EXHIBIT 10.1
EXECUTION COPY
 
US$111,000,000
CREDIT AGREEMENT
dated as of June 14, 2007
among
KANSAS CITY SOUTHERN DE MÉXICO, S.A. DE C.V.,
as Borrower,
ARRENDADORA KCSM, S.A. DE C.V.,
as Guarantor,
CERTAIN LENDERS,
and
BANK OF AMERICA, N.A.,
as Administrative Agent
 
BBVA SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookrunners
 

 

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

 

TABLE OF CONTENTS

              Page
ARTICLE I DEFINITIONS
    1  
 
       
Section 1.1 Certain Defined Terms
    1  
Section 1.2 Other Interpretive Provisions
    19  
Section 1.3 Exchange Rates; Currency Equivalents
    20  
 
       
ARTICLE II LOANS, ETC
    20  
 
       
Section 2.1 The Loans
    20  
Section 2.2 Notes
    20  
Section 2.3 Borrowings and Continuations
    21  
Section 2.4 Several Obligations; Remedies Independent
    21  
Section 2.5 Repayment
    21  
Section 2.6 Optional Prepayments
    22  
Section 2.7 Reduction of Tranche A Commitments
    22  
Section 2.8 Mandatory Prepayments
    22  
Section 2.9 Interest
    23  
Section 2.10 Computation of Interest
    23  
Section 2.11 Inability to Determine Interest Rate
    24  
Section 2.12 Fees
    24  
Section 2.13 Pro Rata Treatment and Payments
    25  
Section 2.14 Set-Off; Sharing of Payments, Etc
    26  
 
       
ARTICLE III YIELD PROTECTION, ETC
    27  
 
       
Section 3.1 Taxes
    27  
Section 3.2 Illegality
    29  
Section 3.3 Additional Costs
    29  
Section 3.4 Funding Losses
    30  
Section 3.5 Change of Lending Office
    30  
Section 3.6 Replacement of Lenders
    31  
 
       
ARTICLE IV CONDITIONS PRECEDENT
    32  
 
       
Section 4.1 Conditions to Initial Funding
    32  
Section 4.2 Conditions Precedent to Each Loan
    34  
Section 4.3 Satisfaction of Conditions Precedent
    34  
 
       
ARTICLE V REPRESENTATIONS AND WARRANTIES
    34  
 
       
Section 5.1 Status and Licensing
    35  
Section 5.2 Corporate Power and Authority; Enforceable Obligations
    35  
Section 5.3 Compliance with Law and Other Instruments
    35  
Section 5.4 Litigation and Environmental Matters
    36  
Section 5.5 Governmental Approvals
    36  
Section 5.6 Financial Information
    36  
Section 5.7 Taxes, Assessments and Fees
    36  
Section 5.8 Investment Company Act
    37  

Credit Agreement i

 

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

 

TABLE OF CONTENTS
(continued)

              Page
Section 5.9 Accuracy of Information
    37  
Section 5.10 Absence of Default
    37  
Section 5.11 Ranking; Recourse; Liens
    37  
Section 5.12 Withholding Tax
    37  
Section 5.13 Proper Form
    38  
Section 5.14 Choice of Law
    38  
Section 5.15 Immunity
    38  
Section 5.16 Status of Concession
    39  
Section 5.17 Property
    39  
Section 5.18 Subsidiaries
    39  
Section 5.19 Federal Regulations
    39  
Section 5.20 Labor Matters
    39  
Section 5.21 Existing Indebtedness
    39  
 
       
ARTICLE VI AFFIRMATIVE COVENANTS
    40  
 
       
Section 6.1 Senior Obligations
    40  
Section 6.2 Reporting Requirements
    40  
Section 6.3 Use of Proceeds
    42  
Section 6.4 Conduct of Business and Maintenance of Existence
    42  
Section 6.5 Maintenance of Government Approvals
    42  
Section 6.6 Compliance with Laws and Other Instruments
    42  
Section 6.7 Maintenance of Property; Insurance
    43  
Section 6.8 Maintenance of Books and Records and Inspection Rights
    43  
Section 6.9 Payment of Obligations
    43  
Section 6.10 Environmental Laws
    43  
Section 6.11 Additional Guarantors
    44  
 
       
ARTICLE VII NEGATIVE COVENANTS
    44  
 
       
Section 7.1 Financial Covenants
    44  
Section 7.2 Margin Regulations
    44  
Section 7.3 Limitation on Restricted Payments
    45  
Section 7.4 Limitation on Investments
    45  
Section 7.5 Optional Payments and Modifications of Certain Debt Instruments
    45  
Section 7.6 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries
    46  
Section 7.7 Limitation on Transactions with Affiliates
    46  
Section 7.8 Limitation on Liens
    47  
Section 7.9 Limitation on Indebtedness
    47  
Section 7.10 Limitation on Sale-Leaseback Transactions
    49  
Section 7.11 Limitation on Asset Sales
    49  
Section 7.12 Consolidation, Merger and Sale of Assets
    50  
Section 7.13 Lines of Business
    50  
 
       
ARTICLE VIII EVENTS OF DEFAULT
    50  

Credit Agreement ii

 

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

 

TABLE OF CONTENTS
(continued)

              Page
Section 8.1 Events of Default
    50  
Section 8.2 Remedies
    52  
 
       
ARTICLE IX GUARANTEE
    53  
 
       
Section 9.1 Guarantees
    53  
Section 9.2 Guarantees Unconditional
    53  
Section 9.3 Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances
    54  
Section 9.4 Waiver by the Guarantors
    54  
Section 9.5 Subrogation
    55  
Section 9.6 Stay of Acceleration
    55  
 
       
ARTICLE X THE ADMINISTRATIVE AGENT
    55  
 
       
Section 10.1 Appointment and Authority
    55  
Section 10.2 Rights as a Lender
    55  
Section 10.3 Exculpatory Provisions
    55  
Section 10.4 Reliance by Administrative Agent
    56  
Section 10.5 Delegation of Duties
    56  
Section 10.6 Resignation of Administrative Agent
    57  
Section 10.7 Non-Reliance on Administrative Agent and Other Lenders
    57  
Section 10.8 No Other Duties, Etc
    58  
Section 10.9 Administrative Agent May File Proofs of Claim
    58  
 
       
ARTICLE XI MISCELLANEOUS
    58  
 
       
Section 11.1 Financial Data
    58  
Section 11.2 Expenses; Indemnity; Damage Waiver
    58  
Section 11.3 Amendments and Waivers, Etc
    60  
Section 11.4 Governing Law
    61  
Section 11.5 Notices; Effectiveness; Electronic Communication
    61  
Section 11.6 Table of Contents; Headings
    63  
Section 11.7 Survival
    63  
Section 11.8 Successors and Assigns
    64  
Section 11.9 Interest Rate Limitation
    66  
Section 11.10 Submission to Jurisdiction; Venue; Service; Waiver of Jury Trial
    66  
Section 11.11 Judgment Currency
    68  
Section 11.12 Execution in Counterparts
    68  
Section 11.13 Waiver of Immunities
    68  
Section 11.14 Severability
    69  
Section 11.15 Treatment of Certain Information; Confidentiality
    69  
Section 11.16 No Waiver; Remedies
    69  
Section 11.17 Entire Agreement
    70  
Section 11.18 USA PATRIOT Act
    70  

Credit Agreement iii

 

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

 

     
Annex 1
  Commitments
 
   
Schedule 1.1
  Specified Deferred Payment Obligations
Schedule 5.11(b)
  Existing Liens
Schedule 5.17(c)
  Insurance Coverage
Schedule 5.18
  Subsidiaries
Schedule 5.21
  Existing Indebtedness
Schedule 7.4
  Existing Investments
Schedule 7.6
  Existing Encumbrances or Restrictions
Schedule 11.5
  Administrative Agent’s Office; Addresses for Notices
 
   
Exhibit A
  Form of Note
Exhibit B
  Form of Opinion of New York Counsel to the Loan Parties
Exhibit C
  Form of Opinion of Mexican Counsel to the Loan Parties
Exhibit D
  Form of Notice of Borrowing/Continuation
Exhibit E
  Form of Assignment and Assumption
Exhibit F
  Form of Accession Agreement
Exhibit G
  Form of Compliance Certificate

Credit Agreement iv

 

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

 

CREDIT AGREEMENT
     This CREDIT AGREEMENT (this “Agreement”), is entered into as of June 14,
2007, among KANSAS CITY SOUTHERN DE MÉXICO, S.A. DE C.V., a corporation with
variable capital (sociedad anónima de capital variable) organized under the laws
of Mexico (the “Borrower”), ARRENDADORA KCSM, S.A. DE C.V., a corporation with
variable capital (sociedad anónima de capital variable) organized under the laws
of Mexico (“Arrendadora”), each of the lenders that is a signatory hereto under
the caption “LENDERS” on the signature pages hereto and each other Person that
becomes a “Lender” after the date hereof pursuant to Section 11.8(b), and BANK
OF AMERICA, N.A., as the administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).
RECITALS
     WHEREAS, the Borrower has requested that the Lenders make available to the
Borrower loans in an aggregate principal amount up to but not to exceed
US$111,000,000 to be disbursed in two tranches;
     WHEREAS, the Borrower shall use the proceeds of the Loans: (a) to pay all
amounts outstanding under the Existing Credit Agreement and related fees and
expenses, (b) to pay all amounts outstanding in respect of the Borrower’s 10
1/4% Senior Notes, (c) to pay all amounts outstanding under the Bridge Loan
Agreement, (d) to refinance a portion of the 12 1/2% Senior Notes or (v) for
general corporate purposes.
     WHEREAS, the Lenders are willing to make the loans hereunder to the
Borrower upon and subject to all of the terms and conditions hereinafter set
forth; and
     WHEREAS, in order to induce the Lenders to make the loans contemplated
herein, (a) Arrendadora has agreed to guaranty the Borrower’s obligations under
this Agreement and (b) the parties have agreed that the obligations of the
Borrower under this Agreement shall at all times be guaranteed by Subsidiaries
(as defined below) of the Borrower that represent, in the aggregate, at least
90% of the total assets of the Borrower and its Consolidated Subsidiaries (as
defined below), Consolidated EBITDA (as defined below) and Consolidated Net
Income (as defined below).
     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
     SECTION 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
     “10 1/4% Senior Notes” shall mean the 10 1/4% Senior Notes Due June 15,
2007 under the Indenture, dated as of June 16, 1997, between the Borrower, as
issuer and The Bank of New York, as trustee.
Credit Agreement 1

 

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

 

     “12 1/2% Senior Notes” shall mean the 12 1/2% Senior Notes Due June 15,
2012 under the Indenture, dated as of June 13, 2002, between the Borrower, as
issuer, and The Bank of New York, as trustee.
     “Accession Agreement” shall have the meaning set forth in Section 6.11.
     “Act” shall have the meaning set forth in Section 11.18.
     “Additional Amounts” shall have the meaning set forth in Section 3.1(a).
     “Additional Dividends” shall have the meaning set forth in Section 7.3(b).
     “Administration Fee Letter” shall have the meaning set forth in
Section 2.12(a).
     “Administrative Agent” shall have the meaning set forth in the introduction
hereto.
     “Administrative Agent’s Office” shall mean the Administrative Agent’s
address and, as appropriate, account as set forth on Schedule 11.5 or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
     “Administrative Questionnaire” shall mean an Administrative Questionnaire
in a form supplied by the Administrative Agent.
     “Affected Party” shall have the meaning set forth in Section 3.3(a).
     “Affiliate” shall mean, as applied to any Person, any other Person directly
or indirectly Controlling, Controlled by, or under direct or indirect common
Control with, such Person.
     “Agreement” shall have the meaning set forth in the introduction hereto.
     “Agreement Currency” shall have the meaning set forth in Section 11.11.
     “Applicable Law” shall mean, as to any Person, any law, treaty, statute,
rule, decree, order or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.
     “Applicable Margin” shall mean the percentages per annum set forth below
for Loans based upon the Consolidated Leverage Ratio as set forth in the most
recent certificate of a Responsible Officer of the Borrower delivered pursuant
to Section 6.2(d):
Credit Agreement 2

 

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

 

          Consolidated Leverage Ratio   Applicable Margin     Tranche A Loans  
Tranche B Loans Ratio is greater than
or equal to 3.50x   2.125%   2.125% Ratio is greater than or equal to
3.25x and less than 3.50x   1.875%   1.875% Ratio is greater than or equal to
3.00x and less than 3.25x   1.750%   1.750% Ratio is greater than or equal to
2.50x and less than 3.00x   1.625%   1.625% Ratio is less than 2.50x   1.375%  
1.375%

     Any increase or decrease in the Applicable Margin resulting from a change
in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a certificate of a Responsible
Officer of the Borrower (together with the accompanying financial statements)
mentioned herein is delivered pursuant to Section 6.2(d) (the “Adjustment Date”)
and shall remain in effect until the next change to be effected pursuant to this
clause; provided that if such certificate (together with the accompanying
financial statements) is not delivered when due in accordance with
Section 6.2(d), then, until the first Business Day following the date on which
such certificate (together with the accompanying financial statements) is
delivered, the Applicable Margin for each Tranche A Loan and Tranche B Loan
shall be the highest rate for each such Loan set forth in the table above. The
Applicable Margin in effect until the first Adjustment Date to occur after the
Initial Borrowing Date shall be (a) for Tranche A Loans, 1.750%, and (b) for the
Tranche B Loans, 1.750%.
     “Approved Fund” shall mean any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
     “Arrangement Fee Letter” shall have the meaning set forth in
Section 2.12(b).
     “Arrendadora” shall have the meaning set forth in the introduction hereto.
     “Asset Sale” shall mean, with respect to any Person, any sale, transfer or
other disposition (including by way of merger, consolidation or sale-leaseback
transaction) in one transaction or a series of related transactions of (a) all
or any of the Equity Interests of any Subsidiary of such Person, (b) all or
substantially all of the Property of an operating unit or business of such
Person or (c) any other Property of such Person.
Credit Agreement 3

 

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

 

     “Assignee Group” shall mean two or more Eligible Assignees that are
Affiliates of one another or two or more Approved Funds managed by the same
investment advisor.
     “Assignment and Assumption” means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 11.8(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.
     “Attributable Debt” shall mean, with respect to any Person in respect of a
sale-leaseback transaction, as at the time of determination, the present value
(discounted at the interest rate assumed in making calculations in accordance
with GAAP) of the total obligations of such Person, as lessee, for rental
payments during the remaining term of the lease included in such sale-leaseback
transaction (including any period for which such lease has been extended).
     “Bank of America” shall mean Bank of America, N.A, or any successor Person.
     “Base Rate” shall mean for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate.” Any change in such rate announced by
the Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.
     “Beneficiaries” shall mean the Lenders, the Administrative Agent, the Joint
Lead Arrangers and any other Person (other than a Loan Party, any Affiliate
thereof or a customer of a Loan Party), subject to Section 11.8(e), that has a
right to receive any payment from a Loan Party under the Loan Documents.
     “Borrower” shall have the meaning set forth in the introduction hereto.
     “Borrower Materials” shall have the meaning set forth in Section 6.2.
     “Borrowing Date” shall mean the date of the making of any Loan hereunder.
     “Bridge Loan Agreement” shall mean the Bridge Loan Agreement, dated as of
April 30, 2007, among the Borrower, Arrendadora, and certain lenders party
thereto.
     “Business Day” shall mean any day other than a Saturday or a Sunday or a
day on which banking institutions are authorized or required to close in New
York, New York, or in Mexico City, Mexico, and, with respect only to any
determination of Eurocurrency Rate, that is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
     “Capital Expenditures” shall mean, with respect to any Person, for any
period, the sum of, without duplication, (a) all expenditures made by such
Person during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment in the consolidated statements of cash
flows of such Person for such period plus (b) the aggregate amount of all
Capitalized Lease Obligations assumed or incurred by such Person during such
period.
Credit Agreement 4

 

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

 

     “Capitalized Lease” shall mean, as applied to any Person, any lease of any
Property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
     “Capitalized Lease Obligations” of any Person shall mean all rental
obligations in respect of Capitalized Leases, in each case taken at the amount
thereof accounted for as indebtedness in accordance with GAAP.
     “Change of Control” shall mean such time as:
     (a) KCS ceases to (i) be the ultimate “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act and including by reason of any change in the
ultimate “beneficial ownership” of the Equity Interests of the Borrower) of
Voting Stock representing more than 50.0% of the total voting power of the total
Voting Stock of the Borrower on a fully diluted basis or (ii) have the power to
direct or cause the direction of the management and policies of the Borrower; or
     (b) the Borrower ceases to (i) own at least 98% of the Voting Stock of
Arrendadora or (ii) have the power to direct or cause the direction of the
management and policies of Arrendadora, other than as a result of a merger of
Arrendadora into the Borrower as permitted under this Agreement.
     “Commitment Fee” shall have the meaning set forth in Section 2.12(c).
     “Commitment Fee Payment Date” shall mean the last Business Day of each
March, June, September and December.
     “Commitment Period” shall mean the Tranche A Commitment Period or the
Tranche B Commitment Period, as the context shall require.
     “Commitments” shall mean, collectively, the Tranche A Commitments and the
Tranche B Commitments.
     “Concession Title” shall mean the Borrower’s right, for a period of
30 years, to be the exclusive provider (subject to certain trackage rights) of
freight transportation services over the Northeast Rail Lines and for an
additional 20 years to be a non-exclusive provider of such services over the
Northeast 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.
     “Consolidated EBIT” shall mean, for any period, the Consolidated Net Income
of the Borrower and its Consolidated Subsidiaries for such period, increased by
interest expense, Debt Retirement Costs and provision for (i) taxes based on
income and (ii) asset taxes (impuesto al activo) in lieu of, or in the nature
of, income taxes, for such period, and without giving effect to (a) any
extraordinary gains or losses (or other gains or losses resulting from the sale
of Property or from other activities not relating to the normal business of such
Persons), (b) non-cash items relating to statutory profit sharing, in each case
as otherwise reflected in Consolidated Net
Credit Agreement 5

 

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

 

