all material
respects the financial condition, results of operations and cash flows of the
Company and each of its subsidiaries taken as a whole, and (iii) comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act which would be applicable if the offer of the Securities were
required to be registered under the Securities Act; the summary financial data
in the Time of Sale Memorandum and the Final Memorandum, including all items
reconciled to U.S. GAAP, fairly present, on the basis stated in the Time of Sale
Memorandum and the Final Memorandum, the information included therein. No other
financial statements are required to be included in the Time of Sale Memorandum
or the Final Memorandum.

 

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(o) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) all transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(p) The Company maintains an effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed
to ensure that information required to be disclosed by the Company in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission’s
rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure. The Company
has carried out evaluations of the effectiveness of its disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.

(q) KPMG LLP (“KPMG”), who has audited the consolidated financial statements of
the Company and its subsidiaries and delivered its report with respect to the
consolidated financial statements of the Company and its subsidiaries as of
December 31, 2007, December 31, 2008 and December 31, 2009 included, or
incorporated by reference, in the Time of Sale Memorandum and the Final
Memorandum, are independent public accountants with respect to the Company
within the meaning and as required by the Securities Act and all the applicable
rules and regulations published thereunder and the rules and regulations of the
Public Company Accounting Oversight Board.

(r) The Company and each of its subsidiaries has filed all tax returns (foreign,
national, local or other) required to be filed and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith and
except where the failure to file or pay would not, individually or in the
aggregate, result in a material adverse effect on the Company and its
subsidiaries, taken as a whole.

(s) Except as described in the Time of Sale Memorandum and Final Memorandum,
payments in respect of the Transaction Documents

 

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(including the transfer, sale and delivery of the Securities), are not subject
under the current laws of any applicable jurisdiction or any political
subdivision thereof or therein to any withholdings or similar charges for or on
account of taxation or otherwise other than taxes imposed on the income or gain
of the Placement Agents whose net income or gains are otherwise subject to any
tax by Mexico or any political subdivision thereof or therein.

(t) Except as described in the Time of Sale Memorandum and Final Memorandum,
payments made to a foreign holder (as defined in the Time of Sale Memorandum and
each Memorandum) by the Company under the Securities will not be subject under
the current laws of Mexico or any political subdivision thereof to any
withholdings or similar charges for or on account of taxation.

(u) Except as described in the Time of Sale Memorandum and Final Memorandum,
non-Mexican holders of the Securities will not be deemed resident, domiciled,
carrying on business or subject to taxation in Mexico solely by reason of the
execution, delivery, performance or enforcement of each of the Transaction
Documents.

(v) There are no stamp or other issuance or transfer taxes or duties or other
similar fees or charges required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale by the Company of the
Securities.

(w) Since the respective dates as of which information is given in the Time of
Sale Memorandum and each Memorandum, there has not occurred any material adverse
change, or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that set
forth in the Preliminary Memorandum.

(x) Neither the Company nor any of its subsidiaries is (i) in violation, breach
of, or default under any provision of (x) the estatutos sociales or any other
organizational document of the Company or any of its subsidiaries, (y) the
Concession or any law applicable to the Company and its operations (including,
without limitation, its subsidiaries) or (z) any agreement or other instrument
binding upon the Company, any of its subsidiaries or KCS that is included in or
incorporated by reference into the Annual Report on Form 10-K for the year ended
December 31, 2009, the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2010, the Quarterly Report on Form 10-Q for the quarter ended June 30,
2010 and the Quarterly Report on Form 10-Q for the quarter ended September 30,

 

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2010 of the Company or KCS, (ii) currently subject to an event or condition
which gives the holder of any note, debenture, or other evidence of indebtedness
that is included in or incorporated by reference into the Annual Report on Form
10-K for the year ended December 31, 2009, the Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010, the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2010 and the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2010 of the Company or KCS (or any person acting on
such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or its
subsidiaries, or (iii) in violation, breach of, or default under any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any of its subsidiaries, except to the extent that any such
violation, breach or default described in items (i)(z) or (iii) of this
Section 1(t) would not reasonably be expected to have a material adverse effect
on the Company and its subsidiaries, taken as a whole.

(y) There are no legal or governmental proceedings pending or, to the Company’s
knowledge, threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its subsidiaries is
subject other than proceedings that are accurately described in all material
respects in the Time of Sale Memorandum and each Memorandum and proceedings that
would not reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or on the power or ability of
the Company to perform its obligations under the Transaction Documents or to
consummate the transactions contemplated by the Time of Sale Memorandum and the
Final Memorandum.