Income and (c) to the extent taken into account in Consolidated Net Income, any
amounts attributable to minority interests.
     “Consolidated EBITDA” shall mean, for any period, Consolidated EBIT
adjusted by adding thereto the amount of all amortization and depreciation for
such period, which in each case were deducted in arriving at Consolidated EBIT
for such period.
     “Consolidated Fixed Charge Coverage Ratio” shall mean, as of the last day
of any fiscal quarter of the Borrower, the ratio of (a) Consolidated EBITDA for
the preceding four fiscal quarters ending on such day to (b) Consolidated Fixed
Charges for such period.
     “Consolidated Fixed Charges” shall mean, for any period, the sum, without
duplication, of (a) Consolidated Interest Expense for such period, (b) the
amount of all Capital Expenditures made by the Borrower and its Consolidated
Subsidiaries during such period, (c) all cash payments in respect of income or
asset taxes made by the Borrower and its Consolidated Subsidiaries during such
period (net of any cash refunds actually received during such period), (d) the
scheduled principal amount of all amortization payments on all Consolidated
Indebtedness (including without limitation the principal component of all
Capitalized Lease Obligations) for such period (it being understood that
(i) scheduled principal amortizations of Indebtedness that are refinanced, to
the extent permitted in this Agreement, to be payable on or after the Tranche B
Maturity Date shall not be included in the calculation of Consolidated Fixed
Charges and (ii) scheduled principal amortizations of the Bridge Loan Agreement,
the Existing Credit Agreement, the 12 1/2% Senior Notes and the 10 1/4% Senior
Notes that are refinanced by this Agreement shall not be included in the
calculation of Consolidated Fixed Charges), and (e) all cash dividend payments
made by the Borrower, (f) the amount of postings of cash collateral and other
payments under Swap Agreements of the Borrower and its Consolidated Subsidiaries
outstanding at the end of such period and (g) all cash payments in respect of
Debt Retirement Costs during such period.
     “Consolidated Indebtedness” shall mean, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness (including all
Capitalized Lease Obligations) of the Borrower and its Consolidated Subsidiaries
on a consolidated basis as determined in accordance with GAAP and without giving
effect to any revaluation to reflect the market value of such Indebtedness made
in accordance with purchase accounting principles under GAAP.
     “Consolidated Interest Coverage Ratio” shall mean, as of the last day of
any fiscal quarter of the Borrower, the ratio of (a) Consolidated EBITDA for the
preceding four fiscal quarters ending on such day to (b) Consolidated Interest
Expense for such period.
     “Consolidated Interest Expense” shall mean, for any period, the total
consolidated interest expense of the Borrower and its Consolidated Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) plus, without limitation, that portion of Capitalized Lease Obligations
of the Borrower and its Consolidated Subsidiaries representing the interest
factor for such period and, in any event, (i) including (without duplication)
withholding or similar taxes paid by the Borrower and its Consolidated
Subsidiaries arising from, or in connection with, the payment of interest and
fees and any other amounts related to interest expense, but (ii) excluding the
amortization of any deferred financing costs incurred in connection with this
Agreement and any other permitted Indebtedness.
Credit Agreement 6

 

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

 

     “Consolidated Leverage Ratio” shall mean, on any date, the ratio of
(a) Consolidated Indebtedness on such date to (b) Consolidated EBITDA for the
period of four fiscal quarters most recently ended.
     “Consolidated Net Income” shall mean, for any period, the consolidated net
after tax income of the Borrower and its Consolidated Subsidiaries, determined
in accordance with GAAP.
     “Consolidated Subsidiaries” shall mean, as to any Person, all Subsidiaries
of such Person which are consolidated with such Person for financial reporting
purposes in accordance with GAAP.
     “Control” shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
     “Debt Retirement Costs” shall mean premiums, fees and expenses related to
the extinguishment or refinancing of Indebtedness including the write-off of
unamortized (a) deferred financing costs or related issuance premiums or
discounts and (b) purchase accounting fair value effect associated with such
Indebtedness.
     “Debt Service” shall mean, for any period, the sum, without duplication, of
(a) interest expense of the Borrower and its Consolidated Subsidiaries paid
during such period and (b) principal paid by the Borrower and its Consolidated
Subsidiaries during such period, in each case in respect of Indebtedness to
Persons other than Affiliates of the Borrower.
     “Default” shall mean any of the events specified in Section 8.1, whether or
not any requirement for the giving of notice or lapse of time or both has been
satisfied.
     “Default Rate” shall mean a rate per annum equal to 2.0% plus (a) in the
case of Loans, the Eurocurrency Rate for the relevant Interest Period (or, to
the extent that Section 2.11 is applicable, the Base Rate) plus the relevant
Applicable Margin or (b) in the case of fees or other amounts payable hereunder,
the Base Rate.
     “Defaulting Lender” shall mean any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or becomes the subject of a bankruptcy or insolvency proceeding.
     “Dividend Accrual Termination Date” shall have the meaning set forth in
Section 7.3(b).
     “Dollar Equivalent” shall mean with respect to an amount of Pesos on any
date, the Dollar amount which would result from the conversion of such Peso
amount into Dollars on such date, as reasonably determined by the Administrative
Agent using the Exchange Rate as of the close of business for such date.
Credit Agreement 7

 

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

 

     “Dollars” and “US$” shall mean the lawful currency of the United States of
America.
     “Effective Date” shall mean the date on which the Administrative Agent
shall have received counterparts of this Agreement executed by all parties
hereto.
     “Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and (ii) unless an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
“Eligible Assignee” shall not include a Loan Party or any of the Loan Parties’
Affiliates or Subsidiaries; provided, further, that, unless an Event of Default
has occurred and is continuing, an “Eligible Assignee” shall be (A) a Mexican
Financial Institution or (B) a non-Mexican Person that is registered with
Hacienda for purposes of Article 195(I) or Article 196(II) of the Mexican Income
Tax Law (Ley del Impuesto Sobre la Renta) or any successor provision thereof
and, in the case of a non-Mexican Person that is registered with Hacienda for
purposes of Article 195(I), is a resident of (or has its principal office, if
acting through a branch or an agency, in) a country that has entered into a
treaty for the avoidance of double taxation with Mexico, which treaty is in
effect.
     “Environmental Laws” shall mean any and all federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, technical standards (normas técnicas), requirements of any Governmental
Authority or other Applicable Law regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or at any time hereafter in effect.
     “Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
     “Equity Interests” shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
     “Eurocurrency Liabilities” shall mean, with respect to any Lender, the full
reserve requirement percentage imposed in respect of “Eurocurrency Liabilities,”
as such term is defined in Regulation D (or any successor provision) (including
any marginal, emergency, supplemental, special or other reserves) of the Board
of Governors of the Federal Reserve System, that such Lender in its sole
discretion determines to be applicable to such Lender for each day during an
Interest Period.
     “Eurocurrency Rate” shall mean, for any Interest Period with respect to a
Loan, the rate per annum equal to the British Bankers Association LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London
Credit Agreement 8

 

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

 

time, two Business Days prior to the commencement of such Interest Period, for
deposits in Dollars (for delivery on the first day of such Interest Period) with
a term equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the “Eurocurrency Rate” for such Interest Period shall
be the rate per annum determined by the Administrative Agent to be the rate at
which deposits in Dollars for delivery on the first day of such Interest Period
in immediately available funds in the approximate amount of the Loan being made
or continued and with a term equivalent to such Interest Period would be offered
by Bank of America’s London Branch (or other Bank of America branch or
Affiliate) to major banks in the London or other offshore interbank market for
such currency at their request at approximately 11:00 a.m. (London Time) two
Business Days prior to the commencement of such Interest Period.
     “Event of Default” shall have the meaning set forth in Section 8.1.
     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
     “Exchange Rate” for a currency shall mean the rate determined by the
Administrative Agent to be the rate quoted by the Administrative Agent as the
spot rate for the purchase by the Administrative Agent of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Administrative
Agent may obtain such spot rate from another financial institution designated by
the Administrative Agent if it does not have as of the date of determination a
spot buying rate for any such currency.
     “Excluded Taxes” shall have the meaning set forth in Section 3.1(a).
     “Existing Credit Agreement” shall mean the Credit Agreement, dated as of
October 24, 2005, among the Borrower, Arrendadora, certain lenders party
thereto, Bank of America, N.A., as administrative agent, and BBVA Bancomer,
S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, as
collateral agent, as amended.
     “Federal Funds Rate” shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary,
to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on
such transactions as determined by the Administrative Agent.
     “Fee Letters” shall mean the Arrangement Fee Letter and the Administration
Fee Letter.
     “Financial Statements” shall have the meaning set forth in Section 5.6(a).
     “Fund” shall mean any Person (other than a natural person) that is (or will
be) employed in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of business.
Credit Agreement 9

 

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

 

     “GAAP” shall mean the generally accepted accounting principles as in effect
from time to time in the United States of America.
     “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.
     “Guarantee” shall mean any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing (whether pursuant to a guaranty, a
fianza civil, an aval or otherwise) any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm’s length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for purposes of
assuring in any other manner the holder of such Indebtedness of the payment
thereof or to protect such holder against loss in respect thereof (in whole or
in part); provided that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business or obligations arising,
in the ordinary course of business, from contracting for interline railroad
services. The term “Guarantee” used as a verb has a corresponding meaning.
     “Guaranteed Obligations” shall have the meaning set forth in
Section 9.1(a).
     “Guarantors” shall mean Arrendadora and such other Subsidiaries as may from
time to time accede to this Agreement as Guarantors pursuant to Section 6.11.
     “Hacienda” shall mean the Secretaría de Hacienda y Crédito Público
(Ministry of Finance and Public Credit) of Mexico.
     “Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
     “Indebtedness” shall mean, with respect to any Person at any date of
determination (without duplication):
     (a) all indebtedness of such Person for borrowed money;
     (b) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
     (c) all obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit, financial guaranty insurance policies or similar
instruments;
Credit Agreement 10

 

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

 

     (d) all obligations of such Person for the deferred purchase price of
Property or services (other than current trade payables incurred in the ordinary
course of such Person’s business and other than the Specified Deferred Payment
Obligations);
     (e) all obligations of such Person as lessee under Capitalized Leases (but
not operating leases);
     (f) all Guarantees of such Person in respect of obligations of the kind
referred to in clauses (a) through (e) and (h) of this definition;
     (g) all Indebtedness of other Persons secured by a Lien on any Property of
such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness shall be the lesser of (i) the
fair market value of such Property at such date of determination and (ii) the
amount of such Indebtedness; and
     (h) to the extent not otherwise included in this definition, net
obligations to make payments under Swap Agreements.
     The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation; provided that,
in the case of clause (h) above, the amount of Indebtedness shall be the
mark-to-market amount of such obligations at such date.
     “Indemnitee” shall have the meaning set forth in Section 11.2(b).
     “Information” shall have the meaning set forth in Section 11.15.
     “Initial Borrowing Date” shall mean the date of the making of the initial
Loans under this Agreement, which shall be the date specified by the Borrower in
its initial Notice of Borrowing/Continuation as the date of borrowing of the
initial Loans, subject to satisfaction of the conditions set forth herein.
     “Interest Payment Date” shall mean, (a) as to any Loan having an Interest
Period of three months or less, the last day of such Interest Period, (b) as to
any Loan having an Interest Period longer than three months, each day that is
three months, or a whole multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period, and (c) as to any Loan being
repaid or prepaid on any date, the date of any such repayment or prepayment.
     “Interest Period” shall mean, with respect to any Loans, (a) initially the
period commencing on and including the Borrowing Date with respect to such Loan
and ending on but excluding the numerically corresponding day in the calendar
month one, two, three or six months thereafter, as selected by the Borrower in
its Notice of Borrowing/Continuation for such Loans, and (b) thereafter, each
period commencing on and including the last day of the immediately preceding
Interest Period and ending on but excluding the date one, two, three or six
months thereafter, as selected by the Borrower in its Notice of
Borrowing/Continuation in accordance with Section 2.3 (it being understood that,
if such notice is not received by the Administrative Agent in accordance with
this clause (b), the Interest Period for any Loans will have an Interest Period
for such Loans of one month); provided that (i) if any Interest Period would
otherwise end
Credit Agreement 11

 

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

 

on a day which is not a Business Day, such Interest Period shall be extended to
the immediately succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding Business Day,
(ii) if any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar month that
would be the end of such Interest Period and (iii) if any Interest Period for
any Loans would otherwise (but for this clause (iii)) extend beyond the Tranche
A Maturity Date or the Tranche B Maturity Date, as the case may be, then such
Interest Period shall end on the Tranche A Maturity Date or the Tranche B
Maturity Date, as the case may be.
     “Investment” shall mean any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase of any Equity
Interest, bonds, notes, debentures or other debt securities or any Property
constituting a business unit of, or any other investment in, any Person.
     “Joint Lead Arrangers” shall mean, collectively, BBVA Securities Inc. and
Banc of America Securities LLC, or any respective successor Person.
     “KCS” shall mean Kansas City Southern, a Delaware corporation, or any
successor Person.
     “Lenders” shall mean, collectively, Lenders that have made Tranche A Loans
or Tranche B Loans or that have outstanding Tranche A Commitments or Tranche B
Commitments, and any successor or assigns thereto pursuant to Section 11.8.
     “Lending Office” shall mean, with respect to any Lender, (a) initially, the
office of such Lender designated below its signature and (b) thereafter, such
other office of such Lender (or a branch thereof) as such Lender may, with the
consent of the Administrative Agent, designate as the office through which it
will perform its obligations under this Agreement.
     “Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security trust (fideicomiso de garantía), encumbrance, lien
(statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, or any other contractual or
statutory arrangement or provision having substantially the same economic,
financial or operational effect as any of the foregoing), including, without
limitation, any device (including, without limitation, a foreign trust or joint
venture) for the purpose of setting aside funds for facilitating payments to any
person or group of persons.
     “Loan Documents” shall mean, collectively, this Agreement, the Notes, the
Fee Letters, each Accession Agreement, the Commitment Letter dated as of
April 23, 2007, among the Borrower, the Joint Lead Arrangers and the
Administrative Agent, and any other agreements, documents and instruments
executed and delivered in connection with the transactions contemplated hereby
and thereby.
     “Loan Parties” shall mean, collectively, the Borrower, Arrendadora and each
of the other Guarantors existing from time to time.
Credit Agreement 12

 

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

 

     “Loans” shall mean, collectively, the Tranche A Loans and the Tranche B
Loans.
     “Majority Lenders” shall mean, on any date, Lenders holding more than 50%
of the sum of (a) all undrawn Commitments on such date and (b) all Loans
outstanding on such date.
     “Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, Property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
     “Maximum Rate” shall have the meaning set forth in Section 11.9.
     “Mexican Financial Institution” shall mean an institución de banca múltiple
or an institución de banca de desarrollo organized or created, as appropriate,
and existing pursuant to and in accordance with the laws of Mexico and
authorized to engage in the business of banking by Hacienda.
     “Mexico” shall mean the Estados Unidos Mexicanos (United Mexican States).
     “Mexrail” shall mean Mexrail, Inc., a Delaware corporation, or any
successor Person.
     “Moody’s” shall mean Moody’s Investors Service, Inc. and any successor
Person.
     “Net Cash Proceeds” shall mean, with respect to any event, (a) the
proceeds, in the form of cash or cash equivalents, received in respect of such
event, including (i) any cash or cash equivalents received in respect of
non-cash proceeds, but only as and when received and any amount eliminated from
any reserve referred to in clause (iv) below but only as and when eliminated,
(ii) in the case of a casualty, insurance proceeds and (iii) in the case of a
condemnation or similar event, condemnation awards and similar payments, net of
(b) the sum of (i) all reasonable fees and out-of-pocket expenses (including
fees and expenses of counsel and investment bankers) paid by the Borrower and
its Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of an Asset Sale (or a casualty or other damage or
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and its Subsidiaries as a result of such event to repay
Indebtedness (other than Loans hereunder) secured by such Property or otherwise
subject to mandatory prepayment as a result of such event, (iii) the amount of
all taxes paid by the Borrower and its Subsidiaries, and (iv) the amount of any
reserves established by the Borrower and its Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by the
chief financial officer of the Borrower).
     “New Equipment” shall mean locomotives, rolling stock, containers, chassis
and work equipment (used by a Loan Party or one of its Consolidated Subsidiaries
in its railroad business or the Borrower’s railroad business, including, but not
limited to, anchor spreaders, ballast regulators, high-rail vehicles, rail
lifters, spike drivers and pullers, tampers, and tie inserters and removers), in
each case acquired after the Effective Date.
     “New Indebtedness” shall have the meaning set forth in Section 7.9(h).
Credit Agreement 13

 

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

 

     “Non-Excluded Taxes” shall have the meaning set forth in Section 3.1(a).
     “Northeast Rail Lines” shall mean that portion of the Mexican Railroad
system that is the subject of the Concession Title.
     “Notes” shall have the meaning set forth in Section 2.2.
     “Notice of Borrowing/Continuation” shall have the meaning set forth in
Section 2.3 and shall be substantially in the form of Exhibit D.
     “Obligation Termination Date” shall have the meaning set forth in
Section 2.10(c).
     “Obligations” shall mean all of the obligations and liabilities of the
Borrower to the Lenders and the Administrative Agent under or in connection with
this Agreement and the other Loan Documents (as any of the foregoing may from
time to time be respectively amended, modified, substituted, extended or
renewed), direct or indirect, absolute or contingent, due or to become due, now
or hereafter existing.
     “Other Currency” shall have the meaning set forth in Section 11.11.
     “Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
     “Overnight Rate” shall mean, for any day, the greater of (a) the Federal
Funds Rate and (b) an overnight rate determined by the Administrative Agent, in
accordance with banking industry rules on interbank compensation.
     “Participant” shall have the meaning set forth in Section 11.8(d).
     “Payee” shall have the meaning set forth in Section 3.1(a).
     “Permitted Liens” shall mean:
     (a) Liens for taxes, assessments, governmental charges or claims with
respect to amounts not yet delinquent or that are being contested in good faith
by appropriate legal proceedings promptly instituted and diligently conducted
and for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
     (b) statutory and common law Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other similar Liens arising in
the ordinary course of business and with respect to amounts not yet delinquent
or being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made;
     (c) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security;
Credit Agreement 14

 

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

 

     (d) Liens incurred or deposits made to secure the performance of tenders,
bids, leases, statutory or regulatory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);
     (e) easements, rights-of-way, municipal and zoning ordinances and similar
charges, encumbrances, title defects or other irregularities that do not
materially interfere with the ordinary course of the business;
     (f) licenses, leases or subleases granted to others that do not materially
interfere with the ordinary course of the business;
     (g) Liens arising from the rendering of a final judgment or order that does
not give rise to an Event of Default;
     (h) Liens securing reimbursement obligations with respect to commercial or
trade letters of credit that encumber documents and other Property relating to
such letters of credit and the products and proceeds thereof;
     (i) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the import of
goods; and
     (j) Liens encumbering customary initial deposits and margin deposits, and
other customary Liens on cash and cash deposits, in each case, securing
Indebtedness under Swap Agreements designed solely to protect from fluctuations
in interest rates, currencies or the price of commodities.
     “Person” shall mean any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization, Governmental Authority or other entity of whatever
nature.
     “Pesos” shall mean the lawful currency of Mexico.
     “Platform” shall have the meaning set forth in Section 6.2.
     “Prepayment Event” shall mean any of the following events: (a) any Asset
Sale described in Section 7.11(f) but only to the extent that, in any fiscal
year of the Borrower, the aggregate Net Cash Proceeds from all such Asset Sales
exceed US$10,000,000; (b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceedings of, any
Property of the Borrower or any Subsidiary, but only to the extent that, in any
fiscal year of the Borrower, the aggregate Net Cash Proceeds from any such
occurrence exceed US$10,000,000; or (c) the incurrence by the Borrower or any
Subsidiary of any Indebtedness permitted under Section 7.9(g).
     “Prepayment Threshold Amount” shall have the meaning set forth in
Section 2.8(a).
     “Process Agent” shall have the meaning set forth in Section 11.10(c).
Credit Agreement 15

 

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

 

     “Property” of any Person shall mean any property, asset, general intangible
or receivable, or interest therein, of such Person, including any accounts
receivable.
     “Public Lender” shall have the meaning set forth in Section 6.2.
     “Rate of Exchange” shall have the meaning set forth in Section 11.11.
     “Register” shall have the meaning set forth in Section 11.8(c).
     “Reinvestment Notice” shall mean a written notice executed by a Responsible
Officer of the Borrower stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of a Prepayment Event described in clause (a) or (b) of the definition thereof
to acquire or repair assets useful in the business of the Borrower or any of its
Subsidiaries.
     “Reinvestment Prepayment Date” shall mean with respect to any Prepayment
Event described in clause (a) or (b) of the definition thereof, the earlier of:
(a) the date occurring 180 days after such Prepayment Event and (b) the date on
which the Borrower or its relevant Subsidiary shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in the
Borrower’s (or such Subsidiary’s) business with all or any portion of the Net
Cash Proceeds of such Prepayment Event.
     “Related Parties” shall mean, with respect to any Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person’s Affiliates.
     “Responsible Officer” of a Person shall mean the Chairman, Chief Executive
Officer, Chief Financial Officer, President, any Executive Director, Director,
Vice President, Treasurer or Assistant Treasurer of such Person, in each case
authorized to the extent required by a board resolution or shareholder meeting;
provided that such officer is then authorized to bind such Person.
     “Restricted Payment” means any payment or distribution by a Person,
directly or indirectly, whether in cash or other Property or in obligations of
such Person: (a) of any dividends or other distribution on its Equity Interest
or any interest on capital, excluding any dividends, distributions or interest
paid solely in such Person’s common stock other than mandatorily redeemable
common stock, (b) in respect of the purchase, acquisition, redemption,
retirement, defeasance or other acquisition for value of any of its Equity
Interest or any warrants, rights or options to acquire such Equity Interest, now
or hereafter outstanding, (c) in respect of the return of any capital to its
stockholders as such, (d) in connection with any distribution or exchange of
Property to or with its stockholders as such in respect of its Equity Interest,
warrants, rights, options, obligations or securities or (e) in return of any
irrevocable equity contributions.
     “S&P” shall mean Standard & Poor’s Ratings Group, or any successor Person.
     “Senior Notes” shall mean, collectively: (a) the Borrower’s 10 1/4% Senior
Notes due 2007 issued pursuant to the indenture, dated as of June 16, 1997,
between the Borrower and The
Credit Agreement 16

 

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

 

Bank of New York, (b) the Borrower’s 12 1/2% Senior Notes due 2012 issued
pursuant to the indenture, dated as of June 13, 2002, between the Borrower and
The Bank of New York, (c) the Borrower’s 9 3/8% Senior Notes due 2012 issued
pursuant to the indenture, dated as of April 19, 2005, between the Borrower and
The Bank of Nova Scotia Trust Company of New York, (d) the Borrower’s 7 5/8%
Senior Notes due 2013 issued pursuant to the indenture, dated as of November 21,
2006, between the Borrower and U.S. Bank National Association and (e) the
Borrower’s 7 3/8% Senior Notes due 2014 issued pursuant to the indenture, dated
as of May 16, 2007, between the Borrower and U.S. Bank National Association.
     “Senior Notes Indentures” shall mean, collectively, the indentures referred
to in the definition of Senior Notes.
     “Specified Deferred Payment Obligations” mean all payment obligations as in
effect as of March 31, 2007 with respect to: (a) the locomotive maintenance
agreements with each of Alstom Transporte, S.A. de C.V. and GETS Locomotive
Services, S.A. de C.V., and (b) a track maintenance rehabilitation agreement
with Alstom Transporte, S.A. de C.V, which obligations in each case are accrued
and recorded on the Borrower’s balance sheet. Such payment obligations are set
forth on Schedule 1.1.
     “Subsidiary” shall mean, with respect to any Person, any corporation,
association or other entity of which more than 50% of the voting power of the
outstanding Voting Stock is owned, directly or indirectly, by such Person or by
such Person and/or one or more other Subsidiaries of such Person.
     “Swap Agreement” means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions.
     “Taxes” shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
     “Temporary Cash Investments” shall mean any of the following: (a) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof; (b) time deposit accounts, certificates of deposit and money
market deposits denominated and payable in Dollars maturing within 180 days of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of US$200,000,000 (or the foreign currency equivalent thereof) and has
outstanding long-term Dollar-denominated debt which is rated “A” (or such
similar equivalent rating) or higher by S&P or Moody’s; (c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) above entered into with a bank meeting the
qualifications described in clause (b) above; (d) commercial paper denominated
and payable in Dollars, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Borrower)
organized and in existence under the laws of the United States of America or any
state thereof with a rating at the time as of which any investment therein is
made of “P-1” (or higher)
Credit Agreement 17

 

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

 

according to Moody’s or “A-1” (or higher) according to S&P; (e) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least “A” by S&P or Moody’s; (f) Certificados de la
Tesorería de la Federación (Cetes) or Bonos de Desarrollo del Gobierno Federal
(Bondes) or any other debt securities issued by the government of Mexico
directly and maturing not more than 180 days after the acquisition thereof;
(g) Investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (a) through (f) above;
(h) demand deposit accounts with U.S. banks (or Mexican banks specified in
clause (i) of this definition) maintained in the ordinary course of business;
and (i) certificates of deposit, bank promissory notes and bankers’ acceptances
denominated in Pesos, maturing not more than 180 days after the acquisition
thereof and issued or guaranteed by any one of the five largest banks (based on
assets as of the immediately preceding December 31) organized under the laws of
Mexico and which are not under intervention by the Instituto para la Protección
del Ahorro Bancario or any successor thereto.
     “Tranche” shall mean the Tranche A Loans or the Tranche B Loans, as the
context shall require.
     “Tranche A Commitment” shall mean, as to any Lender, the commitment of such
Lender, on and subject to the terms and conditions of this Agreement, to make
Tranche A Loans to the Borrower pursuant to Section 2.1(a) in a principal amount
up to but not exceeding the amount specified opposite its name on Annex 1 under
“Tranche A Commitments.”
     “Tranche A Commitment Period” shall mean the period from and including the
Effective Date to the earlier of: (a) the date the Borrower specifies as the
date of termination of the Tranche A Commitments pursuant to Section 2.7, and
(b) the Business Day preceding the Tranche A Maturity Date.
     “Tranche A Lender” shall mean any Lender having a Tranche A Commitment.
     “Tranche A Loan” shall have the meaning set forth in Section 2.1(a).
     “Tranche A Maturity Date” shall mean December 30, 2011.
     “Tranche A Percentage” shall mean, as to any Tranche A Lender, the
percentage which such Tranche A Lender’s Tranche A Commitment is of the
aggregate amount of Tranche A Commitments of all Tranche A Lenders.
     “Tranche A Principal Payment Date” shall mean June 30, 2011, September 30,
2011 and the Tranche A Maturity Date; provided that if any such date is not a
Business Day, then such Tranche A Principal Payment Date shall be the next
Business Day unless such next Business Day would fall in another calendar month,
in which case such Tranche A Principal Payment Date shall be the immediately
preceding Business Day.
     “Tranche B Borrowing Date” shall have the meaning set forth in
Section 2.1(b).
     “Tranche B Commitment” shall mean, as to any Lender, the commitment of such
Lender, on and subject to the terms and conditions of this Agreement, to make
Tranche B Loans to the
Credit Agreement 18

 

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

 

Borrower pursuant to Section 2.1(c) in a principal amount up to but not
exceeding the amount specified opposite its name on Annex 1 under “Tranche B
Commitments.”
     “Tranche B Commitment Period” shall mean the period from and including the
Effective Date to the date ninety days following the Effective Date.
     “Tranche B Lender” shall mean any Lender with a Tranche B Commitment.
     “Tranche B Loan” shall have the meaning set forth in Section 2.1(b).
     “Tranche B Maturity Date” shall mean June 29, 2012.
     “Voting Stock” shall mean, with respect to any Person, capital stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
     “Wholly Owned” shall mean, with respect to any Person, a Subsidiary of such
Person all of the outstanding Equity Interests of which (other than any
director’s qualifying shares or any minimum statutorily required shares under
Mexican law) are owned by such Person or one or more Wholly Owned Subsidiaries
of such Person.
     SECTION 1.2 Other Interpretive Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
     (b) Unless otherwise expressly provided herein, references to agreements
(including this Agreement) and other documents shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
that such amendments and other modifications are not prohibited by this
Agreement or the Notes.
     (c) Accounting terms not defined herein shall have the meanings customarily
given in accordance with GAAP as in effect on the Effective Date. All ratios and
computations shall be computed in conformity with GAAP applied on a consistent
basis in Dollars.
     (d) The term “including” is not limiting and means “including without
limitation.”
     (e) The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Annex, Schedule
and Exhibit references are to this Agreement unless otherwise specified.
     (f) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
     (g) The terms “may” and “might” and similar terms used with respect to the
taking of an action by any Person shall reflect that such action is optional and
not required to be taken by such Person.
     (h) In this Agreement, in the computation of periods of time from a
specified date to a later specified date, unless otherwise specified, the word
“from” means “from and including” and
Credit Agreement 19

 

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

 

the words “to” and “until” each mean “to but excluding.” Periods of days
referred to in this Agreement shall be counted in calendar days unless Business
Days are expressly prescribed.
     (i) The Loan Documents are the result of negotiations among and have been
reviewed by counsel to each of the parties, and are the products of all such
parties. Accordingly, they shall not be construed against any Person merely
because of any such Person’s involvement in their preparation.
     SECTION 1.3 Exchange Rates; Currency Equivalents. Except for purposes of
financial statements delivered by Loan Parties hereunder or calculating
financial covenants hereunder or except as otherwise provided herein, the
applicable amount of any currency (other than Dollars) for purposes of the Loan
Documents shall be such Dollar Equivalent amount as so determined by the
Administrative Agent.
ARTICLE II
LOANS, ETC.
     SECTION 2.1 The Loans. (a) The Tranche A Loans. Subject to the terms and
conditions set forth herein, each Tranche A Lender severally agrees to make
revolving loans in Dollars (collectively, the “Tranche A Loans”) to the Borrower
from time to time during the Tranche A Commitment Period in such Tranche A
Lender’s Tranche A Percentage of such aggregate amounts as the Borrower may from
time to time request under the Tranche A Loans; provided that (i) the aggregate
amount of Tranche A Loans requested by the Borrower to be made on a Borrowing
Date must be in a minimum of US$5,000,000 and integral multiples of US$1,000,000
in excess thereof and (ii) no Tranche A Lender shall be permitted or required to
make any Tranche A Loan if after giving effect to such Tranche A Loans: (A) the
principal amount under all Tranche A Loans outstanding would exceed an amount
equal to (x) US$81,000,000 minus (y) the amount of all reductions of Tranche A
Commitments made in accordance with Section 2.7; (B) there would be more than
eight distinct Interest Periods applicable to Tranche A Loans; or (C) the
outstanding Tranche A Loans of such Tranche A Lender would exceed its Tranche A
Commitment. Subject to the foregoing and to Section 2.7, Tranche A Loans may be
repaid and reborrowed from time to time.
     (b) The Tranche B Loans. Subject to the terms and conditions set forth
herein, each Tranche B Lender severally agrees to make a term loan in Dollars
(its “Tranche B Loan”) to the Borrower on any one Business Day (the “Tranche B
Borrowing Date”) during the Tranche B Commitment Period in an aggregate
principal amount outstanding not to exceed the Tranche B Commitment of such
Tranche B Lender and, as to all Tranche B Lenders, in an aggregate principal
amount not to exceed US$30,000,000. The Tranche B Loans may not have at any time
more than three distinct Interest Periods. Any amounts not borrowed on the
Tranche B Borrowing Date with respect to the Tranche B Loans may not be borrowed
thereafter and any available amounts not requested to be borrowed under the
Tranche B Loans prior to the termination of the Tranche B Commitment Period
shall result in the pro rata irrevocable termination of an equivalent amount of
the Tranche B Commitments on the earlier of (i) the date on which the
Administrative Agent receives the Notice of Borrowing/Continuation with respect
to the Tranche B Loans or (ii) the termination of the Tranche B Commitment
Period.
     SECTION 2.2 Notes. The Loans made by each Lender shall be evidenced by
promissory notes which qualify as pagarés under Mexican law, issued by the
Borrower and guaranteed (por
Credit Agreement 20

 

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

 

aval) by the then existing Guarantors (subject to Section 6.11) substantially in
the form of Exhibit A (each a “Note”), delivered to the Administrative Agent on
behalf of each of the Lenders on or before the Initial Borrowing Date,
appropriately completed and representing the full amount of each such Lender’s
Tranche A Commitment or Tranche B Commitment, as the case may be; provided that
in case of conflict between the terms of this Agreement and any such Note
(including the amount of any principal or interest payable hereunder (whether
such payment is made on a scheduled payment date, at stated maturity, by
acceleration or otherwise), the manner of computation of any financial ratio
used in determining the Applicable Margin, or the definition of “Applicable
Margin”), the terms of this Agreement shall prevail and the Lenders shall not be
entitled to claim amounts due under the Notes in excess of amounts due under
this Agreement.
     SECTION 2.3 Borrowings and Continuations. The Borrower shall give the
Administrative Agent irrevocable notice of a request for the borrowing of any
Loans hereunder, or the continuation of Loans hereunder, substantially in the
form of Exhibit D (which notice must be received by the Administrative Agent
prior to 12:00 noon, New York City time, at least three Business Days prior to
the requested Borrowing Date for a Loan or, in the case of continuation of
Loans, at least three Business Days prior to the end of the then current
Interest Period for such Loans), specifying (a) the Tranche under which the
Loans are to be made or continued, (b) the aggregate amount of the Loans to be
borrowed or continued, (c) the requested Borrowing Date (or, as applicable, date
of continuation, which date shall be an Interest Payment Date) and (d) the
Interest Period applicable to each portion of such Loans (the “Notice of
Borrowing/Continuation”). Each borrowing or continuation of Loans shall be in a
principal amount of US$5,000,000 and integral multiples of US$1,000,000. Upon
receipt of a Notice of Borrowing/Continuation, the Administrative Agent shall
promptly notify each Lender that has a Commitment with respect to the relevant
Tranche of the amount of each Loan to be made or to be continued by such Lender
and the other relevant terms thereof. Not later than 1:00 p.m., New York City
time, on the relevant Borrowing Date each such Lender shall make available to
the Administrative Agent an amount in immediately available funds in Dollars
equal to the Loan to be made by such Lender, at the Administrative Agent’s
Office. Unless the Administrative Agent determines that any applicable condition
specified in Article IV has not been satisfied, the Administrative Agent shall
credit the amounts so received, in like funds, to the account of the Borrower
maintained with the Administrative Agent in New York City. In furtherance of the
foregoing, the Borrower hereby irrevocably authorizes the Administrative Agent
to apply such amounts as the Borrower shall direct in the Notice of
Borrowing/Continuation.
     SECTION 2.4 Several Obligations; Remedies Independent. The obligations of
the Lenders hereunder to make Loans and to make payments pursuant to
Section 11.2(c) are several and not joint. The failure of any Lender to make any
Loan or to make any payment under Section 11.2(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan or to make its payment under Section 11.2(c). The
amounts payable by the Borrower at any time hereunder and under the Notes to
each Lender shall be a separate and independent debt, and each Lender shall be
entitled to protect and enforce its individual rights arising out of this
Agreement and the Notes independently of any other Lender, and it shall not be
necessary for any other Lender or the Administrative Agent to consent to, or be
joined as an additional party in, any proceedings to recover the payment of any
overdue amounts.
Credit Agreement 21

 

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

 