(z) The Company and each of its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and municipal laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants, including,
without limitation, the environmental obligations under the Concession
(“Environmental Laws”), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.

 

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(aa) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

(bb) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any of its
subsidiaries, is threatened or, to the Company’s knowledge, is imminent, and to
the knowledge of the Company and any of its subsidiaries there is no existing or
imminent labor disturbance by the employees of any of their respective principal
suppliers, contractors or customers that would be reasonably likely to have a
material adverse effect on the Company and its subsidiaries, taken as a whole.

(cc) The Company and each of its subsidiaries have not, nor to the knowledge of
the Company, has any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
used any of the funds of the Company or any of its subsidiaries for any
contribution, gift, entertainment or other expense relating to political
activity in contravention of any applicable law, made any direct or indirect
payment to any foreign or domestic government official or employee in
contravention of any applicable law from any of the funds of the Company or any
of its subsidiaries, or made any bribe, rebate, payoff influence payment,
kickback or other unlawful payment in contravention of any applicable law,
including the U.S. Foreign Corrupt Practices Act.

(dd) The Company and each of its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary for companies engaged in the same or
similar businesses; all such policies covering any of their business, assets,
employees, officers and directors are in full force and effect; the Company and
each of its subsidiaries is in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; and neither the Company nor any of its subsidiaries has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue their businesses.

 

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(ee) The Company and each of its subsidiaries have no immunity from jurisdiction
of any court of (i) any jurisdiction in which they own or lease property or
assets, (ii) the United States or the State of New York or (iii) Mexico or any
political subdivision thereof or from any legal process (whether through service
of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to themselves or their property and assets
or this Agreement, the Indenture or the Registration Rights Agreement or actions
to enforce judgments in respect thereof.

(ff) No relationship, direct or indirect, exists between the Company or any of
its subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, which would be required by the Securities Act, if the offer of the
Securities were required to be registered under the Securities Act, to be
described in the Time of Sale Memorandum and the Final Memorandum which is not
so described.

(gg) The Company is not and does not expect to become a passive foreign
investment company as defined in Section 1297 of the U.S. Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder.

(hh) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department.

(ii) The Company and each of its subsidiaries are in material compliance with
applicable Mexican and U.S. anti-terrorism and anti-money laundering rules and
regulations, including Title III of the USA Patriot Act, the regulations
administered by the U.S. Department of the Treasury, including its Office of
Foreign Assets Control, and other applicable Mexican and U.S. federal, state or
non-U.S. anti-money laundering laws and regulations (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending,
to the knowledge of the Company, or threatened.

(jj) The Company is subject to and is reporting in accordance with the
requirements of Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and all documents incorporated by
reference in the Time of Sale Memorandum and the Final Memorandum comply as to
form in all material respects with the applicable requirements of the Exchange
Act.

 

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(kk) The Company has not paid or agreed to pay to any person any compensation
for soliciting another to purchase any securities of the Company, except as
contemplated in this Agreement.

(ll) The statements in, or incorporated by reference in, the Time of Sale
Memorandum and the Final Memorandum under the headings “Capitalization”,
“Business”, “Description of the Notes”, and “Taxation” fairly summarize the
matters therein described.

(mm) There is and has been no failure on the part of the Company and to the
Company’s knowledge, after reasonable inquiry, any of the Company’s directors or
officers, in their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”) applicable to the Company as of
the date hereof.

(nn) Until March 31, 2005 the Company was a “foreign issuer” (as defined in
Regulation S). Since April 1, 2005, the Company has been a “domestic issuer” (as
defined in Regulation S) and has adopted all the necessary measures consistent
with its status as such, and the Company reasonably believes that there is no
substantial U.S. market interest (as defined in Regulation S) in its debt
securities.

(oo) The Company is not, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Time
of Sale Memorandum and the Final Memorandum will not be, required to register as
an “investment company” as such term is defined in the Investment Company Act of
1940, as amended.

(pp) Neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act, and, for avoidance of doubt, including
KCS, an “Affiliate”)) of the Company has directly, or through any agent,
(i) sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) offered,
solicited offers to buy or sold the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.

 

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(qq) None of the Company, its Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Securities and the Company and its
Affiliates and any person acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S.

(rr) It is not necessary in connection with the offer, sale and delivery of the
Securities to the Placement Agents or the resale to subsequent purchasers in the
manner contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the TIA.

(ss) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act.

(tt) The Company has validly, legally, effectively and irrevocably submitted to
the personal jurisdiction of any state or Federal court in the Borough of
Manhattan, The City of New York, New York, has validly, legally, effectively and
irrevocably waived any objection to the venue of a proceeding in any such court,
and has validly, legally, effectively and irrevocably appointed C T Corporation
as its authorized agent for service of process.

2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Placement Agents, and each Placement Agent, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the aggregate principal amount of the Securities set forth in Schedule I
hereto opposite its name at a purchase price of 98.00% of the aggregate
principal amount thereof (the “Purchase Price”).

The Company hereby agrees that, without the prior written consent of the
Representative, it will not, during the period beginning on the date hereof and
continuing to and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt of the Company or warrants to purchase debt of the
Company substantially similar to the Securities (other than the sale of the
Securities under this Agreement).

3. Terms of Offering. You have advised the Company that the Placement Agents
will make an offering of the Securities purchased by the Placement Agents
hereunder on the terms to be set forth in the Time of Sale Memorandum, as soon
as practicable after this Agreement is entered into as in your judgment is
advisable.

 

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4. Payment and Delivery. Payment for the Securities shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several Placement
Agents at 10:00 a.m., New York City time, on December 20, 2010, or at such other
time on the same or such other date, not later than December 20, 2010, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the “Closing Date.”

The Securities shall be in definitive form or global form, as specified by you,
and registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date. The
Securities shall be delivered to you on the Closing Date for the respective
accounts of the several Placement Agents, with any transfer taxes payable in
connection with the transfer of the Securities to the Placement Agents duly
paid, against payment of the Purchase Price therefor.

5. Conditions to the Placement Agents’ Obligations. The several obligations of
the Placement Agents to purchase and pay for the Securities on the Closing Date
are subject to the following conditions:

(a) Subsequent to the execution and delivery of this Agreement and on or prior
to the Closing Date:

(i) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded the Company or any of the securities of the Company, KCS or
any of their subsidiaries or in the rating outlook for the Company by any
“nationally recognized statistical rating organization,” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;

(ii) the Company shall have obtained all consents, approvals, authorizations and
orders of, and shall have duly made all registrations, qualifications and
filings with, any court or regulatory authority or other governmental agency or
instrumentality, including without limitation the CNBV, required in connection
with the issuance and sale of the Securities and the execution, delivery and
performance of this Agreement; and

(iii) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set

 

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forth in the Time of Sale Memorandum provided to prospective purchasers of the
Securities that, in your reasonable judgment, is material and adverse and that
makes it, in your reasonable judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Securities on the terms and in the
manner contemplated in the Time of Sale Memorandum.

(b) The Placement Agents shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 5(a)(i) and to the effect that the representations
and warranties of the Company contained in this Agreement are true and correct
as of the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date. The officer signing and
delivering such certificate may rely upon his or her knowledge as to proceedings
threatened.

(c) The Placement Agents shall have received on the Closing Date an opinion of
White & Case LLP, outside U.S. counsel for the Company, dated the Closing Date,
in form and substance satisfactory to the Representative. Such opinion shall be
rendered to the Placement Agents at the request of the Company and shall so
state therein.

(d) The Placement Agents shall have received on the Closing Date an opinion of
White & Case, S.C., outside Mexican counsel for the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Representative. Such
opinion shall be rendered to the Placement Agents at the request of the Company
and shall so state therein.

(e) The Placement Agents shall have received on the Closing Date an in-house
legal opinion from Edgar Aguileta Gutiérrez, Associate General Counsel and
Alternate Corporate Secretary of the Company, dated the Closing Date, in form
and substance reasonably satisfactory to the Representative. Such opinion shall
be rendered to the Placement Agents at the request of the Company and shall so
state therein.

(f) The Placement Agents shall have received on the Closing Date an opinion of
Shearman & Sterling LLP, U.S. counsel for the Placement Agents, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative.

(g) The Placement Agents shall have received on the Closing Date an opinion of
Mijares, Angoitia, Cortés y Fuentes, S.C., Mexican counsel for the Placement
Agents, dated the Closing Date, in form and substance reasonably satisfactory to
the Representative.

 

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(h) The Placement Agents shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Representative, from KPMG,
independent public accountants, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained
in the Time of Sale Memorandum and the Final Memorandum; provided, however, that
the letter delivered on the Closing Date shall use a “cut-off date” not earlier
than the date hereof.