     SECTION 2.5 Repayment. (a) Tranche A Loans. The Borrower agrees to pay to
the Administrative Agent for the account of each Tranche A Lender on each
Tranche A Principal Payment Date a principal amount of the Tranche A Loans
sufficient to reduce the outstanding Tranche A Loans to an amount at or below
the Tranche A Commitments in effect on such Tranche A Principal Payment Date,
after giving effect to the reductions thereof made pursuant to Section 2.7(c);
provided that on the Tranche A Maturity Date, the then aggregate unpaid
principal amount of the outstanding Tranche A Loans shall be paid in full.
     (b) Tranche B Loans. The Borrower agrees to pay to the Administrative Agent
for the account of each Tranche B Lender the full principal amount of the
Tranche B Loans on the Tranche B Maturity Date.
     SECTION 2.6 Optional Prepayments. (a) The Borrower may, without penalty or
premium but subject to the indemnity provisions of Section 3.4, prepay all or a
portion of the Loans, upon at least three Business Days’ prior irrevocable
notice to the Administrative Agent specifying the Loans to be prepaid, their
Tranche and their corresponding Borrowing Date and the date and amount of the
prepayment; provided that each partial prepayment of any Tranche shall be in the
minimum amount of US$5,000,000 and integral multiples of US$1,000,000 in excess
thereof.
     (b) Upon receipt of a notice of prepayment, the Administrative Agent shall
promptly give notice thereof to each Lender holding a Loan to be prepaid. If
such notice of prepayment is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to, and
any other amounts then due on, each such date on the amount prepaid. Each
optional prepayment shall be applied pro rata to the Loans made on the Borrowing
Date and under the Tranche being prepaid in accordance with Section 2.13(a) and
(with respect to Tranche A Loans) to the installments of principal pro rata
across the remaining scheduled amortizations. Any Tranche B Loan prepaid may not
be reborrowed.
     SECTION 2.7 Reduction of Tranche A Commitments. (a) The Borrower may from
time to time during the Tranche A Commitment Period, on at least three Business
Days’ prior written notice received by the Administrative Agent (which shall
promptly give notice thereof to each Tranche A Lender), permanently reduce the
amount of the Tranche A Commitments to an amount not less than the aggregate
principal amount of all outstanding Tranche A Loans (after giving effect to any
payment or prepayment thereof). Any such reduction of Tranche A Commitments
shall be in the minimum amount of US$5,000,000 and integral multiples of
US$1,000,000 in excess thereof. The Borrower may at any time on like notice
during the Tranche A Commitment Period terminate the Tranche A Commitments upon
payment in full of the entire principal amount then outstanding of the Tranche A
Loans, together with all accrued and unpaid interest thereon and all other
amounts payable by the Borrower in connection therewith.
     (b) All reductions of Tranche A Commitments shall be pro rata among the
Tranche A Lenders according to their Tranche A Percentages.
     (c) On (i) the first Tranche A Principal Payment Date, the Tranche A
Commitments shall be automatically reduced by US$27,000,000; (ii) the second
Tranche A Principal Payment Date, the Tranche A Commitments shall be
automatically reduced by US$27,000,000; and (iii)
Credit Agreement 22

 

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

 

the final Tranche A Principal Payment Date, the Tranche A Commitments shall be
automatically terminated.
     SECTION 2.8 Mandatory Prepayments. (a) If on any date the Borrower or any
its Subsidiaries shall receive Net Cash Proceeds from any Prepayment Event, the
Borrower shall promptly, and in any event within ten Business Days, make a
prepayment of the Loans in an aggregate amount equal to 100% of such Net Cash
Proceeds; provided that the Borrower shall not be required to prepay the Loans
as a result of a Prepayment Event under clause (a) or (b) of the definition
thereof if (and to the extent in excess of the Prepayment Threshold Amount), for
any fiscal year of the Borrower with respect to such Net Cash Proceeds received
by the Borrower or any of its Subsidiaries from any of the events described in
clause (a) or (b), respectively, of such definition that are in excess of
US$1,000,000 (with amounts under each such clause (a) and clause (b) being
separately calculated as in excess of US$1,000,000 (each, the “Prepayment
Threshold Amount”)), the Borrower shall have delivered to the Administrative
Agent a Reinvestment Notice prior to the date on which a prepayment would
otherwise be required under this Section 2.8(a). If the Borrower delivers a
Reinvestment Notice pursuant to the proviso to the immediately preceding
sentence, such Net Cash Proceeds may be applied for the purposes set forth in
such Reinvestment Notice and, if not so applied by the Reinvestment Prepayment
Date with respect to the relevant Prepayment Event, shall be applied on such
date to prepay the Loans in accordance with clause (c) below, until such
outstanding Loans are repaid in full.
     (b) Amounts to be applied in connection with prepayments made pursuant to
clause (a) shall be applied (i) first to the Tranche B Loans and (ii) second,
once all amounts due under the Tranche B Loans have been paid in full, to reduce
permanently the Tranche A Commitments pro rata. After giving effect to such
Commitment reductions, if the aggregate amount of Tranche A Loans outstanding
would exceed the then amount of the Tranche A Commitments, the Borrower shall
repay each such excess amount promptly (and, in any event, within ten Business
Days) after the event giving rise to such reduction of the Tranche A
Commitments.
     (c) Each prepayment of Loans under this Section 2.8 shall be made together
with accrued interest to the date of such prepayment on the amount so prepaid
and any other amounts due pursuant to Section 3.4. Any amount prepaid under this
Section 2.8 may not be reborrowed.
     SECTION 2.9 Interest. (a) Loans. The Borrower shall pay to the
Administrative Agent for the account of each Lender interest on the unpaid
principal amount of the Loans for each day during each Interest Period for each
such Loan until the date on which such Loans are paid in full at a rate per
annum equal to Eurocurrency Rate determined for such Interest Period plus the
relevant Applicable Margin.
     (b) If all or a portion of (i) the principal amount of any Loan, (ii) any
interest payable on the principal amount of any Loan (to the extent permitted by
Applicable Law) or (iii) any fee payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the Default Rate from
the date of such non-payment until paid in full and shall be payable on demand.
     (c) Except as otherwise provided in clause (b), interest shall be payable
in arrears on each Interest Payment Date for the applicable Loan.
Credit Agreement 23

 

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

 

     SECTION 2.10 Computation of Interest. (a) Interest in respect of the Loans
shall be calculated on the basis of a 360-day year for the actual days elapsed;
provided that if interest with respect to any Loan shall apply at the Base Rate
in accordance with this Agreement, such interest shall be calculated on the
basis of a 365/366-day year for the actual days elapsed. The Administrative
Agent shall, as soon as practicable, notify the Borrower and the Lenders of each
determination of Eurocurrency Rate; provided that any failure to do so shall not
relieve the Borrower of any liability hereunder.
     (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower or any Lender,
deliver to the Borrower or such Lender, as the case may be, a statement showing
the quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 2.9(a).
     (c) If, as a result of any restatement of or other adjustment to the
financial statements of the Borrower or for any other reason, the Borrower or
the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by
the Borrower as of any applicable date was inaccurate and (ii) a proper
calculation of the Consolidated Leverage Ratio would have resulted in higher
pricing for such period, the Borrower shall immediately and retroactively be
obligated to pay to the Administrative Agent for the account of the applicable
Lenders, promptly on demand by the Administrative Agent (or, after the
occurrence of an actual or deemed entry of an order for relief with respect to
the Borrower under the Bankruptcy Code of the United States or similar
proceeding under the Mexican Ley de Concursos Mercantiles, automatically and
without further action by the Administrative Agent or any Lender), an amount
equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such
period. This paragraph shall not limit the rights of the Administrative Agent or
any Lender, as the case may be, under Article VIII. The Borrower’s obligations
under this paragraph shall survive the termination of the Commitments and the
repayment of all other Obligations hereunder (such date, the “Obligation
Termination Date”) up to and including the date that is the earlier of (i) the
one year anniversary following the Obligation Termination Date and (ii) the date
following the Obligation Termination Date of the delivery of the consolidated
annual financial statements of the Borrower and its Consolidated Subsidiaries
included in the Borrower’s 10-K filing with the Securities and Exchange
Commission.
     SECTION 2.11 Inability to Determine Interest Rate. (a) In the event that
the Administrative Agent shall have reasonably determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the interbank eurodollar market, adequate means do not
exist for ascertaining the Eurocurrency Rate applicable pursuant to
Section 2.9(a), for any requested Interest Period, the Administrative Agent
shall forthwith give notice by facsimile of such determination to the Borrower
and each Lender at least one day prior to the last day of the current Interest
Period. Thereafter, the obligation of the Lenders to make or maintain
Eurocurrency Rate Loans shall be suspended until the Administrative Agent (upon
the instruction of the Majority Lenders) revokes such notice. Upon receipt of
such notice, the Borrower may revoke any pending request for the making or
continuation of a Loan or, failing that, such Loan requested or continued by the
Borrower will bear interest at the Base Rate.
Credit Agreement 24

 

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

 

     SECTION 2.12 Fees. (a) Administration Fee. The Borrower agrees to pay to
the Administrative Agent, for its account, all fees in such amount and in such
manner as shall have been agreed to by the Administrative Agent and the Borrower
in a separate fee letter (the “Administration Fee Letter”).
     (b) Arrangement Fees. The Borrower agrees to pay to Banc of America
Securities LLC and BBVA Securities Inc., for their account, all fees in such
amount and in such manner as shall have been agreed to among the Joint Lead
Arrangers and the Borrower in a separate fee letter dated as of April 23, 2007
(the “Arrangement Fee Letter”).
     (c) Commitment Fee. (i) The Borrower agrees to pay to the Administrative
Agent, for the account of each Tranche A Lender with a Tranche A Commitment, a
commitment fee on the daily average unused portion of such Lender’s Tranche A
Commitment for the period from and including the Effective Date to but excluding
the last day of the Tranche A Commitment Period applicable to the Tranche A
Commitments (the “Commitment Fee”) at a rate per annum determined based on the
aggregate level of disbursements under Tranche A Loans in accordance with the
table below:

      Disbursement Level of Tranche A Loans   Commitment Fee Rate Disbursement
level is greater than 37%   0.50% Disbursement level is greater than or equal to
12% and
less than or equal to 37%   0.75% Disbursement level is less than 12%   0.90%

     (ii) The Commitment Fee shall be payable in arrears on each Commitment Fee
Payment Date, for the period then ending for which such Commitment Fee shall not
have been theretofore paid. The Commitment Fee shall be computed for the actual
number of days elapsed on the basis of a year of 360 days.
     SECTION 2.13 Pro Rata Treatment and Payments. (a) Except as otherwise
provided herein, (i) each payment by the Borrower on account of principal of the
Loans shall be made pro rata to the Lenders according to the respective
outstanding principal amounts of the Loans then due and payable and (ii) each
payment of interest on the Loans shall be made for the account of the Lenders
pro rata in accordance with the respective amounts of interest on the Loans then
due and payable to them.
     (b) Payments of principal and interest in respect of Loans and payments of
fees and other amounts due hereunder shall be made in Dollars. All payments to
be made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or set-off. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office and in immediately
available funds, and shall be made not later than 2:00 p.m., New York City time,
on the date specified herein. The Administrative Agent shall distribute such
payments to the Lender
Credit Agreement 25

 

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

 

or Lenders entitled to receive the same promptly upon receipt in like funds as
received. All payments received by the Administrative Agent after 2:00 p.m., New
York City time, shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment on a
Loan becomes due and payable on a day other than a Business Day therefor, the
maturity thereof shall be extended to the next succeeding Business Day for such
Loan (and such extension of time shall be reflected in computing interest or
fees, as the case may be) unless, with respect to Loans, the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
     (c) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Loan that such Lender will not make
available to the Administrative Agent such Lender’s share of such Loan, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.1 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Administrative Agent, then the applicable Lender and the
Borrower, upon receipt of notice from the Administrative Agent of such failure,
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of a payment to be made by such Lender, the Overnight Rate and
(ii) in the case of a payment to be made by the Borrower, the interest rate
applicable to the Loans. If the Borrower and such Lender shall pay such interest
to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period. If such Lender pays its share of
the applicable Commitment to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Loan included in such Commitment. Any payment by
the Borrower shall be without prejudice to any claim the Borrower may have
against a Lender that shall have failed to make such payment to the
Administrative Agent.
     (d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender, in immediately available funds with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
Overnight Rate.
     (e) Except as otherwise set forth herein, all payments made under this
Agreement or any other Loan Document shall be applied first (in each case on a
pro rata basis to the recipients thereof based upon the amounts then owed to
them) to pay fees and expenses due to the Beneficiaries under the Loan
Documents, then to pay accrued and unpaid interest on the Loans, then to pay
principal of the Loans and then to pay any and all other amounts payable to the
Beneficiaries under the Loan Documents.
Credit Agreement 26

 

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

 

     SECTION 2.14 Set-Off; Sharing of Payments, Etc. (a) Without limiting any of
the obligations of the Loan Parties or the rights of any Beneficiary under the
Loan Documents, if the Borrower shall fail to pay when due (whether at stated
maturity, by acceleration or otherwise) any amount payable by it hereunder or
under any other Loan Document, then (to the extent not in violation of an
Applicable Law) each Beneficiary may, without prior notice to any Loan Party
(which notice is expressly waived by it to the fullest extent permitted by
Applicable Law), set off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final, in any
currency, matured or unmatured) at any time held or any other Indebtedness owing
by such Beneficiary or any of its Affiliates (in each case, including any branch
or agency thereof) to or for the credit or account of the Borrower or any other
Loan Party. Each Beneficiary shall promptly provide written notice of any such
set-off by it to the Borrower and the Administrative Agent; provided that
failure by such Beneficiary to provide such notice shall not give the Borrower
any cause of action or right to damages or affect the validity of such set-off
and application.
     (b) If, other than as expressly provided elsewhere herein, any Beneficiary
shall obtain on account of the Obligations owing to it hereunder or in respect
of its Loans any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its share of payments on
account of the Obligations obtained by all the Beneficiaries, such Beneficiary
shall forthwith (i) notify the Administrative Agent of such fact, and
(ii) purchase from the other Beneficiaries such participations in such amounts
made by them as shall be necessary to cause such purchasing Beneficiary to share
the excess payment ratably with each of them; provided, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Beneficiary, such purchase shall to that extent be rescinded and each other
Beneficiary shall repay to the purchasing Beneficiary the purchase price paid
therefor, without interest. The provisions of this Section 2.14(b) shall not be
construed to apply to (A) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or (B) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.14 and will in each case notify the Lenders
and the Borrower following any such purchases.
     Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under Applicable Law, that any Beneficiary acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff permitted hereunder and counterclaim with respect to
such participation as fully as if such Beneficiary were a direct creditor of
such Loan Party in the amount of such participation.
ARTICLE III
YIELD PROTECTION, ETC.
     SECTION 3.1 Taxes. (a) All payments made by each Loan Party under this
Agreement and any Notes shall be made free and clear of, and without deduction
for or on account of, any present or future Taxes, including Other Taxes (but
excluding any tax imposed on or measured by the net income or net profits or
capital (or any franchise or similar tax imposed in lieu thereof) of a
beneficiary of such payment (each a “Payee”) pursuant to the laws of the
jurisdiction (or any political subdivision thereof) in which it is organized or
the jurisdiction (or any political
Credit Agreement 27

 

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

 

subdivision thereof) in which the Lending Office of such Lender is located and
any withholding taxes to the extent imposed by reason of any Payee, that is not
a Mexican Financial Institution, or its assignees or participants, if any,
failing to make reasonable commercial efforts, consisting of timely making any
necessary filing and taking related action, to maintain its registration for the
purposes of Article 195(I) or Article 196(II) of the Mexican Income Tax Law (Ley
del Impuesto Sobre la Renta) or any successor provision with Hacienda
(collectively, the “Excluded Taxes”)). If any such Taxes that are not Excluded
Taxes (“Non-Excluded Taxes”) are required to be withheld from any amounts
payable to any Payee hereunder (subject to the right of such Loan Party to
contest any such requirement in good faith, so long as proper reserves are
maintained and each Payee hereunder is paid the full amounts payable hereunder
including any additional amounts payable), such Loan Party shall pay such
Non-Excluded Taxes, including Other Taxes, to the appropriate taxing authority,
and the amounts payable to each such Payee shall be increased by such additional
amounts (the “Additional Amounts”) necessary to yield to such Payee (after
payment of all Non-Excluded Taxes, Other Taxes and Additional Amounts, including
any of the foregoing levied on Additional Amounts) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement in the absence of such payments or deductions; provided that no such
Additional Amounts shall be payable in respect of any Taxes that would not have
been imposed but for a failure by a Payee to provide the documents required by
Section 3.1(c) strictly pursuant to the terms of, and only in the circumstances
specified in, Section 3.1(c), in excess of the Additional Amounts that would
have been payable had such documents been provided. In addition, such Loan Party
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with Applicable Law. Whenever any Non-Excluded Tax or Other Tax is payable by a
Loan Party, as promptly as possible thereafter, such Loan Party shall send to
the Administrative Agent, for the account of such Payee, a certified copy by a
Responsible Officer of such Loan Party of a stamped filed receipt showing
payment thereof or such other document reasonably satisfactory to such Payee
showing payment thereof. If such Loan Party fails to pay any Non-Excluded Taxes
or Other Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary
evidence, such Loan Party shall indemnify the affected Payee for any incremental
taxes, interest, penalties, loss, liability, claim or expense (including legal
fees and expenses) that may become payable by any such Payee as a result of any
such failure. This indemnity and agreement shall survive termination of the
Agreement and payment of the Loans.
     (b) Subject to the last sentence of Section 3.1(c) below, each Loan Party
shall indemnify the Administrative Agent and each Payee, within 10 days after
written demand therefor, for the full amount of any Non-Excluded Taxes or Other
Taxes paid by the Administrative Agent or such Payee on or with respect to any
payment by or on account of any obligation of such Loan Party hereunder
(including Non-Excluded Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 3.1) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to such Loan Party by a Payee,
or by the Administrative Agent on its own behalf or on behalf of a Payee, shall
be conclusive absent manifest error.
     (c) Each Payee that is not a Mexican Financial Institution shall from time
to time, at the request of the Borrower or the Administrative Agent, furnish to
the Borrower or the
Credit Agreement 28

 

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

 

Administrative Agent, as the case may be, such documentation required under
Applicable Law as may be required to establish any available exemption from, or
reduction in the amount of, otherwise applicable Non-Excluded Taxes; provided
that (i) such documentation is consistent with Applicable Law and (ii) such
documentation would not, in the judgment of such Payee, require such Payee to
disclose any confidential or proprietary information or otherwise be
disadvantageous to such Payee; provided that such documentation shall not be
considered disadvantageous solely by virtue of administrative inconvenience to
such Payee. The Borrower and the Administrative Agent shall be entitled to rely
upon the accuracy of any such documentation furnished to it by any Payee that is
not a Mexican Financial Institution and shall have no obligation to indemnify
such Payee for any incremental taxes, interest or penalties that may become
payable by such Payee solely as a result of any inaccuracy contained therein or
the Payee’s failure to furnish such documentation.
     SECTION 3.2 Illegality. Notwithstanding any other provisions herein, if any
Applicable Law or any change therein or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain a Loan as
contemplated by this Agreement, then such Lender may give notice thereof to each
of the Borrower and the Administrative Agent and, upon the giving of such notice
(a) the Commitments of such Lender hereunder to make further Loans shall
forthwith be canceled (with, unless the Borrower replaces such Lender in
accordance with Section 3.6 within ten Business Days following such notice, a
corresponding reduction of the aggregate amount of the Commitments under the
Tranche of the canceled Commitment) and/or (b) if such Applicable Law shall so
mandate, such Lender’s Loan shall be prepaid in full by the Borrower, together
with accrued and unpaid interest thereon and all other amounts payable by the
Borrower under this Agreement, on or before such date as shall be mandated by
such Applicable Law (such prepayment not being shared as described in
Section 2.13 with any Lenders not so affected); provided that if it is lawful
for such Lender to maintain its Loan through the last day of the then current
Interest Period, as the case may be, such payment shall be made on such date.
     SECTION 3.3 Additional Costs. (a) If, after the Effective Date, and as a
result of the adoption of any law, regulation, treaty or official directive or
request (whether or not having the force of law) or any change therein or any
introduction thereof (which such change or introduction is publicly announced
through official governmental, regulatory or other customary means after the
Effective Date) or compliance therewith by the Borrower, the Administrative
Agent or any Lender (or any corporation Controlling such Lender) including those
relating to taxation, reserves, special deposit, cash ratio, liquidity, capital
adequacy or Eurocurrency Liabilities, if applicable, or other requirement or any
other form of banking or monetary requirements or controls, any of the following
shall occur:
     (i) the cost to any Lender of maintaining its Loans is increased by an
amount determined by such Lender to be material; or
     (ii) any amount receivable by any Lender is reduced by an amount determined
by such Lender to be material as a result of maintaining its Loans; or
     (iii) the rate of return on such Lender’s (or its Controlling
corporation’s) capital is reduced as a consequence of its obligations hereunder
below that which such Lender could have achieved but for such adoption, change
or introduction (taking into
Credit Agreement 29

 

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

 

consideration such Lender’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material;
in the case of each of clauses (i), (ii) and (iii) other than any increase in or
incurrence of cost, reduction in yield or other return or additional payment
resulting from Excluded Taxes, then and in each such case:
     (A) such Lender or the Administrative Agent (an “Affected Party”) shall
notify the Borrower through the Administrative Agent in writing of such event
promptly upon its becoming aware of the event entitling it to make a claim; and
     (B) within a reasonable period (not exceeding 15 Business Days) following
any demand from time to time by such Affected Party through the Administrative
Agent (with a copy contemporaneously sent to the Borrower), the Borrower shall
pay to the Administrative Agent, for the account of such Affected Party, such
amount as shall compensate such Affected Party for such increased cost, reduced
amount receivable or reduction in rate of return (excluding anticipated profits
unrelated to those measured by the Applicable Margin, the Default Rate, if
applicable, and the Commitment Fee). The certificate of such Affected Party
specifying the amount of such compensation shall be conclusive save in the case
of manifest error.
     (b) If an Affected Party shall request compensation under this Section 3.3,
such Affected Party shall furnish to the Borrower a statement setting forth the
basis for requesting such compensation.
     (c) The covenants and agreements set forth in this Section 3.3 shall
survive the termination of this Agreement and the payment of the outstanding
Loans. Failure or delay on the part of any Affected Party to demand compensation
pursuant to this Section 3.3 shall not constitute a waiver of such Affected
Party’s right to demand compensation; provided that the Borrower shall not be
required to compensate an Affected Party, as applicable, pursuant to this
Section 3.3 for any increased costs or reductions incurred more than 90 days
prior to the date that such Affected Party notifies the Borrower of the event
giving rise to such increased costs or reductions and of such Affected Party’s
intention to claim compensation therefor; and provided further that, if the
event giving rise to such increased costs or reduction is retroactive, then the
90 day period referred to above shall be extended to include the period of
retroactive effect thereof.
     SECTION 3.4 Funding Losses. The Borrower agrees to indemnify each Lender
and to hold such Lender harmless from any actual loss or expense (excluding loss
of profit) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in payment when due (by acceleration or otherwise)
of the principal amount of or interest on the Loans of such Lender, (b) default
by the Borrower in making a borrowing of Loans or any prepayment after the
Borrower has given a notice in accordance with Section 2.3 or 2.6 and (c) the
making by the Borrower of a prepayment of the Loans on a day which is not the
last day of an Interest Period (whether or not the Administrative Agent or such
Lender has previously consented to such prepayment), including any such loss or
expense arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Loans hereunder as set forth in a
Credit Agreement 30

 

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

 

certificate of such Lender delivered to the Borrower through the Administrative
Agent. This covenant shall survive termination of this Agreement and payment of
the Loans.
     SECTION 3.5 Change of Lending Office. Each Lender that is not a Mexican
Financial Institution agrees that, upon the occurrence of any event giving rise
to the operation of Section 3.1(a) (other than the imposition of the Mexican
withholding taxes expected, based upon the identity and place of residence of
each Lender on the Effective Date, or the Mexican withholding taxes applicable
to interest payments made to an Eligible Assignee), 3.2 or 3.3(a) as to it and
upon request by the Borrower, it will use its commercially reasonable efforts to
avoid or minimize the consequences of such event if such action shall not, in
the judgment of such Lender, as the case may be, be illegal or economically or
otherwise disadvantageous to it. If such Lender is entitled to compensation for
the events specified under Section 3.1 (other than as set forth in the preceding
sentence) or 3.3(a), or the Borrower is required to make a prepayment as a
result of the operation of Section 3.2, such Lender shall use commercially
reasonable efforts for a period of 30 days to designate a different Lending
Office for any Obligation affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation (except as set forth in
the preceding sentence) and will not, in the sole opinion of such Lender, result
in any economic, legal or regulatory or other disadvantage to such Lender or any
of its Affiliates.
     SECTION 3.6 Replacement of Lenders. The Borrower shall be permitted, at its
sole expense and effort, to replace with a replacement financial institution or
Eligible Assignee any Lender (a) that requests reimbursement for amounts owing
pursuant to Section 3.1(a) (but only if such Lender is (i) not a Mexican
Financial Institution and (ii) a financial institution not registered with
Hacienda for purposes of Article 195(I) or Article 196(II) of the Mexican Income
Tax Law or any successor provision thereof and, in the case of a financial
institution registered with Hacienda for purposes of Article 195(I) of the
Mexican Income Tax Law, not a resident of (or, if acting through a branch or
agency, does not have its principal office in) a country with which Mexico has
entered into a treaty for the avoidance of double taxation) or 3.3(a), (b) to
which the Borrower is required to make a prepayment or commitment reduction as a
result of the operation of Section 3.2, (c) that defaults in its obligation to
make its Loan hereunder or (d) that fails to consent to an election, consent,
amendment, waiver or other modification to this Agreement or other Loan Document
requiring more Lenders than the Majority Lenders’ consent and such election,
consent, amendment, waiver or other modification is otherwise consented to by
Lenders holding more than 66 2/3% of the sum of (i) all undrawn Commitments on
such date and (ii) all Loans outstanding on such date, without giving effect to
the Loans and undrawn Commitments attributable to such Lender; provided that
(A) such replacement does not conflict with any Applicable Law, (B) no Default
or Event of Default shall have occurred and be continuing at the time of such
replacement, (C) prior to any such replacement, such Lender shall have taken no
action under Section 3.5 which has eliminated the continued need for payment of
amounts owing pursuant to Section 3.1(a) or 3.3(a) or the operation of
Section 3.2, (D) the replacement financial institution shall purchase, at par,
the Loans and other amounts (including accrued and unpaid interest) owing to
such replaced Lender on or prior to the date of replacement, (E) the Borrower
shall be liable to such replaced Lender under Section 3.4 if the Loans owing to
such replaced Lender shall be purchased other than on the last day of an
Interest Period relating to such Loans, (F) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (G) the replaced Lender shall be obligated to make such
replacement without recourse in accordance with the provisions of Section 11.8
(provided that
Credit Agreement 31

 

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

 

the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (H) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 3.1(a) or 3.3(a), as the case may be, and (I) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.
ARTICLE IV
CONDITIONS PRECEDENT
     SECTION 4.1 Conditions to Initial Funding. The obligation of each Lender to
make the Loans requested to be made by it on the Initial Borrowing Date is
subject to the occurrence of the Effective Date and satisfaction of the
following conditions precedent (in addition to the conditions set forth in
Section 4.2), written notice of which satisfaction will be given by the
Administrative Agent to the Borrower:
     (a) The Administrative Agent shall have received the following, each of
which shall be an original or telecopy (followed promptly by an original) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party and each in form and substance satisfactory to the
Administrative Agent and each of the Lenders and in sufficient number of copies
for distribution to all Lenders:
     (i) Agreement. This Agreement, duly executed and delivered by the parties
hereto;
     (ii) Notes. Duly executed Notes for each of the Lenders, dated the Initial
Borrowing Date, issued in accordance with this Agreement;
     (iii) Opinion of Counsel to the Loan Parties. An opinion, dated the Initial
Borrowing Date, of each of Sonnenschein, Nath & Rosenthal LLP and White & Case,
S.C., special U.S. counsel and special Mexican counsel, respectively, to the
Loan Parties, in substantially the form of Exhibits B and C, addressed to the
Administrative Agent and each Lender;
     (iv) Opinion of Counsel to the Administrative Agent. An opinion, dated the
Initial Borrowing Date, of each of Mayer, Brown, Rowe & Maw LLP and Ritch
Mueller, S.C., special U.S. counsel and special Mexican counsel, respectively,
to the Administrative Agent;
     (v) Governmental and Third-Party Approvals. Copies of all necessary orders,
consents, approvals (including authorizations from any central bank), licenses,
permissions, registrations and validations of, or notices to or filings with,
and exemptions by, any Governmental Authority, and all third-party consents and
approvals, required for the execution, delivery, performance or carrying out by
the Borrower and Arrendadora of the provisions of the Loan Documents, and for
the validity or enforceability of the obligations incurred hereunder or
thereunder, which shall be in full force and effect;
     (vi) Organizational Documents. The following organizational documents:
(A) a copy duly certified by a Mexican Public Notary, in Spanish, of the
estatutos sociales of the Borrower and Arrendadora as in effect as of the
Effective Date and the Initial
Credit Agreement 32

 

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

 

Borrowing Date and further certified by the Secretary or Alternate Secretary of
the Board of Directors of each of the Borrower and Arrendadora, as to
effectiveness; (B) an incumbency certificate designating the officers of the
Borrower and Arrendadora (together with their specimen signatures) who are
authorized to execute any document in connection with the transactions
contemplated by the Loan Documents and certifying that the resolutions and
powers-of-attorney contemplated in the following clauses (C) and (D) have not
been modified, revoked or rescinded as of the date of such certificate;
(C) copies notarized by a Mexican Public Notary of resolutions of the
shareholders of the Borrower and Arrendadora certified by the Secretary or the
Alternate Secretary of the Board of Directors of the Borrower or Arrendadora, as
the case may be, or a Responsible Officer of the Borrower or Arrendadora, as the
case may be, authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and the designation of the Process Agent as its
agent for service of process; and (D) copies duly certified by a Mexican Public
Notary and by the Secretary or Alternate Secretary of the Board of Directors of
each of Arrendadora and the Borrower, of the powers-of-attorney granted to
officers of the Borrower and Arrendadora authorizing the execution of each Loan
Document and to the Process Agent to act as agent for service of process;
     (vii) Concession Title. A copy of the Concession Title together with a
certificate, dated the Initial Borrowing Date, of the Secretary or the Alternate
Secretary of the Board of Directors of the Borrower or any Responsible Officer
of the Borrower stating that the Concession Title is in full force and effect
and further that the Borrower is in material compliance with all terms and
conditions applicable thereunder or pursuant to Applicable Law;
     (viii) Financial Statements. (A) Audited consolidated financial statements
of the Borrower and its Consolidated Subsidiaries for fiscal year 2006 and
(B) unaudited interim consolidated financial statements of the Borrower and its
Consolidated Subsidiaries for the three months ended after the date of the
latest applicable financial statements delivered pursuant to clause (A) of this
clause through March 31, 2007;
     (ix) Process Agent Acceptance. A letter from the Process Agent accepting
its appointment as agent for each Loan Party.
     (b) Representations and Warranties. The representations and warranties of
the Borrower and Arrendadora contained in each of the Loan Documents shall be
true and correct in all material respects on and as of the Initial Borrowing
Date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date) with the same effect
as if made on and as of such date, and each of the Borrower and Arrendadora
shall have delivered to the Administrative Agent a certificate of a Responsible
Officer to that effect.
     (c) No Event of Default. No Default or Event of Default shall have occurred
and be continuing on the Initial Borrowing Date or shall result from the making
of any Loan hereunder on such date or the use of the proceeds thereof, and each
of the Borrower and Arrendadora shall have delivered to the Administrative Agent
a certificate of a Responsible Officer to that effect.
     (d) Material Adverse Change of the Borrower and its Subsidiaries. There
shall not have occurred any event, change or condition since December 31, 2006
with respect to the
Credit Agreement 33

 

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

 

Borrower and its Subsidiaries that, individually or in the aggregate, has had,
or could reasonably be expected to have, a material adverse effect on the
business, assets, liabilities, operations, condition (financial or otherwise),
operating results or prospects of the Borrower and its Subsidiaries, taken as a
whole.
     (e) Material Adverse Change in the Syndication Market. There shall not have
occurred any event, change or condition with respect to the loan syndication
market or the financial, banking or capital markets generally that, individually
or in the aggregate, has had, or could reasonably be expected to have, a
material adverse effect on the syndication of the Loans.
     SECTION 4.2 Conditions Precedent to Each Loan. The obligation of each
Lender to make any Loan requested to be made by it on any date during the
Commitment Period is subject to the satisfaction of the following conditions
precedent:
     (a) Notice of Borrowing/Continuation. The Administrative Agent shall have
received a Notice of Borrowing/Continuation as required by Section 2.3.
     (b) Representations and Warranties. The representations and warranties of
the Borrower and each Guarantor contained in each of the Loan Documents (other
than any such representation or warranty which, by its term, speaks as of a
particular date) shall be true and correct in all material respects on and as of
each Borrowing Date, before and after giving effect to the making of the
relevant Loans on such Borrowing Date and to the application of the proceeds
thereof, with the same effect as if made on and as of such date.
     (c) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on any Borrowing Date or shall result from the
making of the requested Loans on such date or the use of the proceeds thereof.
     (d) Payment of Fees and Expenses. The Administrative Agent shall have
received evidence of payment of the fees and expenses then due and payable under
Sections 2.12(a) and (b) and 11.2 and of any and all stamp taxes or similar
taxes payable on or before the Initial Borrowing Date in connection with the
transactions contemplated by the Loan Documents, including legal fees of special
U.S. and Mexican counsel to the Administrative Agent (all of which fees,
expenses and taxes the Borrower authorizes the Administrative Agent to deduct
from proceeds of the Loans).
     The borrowing of any Loans by the Borrower hereunder on each Borrowing Date
shall constitute a representation and warranty by the Borrower as of such
Borrowing Date that the conditions contained in clauses (c) and (d) have been
satisfied.
     SECTION 4.3 Satisfaction of Conditions Precedent. Without limiting the
generality of the provisions of Section 10.4, for purposes of determining
compliance with the conditions specified in Sections 4.1 and 4.2, each Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed
Borrowing Date specifying its objection thereto. The determination as to
satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2 shall
be at the sole discretion of the Lenders.
Credit Agreement 34

 

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

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES
     In order to induce the Lenders and the Administrative Agent to enter into
this Agreement, each of the Loan Parties makes the following representations and
warranties to the Lenders and the Administrative Agent as of the Effective Date,
each Borrowing Date and (with respect to any Subsidiary that becomes a Guarantor
pursuant to Section 6.11) as of the execution date of the relevant Accession
Agreement, all of which shall survive the execution and delivery of this
Agreement:
     SECTION 5.1 Status and Licensing. (a) The Borrower is a corporation with
variable capital (sociedad anónima de capital variable), (b) Arrendadora is a
corporation with variable capital (sociedad anónima de capital variable), and
(c) each of their respective Subsidiaries is either (i) a corporation with
variable capital (sociedad anónima de capital variable) or (ii) a company with
variable capital (sociedad de responsabilidad limitada de capital variable), in
each case duly organized and validly existing under the laws of Mexico; provided
that, if the Borrower gives five (5) Business Days prior written notice to the
Administrative Agent, each of the Borrower and Arrendadora may be transformed
into a corporation with limited liability (sociedad de responsabilidad limitada
de capital variable) and the representation provided in this Section 5.1(a)
shall be conformed accordingly. Each Loan Party has the power and authority to
own its Property and to transact the business in which it is engaged and is duly
qualified or licensed as a foreign corporation in each jurisdiction in which
such qualification or license is required, unless failure so to have such power
and authority or to qualify or be licensed could not reasonably be expected to
have a Material Adverse Effect.
     SECTION 5.2 Corporate Power and Authority; Enforceable Obligations.
(a) Each Loan Party has the corporate power to execute, deliver and perform the
terms and provisions of the Loan Documents to which it is a party, and has taken
all necessary corporate action required by its estatutos sociales to authorize
the execution, delivery and performance of the Loan Documents to which it is a
party.
     (b) Each Loan Document to which such Loan Party is a party has been duly
authorized, executed and delivered by such Loan Party.
     (c) Each of the Loan Documents to which such Loan Party is a party
constitutes, and each Note when executed and delivered by it for value received
will constitute, legal, valid and binding obligations of such Loan Party
enforceable in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, concurso
mercantil, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
     SECTION 5.3 Compliance with Law and Other Instruments. Neither the
execution, delivery or performance by each Loan Party of the Loan Documents to
which it is a party in accordance with their respective terms, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the terms and provisions hereof or thereof, (a) will contravene such Loan
Party’s charter or by-laws (estatutos sociales) (or other equivalent
organizational documents) or (b) will contravene any Applicable Law to which
such Loan Party is subject or any judgment, decree, order or permit applicable
to such Loan Party, or (c) will
Credit Agreement 35

 