(i) As of the Closing Date, the Company shall have entered into the Registration
Rights Agreement and the Placement Agents shall have received executed
counterparts thereof.

(j) As of the Closing Date, the Company and the Trustee shall have entered into
the Indenture and the Placement Agents shall have received executed counterparts
thereof.

6. Covenants of the Company. In further consideration of the agreements of the
Placement Agents contained in this Agreement, the Company covenants with each
Placement Agent as follows:

(a) To furnish to you in New York City, without charge, prior to 10:00 a.m., New
York City time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 6(b), as many electronic copies of
the Time of Sale Memorandum, either Memorandum and any supplements and
amendments thereto as you may reasonably request.

(b) Before amending or supplementing the Time of Sale Memorandum or either
Memorandum, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to which you
reasonably object, provided that if, in the opinion of counsel to the Company,
any such amendment or supplement shall be required by law or regulation to be
used, that the Company be permitted to use such amendment or supplement after
taking into account such comments as you may reasonably make on the content,
form or other aspects of such amendment or supplement. In addition, before
making, preparing, using, authorizing, approving or distributing any Issuer
Written Communication, the Company will furnish to the Representative a copy of
such Issuer Written Communication for review and will not make, prepare, use,
authorize, approve or distribute any such Issuer Written Communication to which
the Representative reasonably objects.

 

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(c) If the Time of Sale Memorandum is being used to solicit offers to buy the
Securities at a time when the Final Memorandum is not yet available to
prospective purchasers and any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Time of Sale Memorandum in
order to make the statements therein, in the light of the circumstances, not
misleading, or if, in the opinion of counsel for the Placement Agents, it is
necessary to amend or supplement the Time of Sale Memorandum to comply with
applicable law, forthwith to prepare and furnish, at the Company’s own expense,
to the Placement Agents upon request, either amendments or supplements to the
Time of Sale Memorandum so that the statements in the Time of Sale Memorandum as
so amended or supplemented will not, in the light of the circumstances when
delivered to a prospective purchaser, be misleading or so that the Time of Sale
Memorandum, as amended or supplemented, will comply with law.

(d) If, during such period after the date hereof and prior to the date on which
all of the Securities shall have been sold by the Placement Agents, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Final Memorandum in order to make the statements therein, in the
light of the circumstances when the Final Memorandum is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the Placement
Agents, it is necessary to amend or supplement the Final Memorandum to comply
with applicable law, forthwith to prepare and furnish, at its own expense, to
the Placement Agents, either amendments or supplements to the Final Memorandum
so that the statements in the Final Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, be misleading or so that the Final Memorandum, as
amended or supplemented, will comply with applicable law.

(e) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.

(f) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement. It
is understood, however, that except as provided in this Section, Section 8, and
the last paragraph of Section 10, or as otherwise agreed by the parties hereto
in writing, the Placement Agents will pay all of their costs and expenses,
including fees and disbursements of their counsel, transfer taxes payable on
resale of any of the Securities by them and any advertising expenses connected
with any offers they may make.

 

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(g) Neither the Company nor any Affiliate will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) which could be integrated with the sale of the Securities in
a manner which would require the registration under the Securities Act of the
Securities.

(h) Not to solicit any offer to buy or offer or sell the Securities by means of
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

(i) While any of the Securities remain “restricted securities” within the
meaning of the Securities Act, to make available, upon request, to any seller of
such Securities the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.

(j) None of the Company, its Affiliates or any person acting on its or their
behalf (other than the Placement Agents) will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the
Securities, and the Company and its Affiliates and each person acting on its or
their behalf (other than the Placement Agents) will comply with the offering
restrictions requirement of Regulation S.

(k) During the period of one year after the Closing Date, the Company will not,
and will not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to resell any of the Securities which constitute “restricted
securities” under Rule 144 that have been reacquired by any of them.

(l) Not to take any action prohibited by Regulation M under the Exchange Act in
connection with the distribution of the Securities contemplated hereby.

(m) To comply in all material respects with all applicable securities and other
laws, rules and regulations, including without limitation, the Sarbanes-Oxley
Act, and to cause the officers and directors of the Company, in their capacities
as such, to comply with such laws, rules and regulations, including without
limitation, the provisions of the Sarbanes-Oxley Act.

 

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(n) To comply in all material respects with all matters imposed under the U.S.
securities laws applicable, from and after April 1, 2005, to entities that are
not foreign private issuers under such laws, including, to the extent
applicable, the preparation of the Company’s consolidated financial statements
from and after January 1, 2005 under U.S. GAAP.