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

 

conflict with or will result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any Property of such Loan Party or KCS pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument (other than those
permitted or required by this Agreement, including, without limitation,
Permitted Liens) to which such Loan Party is a party or bound or to which it may
be subject, except in each case under clause (b) or (c) where such conflict,
breach, default or violation could not reasonably be expected to have a Material
Adverse Effect.
     SECTION 5.4 Litigation and Environmental Matters. There are no actions,
suits or proceedings pending or, to the best knowledge of the Loan Parties,
threatened against any Loan Party or affecting the Property of any Loan Party
before any court, tribunal or other Governmental Authority: (a) with respect to
any Loan Document, (b) which individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect or (c) which seeks the revocation
or expropriation of the Concession Title. Except with respect to any matters
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, each Loan Party (i) has not failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
not become subject to any Environmental Liability, (iii) has not received notice
of any claim with respect to any Environmental Liability or (iv) knows of no
basis for any Environmental Liability. None of the Loan Parties is in default
with respect to any Applicable Law which could reasonably be expected to have a
Material Adverse Effect.
     SECTION 5.5 Governmental Approvals. No order, permission, consent,
approval, license, authorization, registration or validation of, or notice to or
filing with, or exemption by, any Governmental Authority is required to
authorize, or is required in connection with, the execution, delivery and
performance by each Loan Party of any Loan Document to which it is a party or
the taking of any action by each Loan Party hereby or thereby contemplated, or,
if any of the foregoing are required, they have been obtained and are in full
force and effect.
     SECTION 5.6 Financial Information. (a) The audited financial statements and
the unaudited financial statements delivered in accordance with
Section 4.1(a)(viii) (the “Financial Statements”), including in each case the
related schedules and notes, fairly present the financial condition of the
Borrower and its Consolidated Subsidiaries as of the dates of such statements
and the results of their operations for the periods therein stated and have been
prepared in accordance with GAAP, consistently applied throughout the periods
involved (unless and to the extent otherwise stated therein).
     (b) Except as disclosed in this Agreement or in the Financial Statements,
there are no liabilities or obligations with respect to the Borrower and its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) and the Borrower is not aware of any basis for
the assertion against it or its Subsidiaries of any liability or obligation of
any nature that is not fully disclosed in the Financial Statements which, in
either case, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
     (c) Since December 31, 2006, there has been no development or event that
has had or could reasonably be expected to have a Material Adverse Effect.
Credit Agreement 36

 

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

 

     SECTION 5.7 Taxes, Assessments and Fees. Each Loan Party has timely filed
all tax returns and reports required to have been filed and has paid all taxes
due by it except such taxes as are being contested in good faith by appropriate
proceedings for which adequate (in the good faith judgment of such Loan Party)
reserves have been made (in accordance with GAAP) or such taxes the failure of
which to pay could not reasonably be expected to have a Material Adverse Effect.
     SECTION 5.8 Investment Company Act. None of the Loan Parties is an
“investment company” required to be registered under the Investment Company Act
of 1940, as amended.
     SECTION 5.9 Accuracy of Information. All written information supplied by
the Loan Parties to the Joint Lead Arrangers, the Administrative Agent and/or
the Lenders relating to the Loan Parties, taken as a whole, was true and
accurate in all material respects as of the date supplied, and did not as of
such date, and does not, in each case taken as a whole, omit to state any
material information necessary to make the information therein contained, in
light of the circumstances under which such information was supplied, not
misleading. It is understood that: (a) no representation or warranty is made
concerning the forecasts, estimates, pro forma information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based, contained in any such information,
reports, financial statements, exhibits or schedules, except that as of the date
such forecasts, estimates, pro forma information, projections and statements
were generated, (i) such forecasts, estimates, pro forma information,
projections and statements were based on the good faith assumptions of the
management of the Borrower and (ii) such assumptions were believed by such
management to be reasonable and (b) such forecasts, estimates, pro forma
information and statements, and the assumptions on which they were based, may or
may not prove to be correct.
     SECTION 5.10 Absence of Default. No Default or Event of Default has
occurred and is continuing.
     SECTION 5.11 Ranking; Recourse; Liens. (a) The Obligations of each Loan
Party hereunder and under the other Loan Documents to which it is a party are
and will at all times be unconditional general obligations of such Loan Party,
and rank and will at all times rank at least pari passu in right of payment with
all its other senior unsecured Indebtedness, except for obligations accorded
preference by mandatory provisions of law. Except for the Liens created in
connection with the Existing Credit Agreement (which are to be released on the
Effective Date or in connection with the refinancing contemplated hereunder),
there is no Lien upon or with respect to any of the present Property or
Indebtedness of any Loan Party or its respective Subsidiaries other than Liens
permitted or required by this Agreement, including, without limitation,
Permitted Liens.
     (b) Attached as Schedule 5.11(b) is a complete and accurate list of all
Liens of each Loan Party securing Indebtedness in an amount equal to or greater
than US$5,000,000 (or its equivalent in other currencies) existing on the
Effective Date, showing as of the Effective Date the lienholder thereof, the
principal amount of the obligations secured thereby and a brief description of
the Property subject thereto.
     SECTION 5.12 Withholding Tax. As of the Effective Date, there is no tax,
levy, impost, deduction, charge or withholding imposed, levied or made by or in
Mexico or any political subdivision or taxing authority thereof or therein
either (a) on or by virtue of the execution or
Credit Agreement 37

 

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

 

delivery of the Loan Documents or (b) on any payment to be made pursuant to the
Loan Documents to any Person, except that payments of interest under this
Agreement or the Notes and fees payable hereunder and under the Fee Letters will
be subject to a Mexican withholding tax at a rate of 4.9% so long as the Payee,
that is not a Mexican Financial Institution or a lender that is not registered
with Hacienda for purposes of Article 196(II) of the Mexican Income Tax Law,
(i) is a foreign commercial bank or other financial institution registered with
Hacienda for purposes of Article 195(I) of the Mexican Income Tax Law (Ley del
Impuesto Sobre la Renta), the regulations thereunder and any administrative
rules issued thereunder and (ii) is a resident for tax purposes of (or its
principal place of business, if lending through a branch or agency, is located
in) a country with which Mexico has entered into a treaty for the avoidance of
double taxation. As of the Effective Date, each Loan Party is permitted under
Applicable Law, to make all payments pursuant to the Loan Documents free and
clear of all Taxes imposed, levied or made by or in Mexico or any political
subdivision or taxing authority thereof, as provided in each Loan Document,
without any liability to be borne by the payee in connection with such Mexican
withholding tax to the extent that the Loan Party making such payment has
complied with its obligations in Section 3.1 of this Agreement to pay to the
appropriate Mexican authorities applicable Taxes required to be paid by such
Loan Party.
     SECTION 5.13 Proper Form. The Loan Documents are (or, in the case of any
Note, will be, upon the issuance thereof in accordance herewith) in proper legal
form for the enforcement thereof in Mexico, against each Loan Party; provided
that, if any legal proceedings are brought in a court of Mexico for the
enforcement against a Loan Party, of this Agreement, the Fee Letters or any
other Loan Document that is executed in a language other than Spanish, a Spanish
translation of such document prepared by a translator approved by the Mexican
court would have to be approved by such court after such Loan Party has been
given the opportunity to be heard with respect to the accuracy of the
translation, and proceedings would thereafter be based on the translated
documents. To ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement, the Fee Letters or any other Loan Document in Mexico
it is not necessary that this Agreement, the Fee Letters or any other Loan
Document be filed or recorded with any Governmental Authority in Mexico or be
notarized, or that any stamp or similar tax be paid on or in respect of this
Agreement, the Fee Letters or any other Loan Document.
     SECTION 5.14 Choice of Law. In any action or proceeding involving a Loan
Party arising out of or relating to any Loan Document in any court of Mexico,
the Lenders and the Administrative Agent would be entitled to the recognition
and effectiveness of the choice of law provisions of Section 11.4.
     SECTION 5.15 Immunity. Each Loan Party is subject to suit in Mexico and
neither any Loan Party nor its Property has any right of immunity, on the
grounds of sovereignty or otherwise, from any legal action, suit or proceeding,
set-off or counterclaim, the jurisdiction of any competent court and service of
process, attachment or execution in Mexico with respect to its obligations,
liabilities, or any other matter under or arising out of or in connection with
any Loan Document, and to the extent that such Loan Party or its Property may
have or may hereafter become entitled to any such right of immunity it has
effectively waived such right under Section 11.13; provided that the Concession
Title may not be transferred to any Person without the prior consent of the
government of Mexico. The waiver by each Loan Party described in the immediately
preceding sentence is a legal, valid and binding obligation thereof.
Credit Agreement 38

 

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

 

The foregoing waiver is intended to be effective to the fullest extent now or
hereafter permitted by the Applicable Law of any jurisdiction in which any suit,
action or proceeding with respect to any Loan Document may be commenced. The
performance of the Loan Documents by the Loan Parties constitutes private and
commercial acts rather than governmental or public acts.
     SECTION 5.16 Status of Concession. The Concession Title is in full force
and effect and no proceeding or, to the best knowledge of the Borrower,
investigation seeking the termination or revocation of the Concession Title has
been initiated pursuant to a notice sent to the Borrower.
     SECTION 5.17 Property. (a) Each Loan Party has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and that could not reasonably be expected
to have a Material Adverse Effect.
     (b) Each Loan Party owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by it does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
     (c) As of the Effective Date, each Loan Party maintains insurance with
respect to all Property material to the conduct of its business and
Schedule 5.17(c) contains an accurate description of such insurance coverage,
insured amounts and the name of each insurance company with which each such
insurance is maintained.
     SECTION 5.18 Subsidiaries. The Subsidiaries listed on Schedule 5.18 hereto
constitute the only Subsidiaries of each Loan Party as at the Effective Date.
     SECTION 5.19 Federal Regulations. No part of the proceeds of any Loan will
be used for “buying” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board of Governors of the Federal Reserve System. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
     SECTION 5.20 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Loan Party pending or, to the
knowledge of the Loan Parties, threatened; (b) hours worked by and payment made
to employees of the Loan Parties have not been in violation of any Applicable
Law dealing with such matters; and (c) all payments due from any Loan Party on
account of employee health and welfare insurance have been paid or accrued as a
liability on the financial statements of such Loan Party.
Credit Agreement 39

 

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

 

     SECTION 5.21 Existing Indebtedness. Attached as Schedule 5.21 is a complete
and accurate list of all existing Indebtedness of each Loan Party and its
respective Subsidiaries in excess of US$1,000,000 as of the Effective Date.
ARTICLE VI
AFFIRMATIVE COVENANTS
     Each of the Loan Parties covenants and agrees that, until the payment in
full of all Obligations, and so long as any Commitment is outstanding:
     SECTION 6.1 Senior Obligations. Each Loan Party shall ensure that its
obligations under this Agreement and the Notes shall at all times rank at least
pari passu in right of payment with all its other present and future senior
unsecured Indebtedness of such Loan Party, except for obligations accorded
preference by mandatory provisions of law or expressly permitted under this
Agreement.
     SECTION 6.2 Reporting Requirements. The Borrower shall provide to the
Administrative Agent, in sufficient copies for distribution by the
Administrative Agent to all Lenders:
     (a) as soon as available, and in any case within 90 days of the end of each
fiscal year of the Borrower, beginning with fiscal year 2007, the consolidated
annual financial statements of the Borrower and its Consolidated Subsidiaries
audited and reported on in accordance with GAAP consistently applied (except as
otherwise discussed in the notes to such financial statements), with the opinion
thereon of internationally recognized independent public accountants, which
financial statements shall present fairly in accordance with GAAP the financial
condition of the Borrower and its Consolidated Subsidiaries as at the end of the
relevant fiscal year and the results of the operations of the Borrower and its
Consolidated Subsidiaries for such fiscal year; provided that for so long as the
Borrower files a Form 10-K with the Securities and Exchange Commission, the
furnishing by the Borrower to the Administrative Agent of such Form 10-K for
each fiscal year of the Borrower shall satisfy the Borrower’s obligation to
provide the financial statements contemplated in this clause (a);
     (b) as soon as available, and in any case within 45 days of the end of each
of the first three fiscal quarters of each year, beginning with the fiscal
quarter ending on June 30, 2007, the unaudited consolidated financial statements
of the Borrower and its Consolidated Subsidiaries in respect of such fiscal
quarter prepared in accordance with GAAP, consistently applied (except as
otherwise discussed in the notes to such financial statements), which financial
statements shall present fairly in accordance with GAAP (subject to absence of
footnotes), the financial condition of the Borrower and its Consolidated
Subsidiaries as at the end of the relevant fiscal quarter of each fiscal year
and the results of the operations of the Borrower and its Consolidated
Subsidiaries for such fiscal quarter; provided that for so long as the Borrower
files a Form 10-Q with the Securities and Exchange Commission, the furnishing by
the Borrower to the Administrative Agent of such Form 10-Q for each fiscal
quarter of the Borrower shall satisfy the Borrower’s obligation to provide the
financial statements contemplated in this clause (b);
     (c) no later than March 31 of each year, updated financial projections of
the Borrower for each three-year period beginning on January 1 of each fiscal
year commencing with such
Credit Agreement 40

 

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

 

projections for the period starting on January 1, 2008, substantially in the
same format previously delivered to the Lenders;
     (d) concurrently with the delivery of the financial statements pursuant to
clauses (a) and (b) above, a certificate of a Responsible Officer of the
Borrower substantially in the form of Exhibit G, (i) certifying that, to the
best of such Responsible Officer’s knowledge, no Default then exists or, if any
Default then exists, specifying the nature and period of existence thereof and
what action has been taken or is proposed to be taken with respect thereto, and
(ii) providing all information and calculations necessary for determining
compliance with the covenants contained in Section 7.1;
     (e) copies of such other financial reports filed by any Loan Party with any
Governmental Authority (including any Mexican or other securities exchange) and
which are publicly available which the Administrative Agent (or any Lender
through the Administrative Agent) may from time to time reasonably request;
provided that the information will be furnished in Spanish unless information is
provided publicly in English;
     (f) promptly (and, in any event, within five Business Days) after a
Responsible Officer of the Borrower obtains knowledge of any Default or Event of
Default, a certificate signed by a Responsible Officer of the Borrower,
describing such Default or Event of Default and the steps that the Borrower
proposes to take in connection therewith;
     (g) promptly (and, in any event, within five Business Days) after a
Responsible Officer of the Borrower obtains knowledge thereof, notice of any
litigation, claim, investigation, arbitration or other proceeding pending or, to
such Responsible Officer’s knowledge, threatened in writing against any Loan
Party: (i) that could give rise to a Lien on any of its Properties, other than
Permitted Liens, or (ii) that could reasonably be expected to have a Material
Adverse Effect;
     (h) promptly (and, in any event, within five Business Days) after a
Responsible Officer of the Borrower obtains knowledge thereof, notice of any
other event or development that could reasonably be expected to have a Material
Adverse Effect and the actions proposed to be taken with respect thereto; and
     (i) from time to time, as soon as reasonably practicable, such other
information with respect to the Loan Parties, the Loan Documents and/or the
transactions contemplated hereby or thereby as any Lender (through the
Administrative Agent) or the Administrative Agent may reasonably request.
     The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Joint Lead Arrangers will make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (i) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (ii) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Joint Lead Arrangers and the Lenders to treat such
Credit Agreement 41

 

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

 

Borrower Materials as not containing any material non-public information with
respect to the Borrower or its respective securities for purposes of United
States Federal and state securities laws (provided that to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 11.15); (iii) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (iv) the Administrative Agent and the Joint Lead Arrangers shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated “Public Investor.”
     SECTION 6.3 Use of Proceeds. The Borrower shall use the proceeds of the
Loans: (i) to pay all amounts outstanding under the Existing Credit Agreement
and related fees and expenses, (ii) to pay all amounts outstanding in respect of
the Borrower’s 10 1/4% Senior Notes, (iii) to pay all amounts outstanding under
the Bridge Loan Agreement, (iv) to refinance a portion of the 12 1/2% Senior
Notes or (v) for general corporate purposes.
     SECTION 6.4 Conduct of Business and Maintenance of Existence. Each Loan
Party shall (and shall cause its respective Subsidiaries to) (a) continue to
engage in business of the same general type as now conducted by it or authorized
by its estatutos sociales or by the Concession Title and preserve, renew and
keep in full force and effect its corporate existence, subject to any merger or
consolidation permitted under Section 7.12, and (b) take all reasonable action
to obtain and maintain all rights, privileges, authorizations and franchises
necessary or desirable for the conduct of its business (including, without
limitation, the Concession Title) and comply with all contractual obligations
(including the terms of such Concession Title) binding on it or its Property,
except where the failure to maintain any such rights, privileges, authorizations
or franchises or to comply with contractual obligations, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
     SECTION 6.5 Maintenance of Government Approvals. Each Loan Party shall (and
shall cause its respective Subsidiaries to) maintain in full force and effect
all material governmental licenses, consents, approvals, permits and
authorizations which may be necessary or appropriate under any Applicable Law
for the conduct of its business (including the Concession Title), for the
execution, delivery and performance of this Agreement and the other Loan
Documents by each Loan Party and for the validity or enforceability against it
hereof and thereof, and take all necessary governmental and administrative
action in Mexico to make all payments to be made by it hereunder and thereunder.
The Loan Parties shall file all applications necessary for, and shall use their
best efforts to obtain, any additional authorization as soon as possible after
determination that such authorization or approval is required for any Loan Party
to perform its obligations hereunder or under the other Loan Documents,
including, but not limited to, any filings necessary to obtain payment in
Dollars in respect of any amounts owing hereunder or under the other Loan
Documents.
     SECTION 6.6 Compliance with Laws and Other Instruments. Each Loan Party
shall (and shall cause its respective Subsidiaries to) comply in all material
respects with (a) all Applicable Law (including, without limitation, all
applicable Mexican railroad regulations (including the filing of documents, the
fulfillment of investment requirements and the performance of services as
required in the Concession Title and Applicable Law)) and (b) any of the terms,
covenants, conditions or provisions of any indenture, mortgage, deed of trust,
agreement or other instrument to which such Loan Party (or any Subsidiary of
such Loan Party)
Credit Agreement 42

 

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

 

is a party or by which it is bound or to which it may be subject, except, in
each case, where the necessity of compliance therewith is contested in good
faith by appropriate proceedings or where failure to comply could not reasonably
be expected to have a Material Adverse Effect.
     SECTION 6.7 Maintenance of Property; Insurance. Each Loan Party shall (and
shall cause its respective Subsidiaries to) (a) keep and maintain all Property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain insurance with respect to all
such Property with financially sound, responsible and reputable insurance
companies in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning and/or operating properties
similar to those owned and/or operated by such Loan Party or such Subsidiary, as
the case may be, in the same general areas in which such Loan Party or such
Subsidiary owns and/or operates its properties.
     SECTION 6.8 Maintenance of Books and Records and Inspection Rights. Each
Loan Party shall maintain books, accounts and records in accordance with GAAP.
Each Loan Party shall, and shall cause each of its respective Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior written notice, to visit and inspect its properties (at
the sole expense and risk of the Administrative Agent or such Lender, as the
case may be, with respect to personal injuries that may occur during any such
inspection), to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all during business hours of such Loan Party or such Subsidiary, as
often as reasonably requested; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
     SECTION 6.9 Payment of Obligations. Each Loan Party shall (and shall cause
its Subsidiaries to) pay their obligations, including tax liabilities, that, if
not paid, could reasonably be expected to result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings and such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation, (b) such
Loan Party or any such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
     SECTION 6.10 Environmental Laws. Each Loan Party shall (and shall cause its
respective Subsidiaries to) (a) comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, consents, notifications, authorizations, registrations or permits
required by applicable Environmental Laws, and (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, except in each case where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where failure to comply could not reasonably be expected to have
a Material Adverse Effect.
Credit Agreement 43