7. Offering of Securities; Restrictions on Transfer. (a) Each Placement Agent,
severally and not jointly, represents and warrants that such Placement Agent is
a qualified institutional buyer as defined in Rule 144A under the Securities Act
(a “QIB”). Each Placement Agent, severally and not jointly, agrees with the
Company that (i) it will not solicit offers for, or offer or sell, such
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Securities only from, and will
offer such Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States, QIBs and (B) in the case of offers
outside the United States, to persons other than U.S. persons (“foreign
purchasers,” which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) in reliance upon Regulation S under the
Securities Act that, in each case, in purchasing such Securities are deemed to
have represented and agreed as provided in the Time of Sale Memorandum under the
caption “Transfer Restrictions”.

(b) Each Placement Agent, severally and not jointly, represents, warrants, and
agrees with respect to offers and sales outside the United States that:

(i) such Placement Agent understands that no action has been or will be taken in
any jurisdiction by the Company that would permit a public offering of the
Securities, or possession or distribution of the Time of Sale Memorandum or
either Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose is
required;

(ii) such Placement Agent will comply with all applicable laws and regulations
in each jurisdiction in which it acquires, offers, sells or delivers Securities
or has in its possession or distributes the Time of Sale memorandum or either
Memorandum or any such other material, in all cases at its own expense;

(iii) the Securities have not been registered under the Securities Act and may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance

 

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with Rule 144A or Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act;

(iv) such Placement Agent has offered the Securities and will offer and sell the
Securities (A) as part of their distribution at any time and (B) otherwise until
40 days after the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S or as otherwise permitted
in Section 7(a); accordingly, neither such Placement Agent, its Affiliates nor
any persons acting on its or their behalf have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect to
the Securities, and any such Placement Agent, its Affiliates and any such
persons have complied and will comply with the offering restrictions requirement
of Regulation S;

(v) such Placement Agent (A) has only communicated or caused to be communicated
and will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of Section 21 of
the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in
connection with the offer of the Securities in circumstances in which
Section 21(1) of the FSMA does not apply to the Company; and (B) it has complied
and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom;

(vi) such Placement Agent understands that the Securities have not been and will
not be registered with the Registro Nacional de Valores (National Registry of
Securities) maintained by the CNBV under the Securities and Exchange Law of
Mexico (Ley del Mercado de Valores), and represents that it has not offered or
sold, and agrees not to offer or sell, directly or indirectly, any Securities in
Mexico or for the account of any resident thereof, except pursuant to a private
placement exemption set forth under Article 8 of the Securities and Exchange Law
of Mexico and in compliance with applicable provisions of Mexican Law or in
accordance with an authorization to that effect; and

(vii) such Placement Agent agrees that, at or prior to confirmation of sales of
the Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the “Securities Act”) and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meaning given to them by
Regulation S.”

 

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Terms used in this Section 7(b) have the meanings given to them by Regulation S.

8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Placement Agent, each person, if any, who controls any Placement
Agent within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Placement Agent within
the meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Time of Sale
Memorandum or either Memorandum or any amendments or supplements thereto, or any
of the supplemental marketing materials listed on Schedule III hereto, if any,
or caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Placement Agent furnished to the Company in writing by such Placement Agent
through you expressly for use therein, it being understood and agreed that the
only such information furnished by or on behalf of any Placement Agent consists
of the information described as such in Section 8(b) hereof.

(b) Each Placement Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Placement Agent, but only with
reference to information relating to such Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use in the
Time of Sale Memorandum or either Memorandum or any amendments or supplements
thereto. The Company acknowledges that (i) the last full paragraph of the cover
page of each Memorandum, (ii) the second sentence of the second full paragraph
under the caption “Private Placement” in each Memorandum, (iii) the first
sentence of the eighth full paragraph under the caption “Private

 

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Placement” in each Memorandum and (iv) the ninth full paragraph under the
caption “Private Placement” in each Memorandum constitute the only information
furnished in writing by or on behalf of the Placement Agents for inclusion in
the documents referred to in the foregoing indemnity.

(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, (iii) the indemnifying party has failed within
a reasonable time to retain counsel reasonably satisfactory to the indemnified
party or (iv) the indemnified party has reasonably concluded that there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative, in the case of parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such

 

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settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless (i) such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding and (ii) does not include any statements as to or any findings of
fault, culpability or failure to act by or on behalf of any indemnified party.