 

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

 

     SECTION 6.11 Additional Guarantors. The Borrower shall cause additional
Subsidiaries of the Borrower to accede to this Agreement as Guarantors and agree
to be bound by all such terms and conditions hereof which are applicable to the
Guarantors to the extent necessary to cause the Borrower’s Obligations to be, at
all times until their full satisfaction, Guaranteed by Subsidiaries of the
Borrower that represent, in the aggregate with the Borrower, at least 90% of the
total assets of the Borrower and its Consolidated Subsidiaries, Consolidated
EBITDA and Consolidated Net Income, in each case measured as of the close of
each fiscal quarter of the Borrower and its Consolidated Subsidiaries. In
furtherance of the foregoing undertaking, each such Guarantor shall, within
twenty Business Days after the issuance of the financial statements indicating
the obligation of an additional Subsidiary or Subsidiaries to become an
additional Guarantor(s) hereunder: (a) execute an Accession Agreement
substantially in the form of Exhibit F hereto (an “Accession Agreement”), (b) if
requested by a Lender, sign as guarantor (por aval) the Note(s) of such Lender
and (c) provide to the Administrative Agent favorable opinions of New York
counsel and counsel from the jurisdiction of organization of such Guarantor as
to enforceability and due authorization, respectively, of such Guarantee, and as
to such other matters as the Administrative Agent may reasonably request.
ARTICLE VII
NEGATIVE COVENANTS
     Each of the Loan Parties covenants and agrees that, until the payment in
full of all Obligations, and so long as any Commitment is outstanding:
     SECTION 7.1 Financial Covenants. (a) Consolidated Interest Coverage Ratio.
The Consolidated Interest Coverage Ratio of the Borrower and its Consolidated
Subsidiaries as of the last day of any fiscal quarter of the Borrower shall not
be less than: (i) for each fiscal quarter ending on or before March 31, 2008,
2.25:1x, and (ii) for each fiscal quarter thereafter, 2.50:1x.
     (b) Consolidated Fixed Charge Coverage Ratio. The Consolidated Fixed Charge
Coverage Ratio of the Borrower and its Consolidated Subsidiaries as of the last
day of any fiscal quarter shall not be less than 1.0:1x.
     (c) Consolidated Leverage Ratio. The Consolidated Leverage Ratio of the
Borrower and its Consolidated Subsidiaries, as of the last day of any fiscal
quarter of the Borrower, shall not exceed: (i) for each fiscal quarter ending on
or before March 31, 2008, 3.75:1x, and (ii) for each fiscal quarter thereafter,
3.50:1x.
     (d) The financial covenants set forth in this Section 7.1 shall be
calculated in Dollars and, to the extent any amounts necessary for the
calculation thereof are denominated in a currency other than Dollars, such
amounts shall be converted into Dollars based on (i) the Exchange Rate as of the
close of business on the relevant date (for balance sheet items) and (ii) the
average Exchange Rate for the relevant period (for income statement items).
     SECTION 7.2 Margin Regulations. The Borrower shall not use proceeds of the
Loans hereunder for any purpose which would result in any violation of
Regulations T, U or X of the Board of Governors of the Federal Reserve System or
to extend credit to others for any such purpose. The Borrower will not engage
in, or maintain as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying any margin stock.
Credit Agreement 44

 

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

 

     SECTION 7.3 Limitation on Restricted Payments. None of the Loan Parties,
nor any of their respective Subsidiaries, will declare or make, or otherwise set
apart assets for a sinking or other analogous fund for the making of, any
Restricted Payment to or for the benefit of any Person, except:
     (a) any Restricted Payments made by a Subsidiary of the Borrower to the
Borrower or by any Subsidiary of the Borrower to a Wholly Owned Subsidiary or to
such Subsidiary’s parent corporation which is itself a Subsidiary of the
Borrower; and
     (b) the declaration and payment of dividends (the “Additional Dividends”)
to its shareholders by the Borrower for any fiscal quarter of the Borrower
commencing after March 31, 2008; provided that (i) the amount of the Additional
Dividends shall not exceed an aggregate amount equal to (A) US$20,000,000 plus
50% of Consolidated Net Income accrued on a cumulative basis during the period
(deemed for purposes of this Section 7.3(b) to be one accounting period)
commencing on January 1, 2005 and ending on the last day of the fiscal quarter
immediately preceding the date of declaration of such Additional Dividends (each
such date, a “Dividend Accrual Termination Date”) less (B) the aggregate amount
of any dividends (including Additional Dividends) declared or distributed during
the period beginning on January 1, 2005 and ending on the last day of the fiscal
quarter immediately preceding any such Dividend Accrual Termination Date;
(ii) the Borrower shall have delivered to the Administrative Agent the
applicable financial statements for the fiscal quarter ending on such Dividend
Accrual Termination Date in accordance with Section 6.2; and (iii) as of the
time of the making of such dividend, no Default or Event of Default shall exist
or would exist after the making thereof; provided that any breach of the
covenant set forth in Section 7.1(b) that is attributable solely to the payment
of cash dividends made by the Borrower as set forth in clause (e) of the
definition of “Consolidated Fixed Charges” shall not preclude or otherwise limit
the payment of Additional Dividends under this Agreement and such breach shall
not be deemed a Default or an Event of Default under this Agreement. Any
Additional Dividends payable hereunder shall be payable during the fiscal
quarter in which the date of declaration of such Additional Dividends occurred.
     SECTION 7.4 Limitation on Investments. Each of the Loan Parties shall not
(nor shall any of their respective Subsidiaries) make any Investment in any
Person other than:

  (a)   Investments existing on the Effective Date and set forth on
Schedule 7.4;     (b)   Temporary Cash Investments;     (c)   stock, obligations
or securities received in satisfaction of judgments; and     (d)   Investments
in any Loan Party.

     SECTION 7.5 Optional Payments and Modifications of Certain Debt
Instruments. None of the Loan Parties shall (nor shall any of their respective
Subsidiaries) make or offer to make any optional or voluntary prepayment of any
Indebtedness (other than the Loans hereunder and Indebtedness permitted under
Section 7.9(d) and (e)), except pursuant to a refinancing of Indebtedness
permitted by Section 6.3 or 7.9(h), or amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or other change to,
any of the terms of any existing Indebtedness in a manner that could reasonably
be expected to be materially adverse to the Lenders hereunder (it being
understood that, except in respect of Indebtedness
Credit Agreement 45

 

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

 

permitted under Section 7.9(d) and (e), any amendment to any existing
Indebtedness that purports to shorten the maturity of any of the foregoing,
shall be deemed to be materially adverse to the Lenders).
     SECTION 7.6 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. None of the Loan Parties shall (nor shall any of their
Subsidiaries) create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to (a) pay dividends or make any other distributions permitted by
Applicable Law on any Equity Interests of such Subsidiary owned by such Loan
Party or any other Subsidiary of such Loan Party; (b) pay any Indebtedness owed
to the Borrower or any Subsidiary of the Borrower; (c) make loans or advances to
the Borrower or any Subsidiary of the Borrower; or (d) transfer any of its
Property to the Borrower or any Subsidiary of the Borrower, except for the
following:
     (i) any such encumbrance or restriction existing on the Effective Date and
set forth on Schedule 7.6;
     (ii) any such encumbrance or restriction existing in the Senior Notes
Indentures and any extensions, refinancings, renewals or replacements thereof
permitted by Section 7.9(h); provided that the encumbrances and restrictions in
any such extensions, refinancings, renewals or replacements are no less
favorable in any material respect to the Lenders than those encumbrances or
restrictions that are then in effect and that are being extended, refinanced,
renewed or replaced;
     (iii) any such encumbrance or restriction existing with respect to any
Person or the Property of such Person acquired by such Loan Party or any of its
Subsidiaries, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrance or restriction is not applicable to any
Person or the Property of any Person other than such Person or the Property of
such Person so acquired; or
     (iv) with respect to a Subsidiary, any such encumbrance or restriction
imposed pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Equity Interests or Property of
such Subsidiary not prohibited by any other provision of this Agreement.
     SECTION 7.7 Limitation on Transactions with Affiliates. None of the Loan
Parties shall (nor shall any of their respective Subsidiaries) enter into, renew
or extend any transaction (including, without limitation, the purchase, sale,
lease or exchange of Property, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 5.0% or more of any class of Equity
Interests of such Loan Party or with any Affiliate or Subsidiary of such Loan
Party (other than a Loan Party or Wholly Owned Subsidiary of a Loan Party),
except upon fair and reasonable terms no less favorable to such Loan Party or
such Subsidiary than could be obtained, at the time of such transaction or, if
such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm’s-length
transaction with a Person that is not such a holder, Affiliate or Subsidiary;
provided that the foregoing limitations shall not prevent the Borrower from
selling its 49% equity interest in Mexrail to KCS.
Credit Agreement 46

 

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

 

     SECTION 7.8 Limitation on Liens. None of the Loan Parties shall (nor shall
any of them permit any Subsidiary to) create, incur, assume or suffer to exist
any Lien on any of its respective Properties, whether now owned or hereafter
acquired, except:
     (a) Liens on the Property of any Loan Party (or Subsidiary of a Loan Party)
existing on the Effective Date;
     (b) Liens granted on or after the Effective Date on any Property of a Loan
Party or any Subsidiary created in favor of the Lenders to secure the
Obligations;
     (c) Liens upon Property, other than New Equipment, of any Loan Party or any
Subsidiary of a Loan Party acquired after the Effective Date; provided that
(i) such Liens are created solely for the purpose of securing Indebtedness of
such Loan Party or Subsidiary not in excess of US$10,000,000 in the aggregate
(for all Loan Parties and their Subsidiaries) at any time outstanding which is
incurred to finance the cost (including the cost of improvement, lease or
construction) of the Property subject thereto and such Liens are created prior
to, at the time of or within 90 days after the later of the acquisition, the
completion of construction or the commencement of full operation or the lease of
such Property, (ii) the principal amount of the Indebtedness secured by such
Lien does not exceed 100.0% of such cost and (iii) any such Lien shall not
extend to or cover any Property other than such item of Property and any
improvements on such item;
     (d) Liens securing payment of the Indebtedness (including Capitalized
Leases) of the type permitted and described in clause (i) of Section 7.9;
provided that (i) such Liens are created prior to, at the time of or within
90 days (or 180 days in the case of a sale-leaseback transaction) after the
later of the acquisition, the completion of construction or the commencement of
full operation or the lease of any such New Equipment, (ii) the principal amount
of the Indebtedness secured by such Lien does not exceed 100.0% of the cost of
such New Equipment; and (iii) any such Lien shall not extend to or cover any
Property other than such New Equipment and any improvements on such item.
     (e) Liens on Property of any Person existing at the time such Person
becomes, or becomes a part of, a Subsidiary of a Loan Party;
     (f) Any interest or title of a lessor in the Property, other than New
Equipment, of a Loan Party (or Subsidiary of a Loan Party) subject to any
Capitalized Lease; provided that the aggregate Attributable Debt of such
Capitalized Leases does not exceed US$10,000,000 in the aggregate at any time
outstanding;
     (g) Liens on Property securing Indebtedness of any Loan Party or Subsidiary
of a Loan Party permitted by Section 7.9 in an amount not in excess of
US$5,000,000 in the aggregate (for all Loan Parties and their Subsidiaries); and
     (h) Permitted Liens.
     SECTION 7.9 Limitation on Indebtedness. None of the Loan Parties shall (nor
shall any of them permit any Subsidiary to) create, incur, assume or suffer to
exist Indebtedness except:
     (a) Indebtedness of any Loan Party existing on the Effective Date;
Credit Agreement 47

 

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

 

     (b) Indebtedness secured by Liens permitted by Sections 7.8(c), 7.8(e) and
7.8(f);
     (c) Capitalized Leases of any Loan Party secured by Liens permitted by
Section 7.8(f);
     (d) Indebtedness of any Loan Party or Subsidiary of a Loan Party under Swap
Agreements (excluding equity-based Swap Agreements) entered into in the ordinary
course of business; provided that such Swap Agreements (i) are designed solely
to protect such Loan Party or Subsidiary against the fluctuations in (A) foreign
currency exchange rates, (B) interest rates or (C) rates in respect of fuel
purchases or other acquisitions of fuel in the ordinary course of business and
(ii) do not increase the Indebtedness of any Loan Party or any Subsidiary
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates, interest rates or rates in respect of fuel purchases or
other acquisitions of fuel or by reason of fees, indemnities and compensation
payable thereunder;
     (e) short-term Indebtedness of any Loan Party or Subsidiary of a Loan Party
for working capital purposes, including factoring or other similar arrangements
with respect to current account receivables, not to exceed US$15,000,000 in the
aggregate for all Loan Parties and Subsidiaries at any time outstanding;
     (f) unsecured Indebtedness of any Loan Party or Subsidiary of a Loan Party;
provided that after taking into account the unsecured Indebtedness proposed to
be incurred in accordance with this clause (f) on a pro forma basis), (i) no
Default shall then exist and be continuing or would exist upon the incurrence of
such Indebtedness and (ii) immediately following the incurrence of and giving
effect to such Indebtedness on a pro forma basis as of the last day of the
immediately preceding fiscal quarter, the Borrower would be in compliance with
the financial covenants set forth in Section 7.1;
     (g) other Indebtedness of the Borrower or any Subsidiary of the Borrower
which provides for no amortization of principal on or prior to the Tranche B
Maturity Date and the proceeds of which are used to prepay Loans in accordance
with Section 2.8(a);
     (h) Indebtedness of the Borrower (the “New Indebtedness”) which (i) is
unsecured and incurred to refinance all or any portion of the Senior Notes,
Indebtedness permitted under clause (f) or such unsecured New Indebtedness or
(ii) is incurred to refinance all or any portion of Indebtedness permitted under
clauses (a), (b), (c), (d), (e) and (g) above or such New Indebtedness permitted
under this clause (ii); provided that, in each case under clauses (i) and (ii):
(A) the aggregate principal amount of the New Indebtedness shall be less than or
equal to the sum of (1) the aggregate amount of the Indebtedness (including
principal and accrued interest) being refinanced, (2) the aggregate amount of
unused commitments under the Indebtedness being refinanced, (3) prepayment fees
or premiums, consent fees and/or other costs and expenses directly related to
the Indebtedness being refinanced and (4) reasonable fees, expenses and costs
directly related to the entering into the New Indebtedness; (B) such New
Indebtedness shall have an average weighted maturity equal to or greater than
the average weighted maturity of the Indebtedness so refinanced; and (C) the
terms of the New Indebtedness following such refinancing shall in all other
material respects be no less favorable to the Lenders than such Indebtedness
prior to the refinancing thereof; and
Credit Agreement 48

 

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

 

     (i) Indebtedness of any Loan Party or Subsidiary of a Loan Party incurred
to finance such Person’s acquisition of New Equipment in an aggregate principal
amount not to exceed $300,000,000; provided that the amount of any such
Indebtedness incurred in any calendar year shall not exceed the amount set forth
below opposite such calendar year:

         
2007
  US$ 50,000,000  
2008
  US$ 75,000,000  
2009
  US$ 50,000,000  
2010
  US$ 75,000,000  
2011
  US$ 50,000,000  

; provided, further, that (i) in any such calendar year, any portion of the
aggregate principal amount of such Indebtedness permitted to be incurred in such
calendar year but not incurred in such calendar year may be carried forward to
subsequent calendar years; and (ii) such Indebtedness shall have an average life
of not less than five years and a final maturity of not less than ten years
after the purchase date for the item of New Equipment for which such
Indebtedness was incurred.
     SECTION 7.10 Limitation on Sale-Leaseback Transactions. None of the Loan
Parties shall (nor shall any of them permit any Subsidiary to) enter into any
sale-leaseback transaction involving any Property of any Loan Party or
Subsidiary of a Loan Party, whether now owned or hereafter acquired, whereby
such Loan Party or Subsidiary sells or transfers such Property and then or
thereafter leases such Property or any part thereof or any other Property which
such Loan Party or Subsidiary, as the case may be, intends to use for
substantially the same purpose or purposes as the Property sold or transferred,
except (a) to the extent that the Attributable Debt created under such
sale-leaseback transaction would be permitted pursuant to Section 7.9(c) and
(b) the Borrower or such Subsidiary applies the Net Cash Proceeds received from
any such sale (other than from a sale-leaseback of Property acquired by the
Borrower after the Effective Date which is concluded within 180 days following
the date of the acquisition of such Property) to prepay the Loans in accordance
with, and to the extent required by, Section 2.8(a).
     SECTION 7.11 Limitation on Asset Sales. None of the Loan Parties shall (nor
shall any of them permit any Subsidiary to) consummate any Asset Sale, except:
     (a) sales of obsolete, surplus, used (with material impairment of value or
utility), defunct, damaged or worn-out Property in the ordinary course of
business;
     (b) sales of inventory in the ordinary course of business;
     (c) sales of current accounts receivable pursuant to factoring or similar
working capital financing arrangements permitted by Section 7.9(e);
     (d) any Asset Sale to a Loan Party;
Credit Agreement 49

 

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

 