(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Placement Agents on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 8(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Company on the one hand and of the Placement Agents on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agents on the other hand in connection with the offering of
the Securities shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total discounts and commissions (after deducting
reimbursements for expenses incurred by the Company) received by the Placement
Agents, in each case as set forth in the Time of Sale Memorandum and the Final
Memorandum, bear to the aggregate offering price of the Securities. The relative
fault of the Company on the one hand and of the Placement Agents on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Placement Agents and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Placement Agents’ respective obligations to contribute pursuant to this
Section 8 are several in proportions to the respective principal amount of
Securities they have purchased hereunder, and not joint.

(e) The Company and the Placement Agents agree that it would not be just or
equitable if contribution pursuant to Section 8(d) were determined by pro rata
allocation (even if the Placement Agents were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the

 

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equitable considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no Placement
Agent shall be required to contribute any amount in excess of the discount and
commissions received by it in connection with the Securities distributed by it.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies, which may otherwise be available to any indemnified party at law or
in equity.

(f) The indemnity and contribution provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Placement Agent, any person controlling any Placement Agent or any
affiliate of any Placement Agent or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.

9. Termination. The Placement Agents may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq Global Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade, or Bolsa Mexicana de Valores, S.A. de C.V., (ii) trading of any
securities of the Company or KCS shall have been suspended on any exchange or in
any over-the-counter market, (iii) a material disruption in securities
settlement, payment or clearance services in the United States or Mexico shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State or Mexican authorities or (v) there
shall have occurred any outbreak or escalation of hostilities, or any change in
financial markets, currency exchange rates or controls or any calamity or crisis
that, in your judgment, is material and adverse and which, singly or together
with any other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Securities on the terms and in the manner contemplated in the Time of Sale
Memorandum or the Final Memorandum.

 

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10. Effectiveness; Defaulting Placement Agents. (a) This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

(b) If, on the Closing Date, any one or more of the Placement Agents shall fail
or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Placement Agent or Placement Agents agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, the other Placement Agents shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Placement Agents, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Placement
Agent has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Placement Agent. If, on the
Closing Date any Placement Agent or Placement Agents shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements satisfactory to you
and the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Placement Agent or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Time of Sale Memorandum or the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Placement Agent from liability in respect of any default
of such Placement Agent under this Agreement.

(c) If this Agreement shall be terminated by the Placement Agents, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Placement Agents or such Placement
Agents as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Placement Agents in connection
with this Agreement or the offering contemplated hereunder.

 

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11. Entire Agreement. This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by
this Agreement) that relate to the offering of the Securities, represents the
entire agreement between the Company and the Placement Agents with respect to
the preparation of the Time of Sale Memorandum, either Memorandum, the conduct
of the offering, and the purchase and sale of the Securities.

12. No Fiduciary Duties. The Company acknowledges and agrees that the Placement
Agents are acting solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the Offer (including in connection
with determining the terms of the Offer) and not as financial advisors or as
fiduciaries to, or agents of, the Company or any other person. Additionally, the
Placement Agents are not advising the Company or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Company shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation and appraisal
of the transactions contemplated hereby, and the Placement Agents shall have no
responsibility or liability to the Company with respect thereto. Any review by
the Placement Agents of the Company, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the
benefit of the Placement Agents and shall not be on behalf of the Company.

13. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

14. Consent to Jurisdiction. Appointment of Agent to Accept Service of Process.

(a) Each of the Placement Agents and the Company irrevocably consents and agrees
that any legal action, suit or proceeding against it with respect to is
obligations, liabilities or any other matter arising out of or based on this
Agreement may be brought in any United States federal or state court in the
State of New York, County of New York, Borough of Manhattan. Each of the parties
irrevocably and unconditionally waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of venue of any of
the aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement, the Registration Rights Agreement, the Indenture and the
Securities brought in the federal courts located in the City of New York or the
courts of the State of New York located in the County of New York and hereby
further irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum, hereby waiving the venue of any other court to which they may have a
right based on their domicile or otherwise.

 

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(b) The Company designates, appoints, and empowers CT Corporation, with offices
currently at 111 Eight Avenue, New York, New York 10011, as its designee,
appointee and agent to receive and forward for and on its behalf, service of any
and all legal process, summons, notices and documents that may be served in any
action, suit or proceeding brought against any of the liabilities or any other
matter arising out of or in connection with this Agreement, the Registration
Rights Agreement, the Indenture and the Securities that may be on such designee,
appointee and agent in accordance with legal procedures prescribed for such
courts. If for any reason such designee, appointee and agent hereunder shall
cease to be available to act as such, the Company agrees to designate a new
designee, appointee and agent in The City of New York on the terms and for the
purposes of this Section 14 reasonably satisfactory to the Placement Agents. The
Company further hereby irrevocably consents and agrees to the service of any
legal process, summons, notices and documents in any such action, suit or
proceeding against the Company by serving a copy thereof upon the relevant agent
of service of process referred to in this Section 14 (whether or not the
appointment of such agent shall for any reason prove to be ineffective or such
agent shall accept or acknowledge such service). The Company agrees that the
failure of any such designee, appointee and agent to give any notice of such
service to them shall not impair or affect in any way the validity of such
service or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the Placement
Agents to serve any such legal process, summons, notices and documents in any
other manner permitted by applicable law or to obtain jurisdiction over the
Company or bring actions, suits or proceedings against them in such other
jurisdictions, and in such manner, as may be permitted by applicable law.

15. Judgment Currency. If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder into any currency other than U.S.
dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Placement Agents could purchase
U.S. dollars with such other currency in The City of New York on the business
day preceding that on which final judgment is given. The obligations of the
Company in respect of any sum due from it to any Placement Agent shall,
notwithstanding any judgment in any currency other than U.S. dollars, not be
discharged until the first business day, following receipt by such Placement
Agent of any sum adjudged to be so due in such other currency, on which (and
only to the extent that) such Placement Agent may in accordance with normal
banking procedures purchase U.S. dollars with such other currency; if the U.S.
dollars so purchased are less than the sum originally due to such Placement
Agent hereunder, the Company agrees, as a separate obligation and
notwithstanding any

 

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such judgment, to indemnify such Placement Agent against such loss. If the U.S.
dollars so purchased are greater than the sum originally due to such Placement
Agent hereunder, such Placement Agent agrees to pay to the Company an amount
equal to the excess of the U.S. dollars so purchased over the sum originally due
to such Placement Agent hereunder.

16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

17. Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

18. Notices. All communications hereunder shall be in writing and effective only
upon receipt and if to the Placement Agents shall be delivered, mailed or sent
to Merrill Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New
York, New York 10036, Attention: High Yield Capital Markets Syndicate Desk; and
if to the Company shall be delivered, mailed or sent to Kansas City Southern de
México, S.A. de C.V., Montes Urales No. 625, Col. Lomas de Chapultepec,
Delegación Miguel Hidalgo, 11000, México D.F., Attention: Chief Financial
Officer.

 

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Very truly yours,

KANSAS CITY SOUTHERN de MÉXICO,
S.A. de C.V.

By:  

/s/ Paul J. Weyandt

  Name: Paul J. Weyandt   Title: Treasurer and Attorney-in-fact

 

Accepted as of the date hereof

 

Merrill Lynch, Pierce, Fenner & Smith

  Incorporated   Acting severally on behalf of themselves and the several
Placement Agents named in Schedule I hereto.

 

By:   Merrill Lynch, Pierce, Fenner & Smith
                      Incorporated By:  

/s/ Pei-Tse Wu

  Name: Pei-Tse Wu   Title: Managing Director

[PLACEMENT AGREEMENT]

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SCHEDULE I

 

Placement Agent

   Principal amount of
Securities to be Purchased  

Merrill Lynch, Pierce, Fenner & Smith

                       Incorporated

   $ 92,500,000   

J.P. Morgan Securities LLC

     46,250,000            

Scotia Capital (USA) Inc.

     24,050,000            

BBVA Securities Inc.

     7,400,000            

Citigroup Global Markets Inc

     7,400,000            

UBS Securities LLC

     7,400,000            

Total:

   $ 185,000,000            

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SCHEDULE II

 

PRICING SUPPLEMENT       STRICTLY CONFIDENTIAL    $185,000,000       LOGO
[g131716ex10_1pg032.jpg]   

KANSAS CITY SOUTHERN DE MÉXICO, S.A. DE C.V.

6.625% Senior Notes due 2020

December 14, 2010

 

This Pricing Supplement is qualified in its entirety by reference to the
Preliminary Offering Memorandum dated December 14, 2010 (the “Preliminary
Offering Memorandum”). The information in this Pricing Supplement supplements
the Preliminary Offering Memorandum and supersedes the information in the
Preliminary Offering Memorandum to the extent this information is inconsistent
with the information in the Preliminary Offering Memorandum. Capitalized terms
used in this Pricing Supplement but not defined have the meanings given to them
in the Preliminary Offering Memorandum.

The Notes (as defined below) have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), and may not be offered or sold,
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Accordingly, the Notes are
being offered and sold (1) only to “qualified institutional buyers” (as defined
in Rule 144A under the Securities Act) and (2) outside the United States to
non-U.S. persons in compliance with Regulation S under the Securities Act.

The Notes have not been and will not be registered with the Mexican National
Securities Registry (Registro Nacional de Valores) maintained by the Mexican
National Banking and Securities Commission (Comisión Nacional Bancaria y de
Valores) and may not be offered or sold publicly, or otherwise be the subject of
broker activities in Mexico, except pursuant to a private placement exemption
set forth under Article 8 of the Mexican Securities Market Law (Ley del Mercado
de Valores).

 

Issuer:    Kansas City Southern de México, S.A. de C.V. Aggregate Principal
Amount:    $185,000,000 Title of Securities:    6.625% Senior Notes due 2020
(the “Notes”) Final Maturity Date:    December 15, 2020 Issue Price:    100.000%
plus accrued interest from December 20, 2010. Coupon    6.625% Yield to Maturity
   6.625% Gross Proceeds    $185,000,000 before placement agents’ discounts and
estimated offering expenses. Interest Payment Dates:    December 15 and June 15
Record Dates:    December 1 and June 1 First Interest Payment Date:    June 15,
2011

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Optional Redemption:  

On or after December 15, 2015, the Company may, at its option, redeem the Notes
in whole at any time or in part from time to time, upon not less than 30 nor
more than 60 days’ notice, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the 12-month
period commencing on December 15 of the year set forth below, plus, in each
case, accrued interest, liquidated damages, if any, and any Additional Amounts
to the date of redemption:

       

   

Year

  

Percentage

   

2015

     103.313%     

2016

     102.208%     

2017

     101.104%     

2018 and thereafter

     100.000%    Optional Redemption with Equity Proceeds:   At any time prior
to December 15, 2013, the Company may redeem up to 35% of the principal amount
of the Notes issued under the Indenture at a redemption price of 106.625% of
their principal amount, plus accrued interest and liquidated damages, if any,
and any Additional Amounts to the redemption date, with the Net Cash Proceeds of
one or more Equity Offerings by KCSM or KCS, to the extent the Net Cash Proceeds
thereof are contributed to KCSM or used to purchase Capital Stock (other than
Disqualified Stock) of KCSM from KCSM; provided, that: (1) at least 65% of the
original aggregate principal amount of Notes issued under the Indenture remains
outstanding after giving effect to any such redemption; and (2) the redemption
occurs within 90 days of the date of the closing of such Equity Offering and is
made in accordance with certain procedures set forth in the Indenture.
            Additional Optional Redemption:   At any time prior to December 15,
2015, the Company may redeem all or a part of the notes, upon not less than 30
nor more than 60 days’ prior notice mailed by first-class mail to each holder’s
registered address, at a redemption price equal to 100% of the principal amount
of notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest if any, to the date of redemption, subject to the rights of holders of
notes on the relevant record date to receive interest due on the relevant
interest payment date.           Upon completion of the registered exchange
offer as described under “Description of the Notes—Registered Exchange Offer;
Registration Rights,” the Company may also redeem any Notes which were not
exchanged in the registered exchange offer in an amount up to 2% of the original
aggregate principal amount of Notes issued at a redemption price of 100% of
their principal amount plus accrued interest, liquidated damages, if any, and
any Additional Amounts to the redemption date.           In addition, the
Company may, at its option, redeem the Notes, in whole but not in part, at any
time at a redemption price of 100% of their principal amount plus accrued
interest, liquidated damages, if any, and any Additional Amounts to the
redemption date if the Mexican withholding tax rate on payments of interest in
respect of the Notes is increased, as a result of a change in Mexican law, to a
rate in excess of 4.9%.       

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Placement Agents:

 

Merrill Lynch, Pierce, Fenner & Smith

                      Incorporated

J.P. Morgan Securities LLC

Scotia Capital (USA) Inc.

BBVA Securities Inc.

Citigroup Global Markets Inc.

UBS Securities LLC

Trade Date:   December 14, 2010 Settlement Date:   December 20, 2010 (T+4
business days) 144A CUSIP/ISIN Numbers:   485161 AJ2/US485161AJ23 Reg S
CUSIP/ISIN Numbers:   P6052A AE4 /USP6052AAE49

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SCHEDULE III

Supplemental Marketing Materials

Investor Presentation, dated December 14, 2010