     (e) any Asset Sale of Property as part of a sale-leaseback transaction
where all such Property was acquired by the Borrower after the Effective Date
and where such sale-leaseback transaction is concluded within 180 days following
the date of the acquisition of such Property; and
     (f) any other Asset Sales if (i) the consideration received by the Loan
Party or such Subsidiary is at least equal to the fair market value of the
assets sold or disposed of; (ii) at least 70.0% of the consideration received
consists of cash or Temporary Cash Investments; and (iii) the Net Cash Proceeds
of such Asset Sale are applied in accordance with Section 2.8(a); provided that
in no event shall any Loan Party or any Subsidiary enter into any Asset Sale
with respect to future accounts receivables to be generated by it; and provided
further, that clauses (i) and (ii) shall not apply to a sale of the Borrower’s
49% equity interest in Mexrail to KCS.
     SECTION 7.12 Consolidation, Merger and Sale of Assets. None of the Loan
Parties shall (nor shall any of them permit any Subsidiary to) consolidate with,
merge with or into, or sell, convey, transfer, lease or otherwise dispose of all
or substantially all of its Property (as an entirety or substantially an
entirety in one transaction or a series of related transactions) to, any Person
or permit any Person to merge with or into any Loan Party or any Subsidiary,
except that (provided that no Default exists immediately before or would exist
immediately after any of the following):
     (a) any Subsidiary of a Loan Party may be merged or consolidated with or
into such Loan Party (provided that such Loan Party shall be the continuing or
surviving corporation) or with or into any Wholly Owned Subsidiary of such Loan
Party (provided that the Wholly Owned Subsidiary shall be the continuing or
surviving corporation);
     (b) any Subsidiary may dispose of any or all of its Property (i) to a Loan
Party or any Wholly Owned Subsidiary of such Loan Party (upon voluntary
liquidation or otherwise) or (ii) pursuant to a disposition permitted by
Section 7.11 and in a transaction not otherwise prohibited by any provision of
this Agreement; and
     (c) Arrendadora and the Borrower may merge or consolidate with or into, or
sell or transfer all or substantially all of its Property to, each other;
provided that the Borrower is the entity surviving such merger or consolidation
or the entity to which such Property has been so sold or transferred.
     SECTION 7.13 Lines of Business. None of the Loan Parties shall (nor shall
any of them permit any Subsidiary to) enter into any business, either directly
or through any Subsidiary, except for those businesses in which such Loan Party
or Subsidiary is engaged on the date of this Agreement or that are reasonably
related thereto.
ARTICLE VIII
EVENTS OF DEFAULT
     SECTION 8.1 Events of Default. The following specified events shall be
“Events of Default” for the purposes of this Agreement:
     (a) (i) Any payment of any principal of the Loans shall not be made in full
when due, or (ii) the Borrower shall default for three Business Days or more in
the payment of interest on
Credit Agreement 50

 

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

 

the Loans (or any amounts payable pursuant to Section 3.1(a)) or (iii) any Loan
Party shall default for ten calendar days or more in the payment of any other
amount whatsoever payable (or to be deposited) under the Loan Documents; or
     (b) Any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished at any time pursuant to or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect on or as of the date made or deemed made;
or
     (c) Any Loan Party shall default in the observance or performance of any
covenant contained in Sections 6.1, 6.2(f), 6.3, 6.4(a) or Article VII of this
Agreement; or
     (d) Any Loan Party shall default in the observance or performance of any
other covenant or agreement contained in any Loan Document to which it is a
party (other than as provided in clauses (a), (b) and (c)), and such default
shall continue unremedied for a period of 30 days or more after written notice
to the Borrower from the Administrative Agent; or
     (e) Any Loan Party shall (i) default in any payment of principal of or
interest on any Indebtedness outstanding in an aggregate principal amount of at
least US$10,000,000 (or the equivalent thereof in another currency) (other than
the Loans and any other amounts owed under the Loan Documents), including in the
payment of any Guarantee of such Indebtedness, beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, in each case beyond any applicable grace
period or cure period, the effect of which default or other event or condition
is to cause, or to permit the holder or holders of such Indebtedness, including
the beneficiary or beneficiaries of any Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness (or, with respect to a Guarantee, the Indebtedness that is the
subject matter of such Guarantee) to become due prior to its stated maturity; or
     (f) (i) Any Loan Party shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, concurso mercantil, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) in any jurisdiction seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its Property, or any Loan
Party shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Loan Party in any jurisdiction any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) to the extent applicable, remains undismissed,
undischarged, unbonded or is not stayed for a period of 60 days; or (iii) there
shall be commenced against any Loan Party in any jurisdiction any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its Property which results in the entry of an
Credit Agreement 51

 

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

 

order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) any Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or (v) any Loan Party shall admit in writing its
inability to pay its debts as they become due; or
     (g) One or more judgments, orders, decrees, awards, settlements and/or
agreements to settle (including any relating to any arbitration), shall be
entered against any Loan Party in any jurisdiction involving in the aggregate a
liability (not paid or substantially covered by insurance) of US$10,000,000 (or
an amount in another currency equivalent thereto) or more, and shall not have
been vacated, discharged, stayed or bonded pending appeal within 90 days from
the entry thereof; or
     (h) Any Governmental Authority shall (i) condemn, nationalize, seize or
otherwise expropriate any substantial portion of the Property or the capital
stock of any Loan Party and such action is not reversed within a period of
60 days or (ii) take any action that would prevent any Loan Party from carrying
on, or would have a material adverse effect on, the rights conferred on the
Borrower under, or the material terms of, the Concession Title, including any
action that would result in the Concession Title ceasing to grant the Borrower
the rights originally provided therein or the Concession Title being terminated
or the rights originally provided therein as exclusive to the Borrower becoming
non-exclusive; or
     (i) A Change of Control shall occur; or
     (j) The validity of any Loan Document shall be contested by any Loan Party
or any Governmental Authority or any Loan Party shall deny liability under any
Loan Document to which it is a party or any Loan Document shall for any reason
be terminated or become invalid, ineffective or unenforceable; provided that, in
the case of any contest by a Governmental Authority, such contest is not
dismissed within a period of 75 days; or
     (k) Any governmental or other authorization, consent, license, permit,
concession, approval (including any foreign exchange approval) or authorization
which is necessary or appropriate under any Applicable Law for the execution,
delivery or performance by any Loan Party of any material obligation under any
Loan Document to which it is a party or to make any Loan Document legal, valid,
enforceable and admissible in evidence shall not be obtained or shall be
withdrawn or shall cease to be in full force and effect or shall be modified in
a manner which, in each case, could reasonably be expected to have a Material
Adverse Effect; or
     (l) Any restriction or requirement not in effect on the Effective Date is
imposed, whether by legislative enactment, decree, regulation, order or
otherwise, which limits the availability or the transfer of foreign exchange by
any Loan Party in a manner that would reasonably be expected to materially
adversely affect the payment of such Loan Party’s obligations under any Loan
Document to which it is a party.
     SECTION 8.2 Remedies. (a) If any Event of Default under Section 8.1(f) has
occurred and is continuing, automatically the Commitments shall immediately
terminate and the Loans, together with accrued interest thereon and any fees and
all other Obligations accrued hereunder, under the Notes and under all other
Loan Documents shall immediately become due and payable.
Credit Agreement 52

 

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

 

     (b) If any Event of Default other than under Section 8.1(f) has occurred
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Majority Lenders, declare: (i) the Commitments to be
terminated immediately, whereupon the Commitments shall immediately terminate,
and/or (ii) the principal amount of the Loans to be forthwith due and payable,
whereupon such principal amount, together with accrued interest thereon and any
fees and all other Obligations accrued hereunder, under the Notes and under all
other Loan Documents, shall become immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived.
ARTICLE IX
GUARANTEE
     SECTION 9.1 Guarantees. (a) For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and to induce the
Lenders to enter into this Agreement, each of the Guarantors, jointly and
severally, hereby absolutely, unconditionally and irrevocably Guarantees the
full and punctual payment and performance (whether at stated maturity, upon
acceleration or otherwise) of all Obligations, in each case as primary obligor
and not merely as surety and with respect to all such Obligations howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due (collectively,
the “Guaranteed Obligations”). This is a guarantee of payment and not merely of
collection.
     (b) All Guaranteed Obligations shall be payable in the manner required for
payments by the Borrower hereunder, including: (i) the obligation to make all
such payments in Dollars, free and clear of, and without deduction for, any
Taxes, and (ii) the obligation to pay interest at the Default Rate where
applicable.
     SECTION 9.2 Guarantees Unconditional. The Guaranteed Obligations shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
     (a) any extension, renewal, settlement, compromise, waiver or release in
respect of any Obligation of a Loan Party under the Loan Documents and/or any
Commitment(s) under the Loan Documents, by operation of law or otherwise (other
than with respect to any such extension, renewal, settlement, compromise, waiver
or release agreed in accordance with the terms hereunder as expressly applying
to the obligations of the Guarantors under this Article IX);
     (b) any modification or amendment of or supplement to this Agreement or any
other Loan Document (other than with respect to any modification, amendment or
supplement agreed in accordance with the terms hereunder as expressly applying
to the obligations of the Guarantors under this Article IX);
     (c) any change in the corporate existence, structure or ownership of the
Borrower or any other Person, or any event of the type described in
Section 8.1(f) with respect to any Person;
     (d) the existence of any claim, set-off or other rights that any Guarantor
may have at any time against the Borrower, the Administrative Agent or any other
Person, whether in connection herewith or with any unrelated transactions;
Credit Agreement 53

 

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

 

     (e) any invalidity or unenforceability relating to or against any Loan
Party for any reason of any Loan Document, or any Applicable Law purporting to
prohibit the performance by any Loan Party of any of its Obligations (other than
any such invalidity or unenforceability with respect solely to the obligations
of the Guarantors under this Article IX); or
     (f) any other act or omission to act or delay of any kind by any Loan
Party, the Administrative Agent or any other Person or any other circumstance
whatsoever that might, but for the provisions of this Section 9.2, constitute a
legal or equitable discharge of the obligations of any Loan Party under the Loan
Documents.
     SECTION 9.3 Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances. The obligations of the Guarantors hereunder shall remain in full
force and effect until all of the Borrower’s Obligations under the Loan
Documents shall have been paid or otherwise performed in full and all of the
Commitments shall have terminated. If at any time any payment made under this
Agreement or any other Loan Document is rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, concurso mercantil, reorganization,
insolvency, custodianship, liquidation, receivership, dissolution, winding up or
relief of debtors or similar event of a Loan Party or any other Person or
otherwise, then the obligations of the Guarantors hereunder with respect to such
payment shall be reinstated at such time as though such payment had been due but
not made at such time.
     SECTION 9.4 Waiver by the Guarantors. (a) Each of the Guarantors hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
Applicable Law: (i) notice of acceptance of the Guarantee provided in this
Article IX and notice of any liability to which this Guarantee may apply,
(ii) all notices that may be required by Applicable Law or otherwise to preserve
intact any rights of any Beneficiary against any Loan Party, including any
demand, presentment, protest, proof of notice of non-payment, notice of any
failure on the part of any Loan Party to perform and comply with any covenant,
agreement, term, condition or provision of any agreement and any other notice to
any other party that may be liable in respect of the Obligations Guaranteed
hereby (including any Loan Party) except any of the foregoing as may be
expressly required hereunder, (iii) any right to the enforcement, assertion or
exercise by any Beneficiary of any right, power, privilege or remedy conferred
upon such Person under the Loan Documents or otherwise, (iv) any requirement
that any Beneficiary exhaust any right, power, privilege or remedy, or exhaust
or apply any assets of the Borrower or any other Guarantor or mitigate any
damages resulting from a default, under any Loan Document, or against any Loan
Party or any other Person under or in respect of any Loan Document or otherwise
(including any requirement that any action be initiated and/or completed against
the Borrower prior to any action being initiated against any Guarantor), and
(v) any requirement that claims or liabilities be divided among Guarantors.
     (b) Each of the Guarantors expressly acknowledges that the Guarantee
provided in this Article IX is governed by the laws of the State of New York and
expressly agrees that any rights and privileges that it might otherwise have
under the laws of Mexico shall not be applicable to this Guarantee, including,
but not limited to, any benefit of orden, excusión, división, quita, novación,
espera and modificación which may be available to it under articles 2813, 2814,
2815, 2817, 2818, 2820, 2821, 2822, 2823, 2827, 2836, 2840, 2842, 2845, 2846,
2847, 2848, 2849 or any other applicable articles of the Federal Civil Code of
Mexico and the
Credit Agreement 54

 

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

 

corresponding articles under the Civil Code in effect for the Federal District
of Mexico and in all other states of Mexico.
     SECTION 9.5 Subrogation. Upon any Guarantor’s making payment under this
Article IX, the payor shall be subrogated to the rights of the payee against the
Borrower with respect to such obligation; provided that such Guarantor shall not
enforce any payment by way of subrogation, indemnity, contribution or otherwise,
or exercise any other right, against the Borrower or any other Loan Party (or
otherwise benefit from any payment or other transfer arising from any such
right) so long as any Obligations under the Loan Documents remain unpaid and/or
unsatisfied.
     SECTION 9.6 Stay of Acceleration. If acceleration of the time for payment
of any amounts payable under the Loan Documents is stayed due to any event
described in Section 8.1(f), then all such amounts otherwise subject to
acceleration under this Agreement shall nonetheless be payable by the Guarantors
hereunder immediately upon demand by the Administrative Agent.
ARTICLE X
THE ADMINISTRATIVE AGENT
     SECTION 10.1 Appointment and Authority. Each of the Lenders hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders, and neither the Borrower nor any other
Loan Party shall have rights as a third party beneficiary of any of such
provisions.
     SECTION 10.2 Rights as a Lender. Each Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include each
Person serving as the Administrative Agent hereunder in its individual capacity.
Such Person and its Affiliates may accept deposits from, lend money to, act as
the financial advisor or in any other advisory capacity for and generally engage
in any kind of business with any Loan Party or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
     SECTION 10.3 Exculpatory Provisions. The Administrative Agent shall not
have any duties or obligations except those expressly set forth herein and in
the other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
     (a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
     (b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in
Credit Agreement 55

 

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

 

writing by the Majority Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan
Documents); provided that the Administrative Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or
Applicable Law; and
     (c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, or be liable for the failure to disclose,
any information relating to any of the Loan Parties or any of their respective
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.
     The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Majority Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 8.2 and 11.3) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
not be deemed to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by a Loan Party or
a Lender.
     The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
     SECTION 10.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan that by its terms must be fulfilled to the
satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received notice to the contrary from such Lender prior to the making of
such Loan. The Administrative Agent may consult with legal counsel (who may be
counsel for any Loan Party), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
     SECTION 10.5 Delegation of Duties. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document
Credit Agreement 56

 

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

 

by or through any one or more sub-agents appointed by the Administrative Agent.
The Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as the Administrative Agent.
     SECTION 10.6 Resignation of Administrative Agent. The Administrative Agent
may at any time give notice of its resignation to the Lenders and the Borrower.
Upon receipt of any such notice of resignation, the Majority Lenders shall have
the right, in consultation with the Borrower, to appoint a successor, which
shall be a bank with an office (or a subsidiary) in the United States, or an
Affiliate of any such bank with an office (or a subsidiary) in the United
States. If no such successor shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders or appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that
if the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender directly, until
such time as the Majority Lenders appoint a successor Administrative Agent as
provided for above in this Section 10.6. Upon the acceptance of a successor’s
appointment as the Administrative Agent hereunder, such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section 10.6). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.2 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
the Administrative Agent.
     SECTION 10.7 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
Credit Agreement 57

 

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

 

     SECTION 10.8 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Joint Lead Arrangers shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent or a Lender.
     SECTION 10.9 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, concurso mercantil, quiebra, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made the demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
     (a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Beneficiaries (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Beneficiaries and their respective agents and counsel and all other amounts
due to the Beneficiaries under Sections 2.12 and 11.2) allowed in such judicial
proceeding; and
     (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Beneficiary to make such payments to the Administrative Agent and, in the
event that the Administrative Agent shall consent to the making of such payments
directly to the Beneficiaries, to pay to the Administrative Agent any amount due
for the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.12 and 11.2.
     Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, concurso mercantil, quiebra, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
ARTICLE XI
MISCELLANEOUS
     SECTION 11.1 Financial Data. Except as otherwise provided herein, financial
data required hereby shall be prepared both as to classification of items and as
to amount in accordance with GAAP.
     SECTION 11.2 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses.
Each Loan Party agrees, jointly and severally, to pay (i) all reasonable out of
pocket expenses incurred by the Administrative Agent and its respective
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent and all fees, charges and disbursements), in
connection with the syndication of the credit facilities provided for herein,
the
Credit Agreement 58

 

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

 

preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out of pocket
expenses incurred by the Administrative Agent or any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender), and shall pay all fees and time charges for attorneys who may be
employees of the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section 11.2, or
(B) in connection with the Loans made hereunder, including all such out of
pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans.
     (b) Indemnification. Each Loan Party agrees, jointly and severally, to
indemnify the Administrative Agent (and any sub-agent thereof) and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee and of
attorneys who may be employees of any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Loan Party (or any of their respective Related Parties) arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use
of the proceeds thereof, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Loan Party
or any of its Subsidiaries, or any Environmental Liability related in any way to
any Loan Party or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party (or any of their respective
Related Parties), and regardless of whether any Indemnitee is a party thereto,
in all cases, whether or not caused by or arising, in whole or in part, out of
the comparative, contributory or sole negligence of the Indemnitee; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (A) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (B) result from a claim brought by the Borrower or any other
Loan Party against an Indemnitee for a material breach of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower or such
other Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.
     (c) Reimbursement by Lenders. To the extent that any Loan Party for any
reason fails to indefeasibly pay any amount required under clause (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of the Administrative Agent, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender’s ratable share
Credit Agreement 59

 

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

 

(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of the
Administrative Agent acting for the Administrative Agent (or any such sub-agent)
in connection with such capacity. The obligations of the Lenders under this
clause (c) are subject to the provisions of Section 2.4.
     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by Applicable Law, no Loan Party shall assert, and each Loan Party hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Indemnitee referred to in clause (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
     (e) Payments. All amounts due under this Section 11.2 shall be payable not
later than ten Business Days after demand therefor.
     (f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent, the replacement of any Lender, the termination of
the Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
     SECTION 11.3 Amendments and Waivers, Etc. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent to any
departure by the Borrower or any other Loan Party therefrom, shall be effective
unless in writing signed by the Majority Lenders and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no such amendment, waiver or consent shall:
     (a) waive any condition set forth in Section 4.1(a) without the written
consent of each Lender;
     (b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.2) without the written consent of
such Lender;
     (c) postpone any date fixed by this Agreement or any other Loan Document
for any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
     (d) reduce the principal of, or the rate of interest specified herein on,
any Loan or (subject to clause (ii) of the second proviso to this Section 11.3)
any fees or other amounts payable hereunder or under any Note, or change the
manner of computation of any financial ratio
Credit Agreement 60

 

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

 

(including any change in any applicable defined term) used in determining the
Applicable Margin that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided that only the consent of the Majority
Lenders shall be necessary to amend the definition of “Default Rate” or to waive
any obligation of the Borrower to pay interest at the Default Rate;
     (e) change Section 2.13 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender;
     (f) change any provision of this Section, the definition of “Majority
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder without the written
consent of each Lender; or
     (g) release any Guarantor from its Guarantee hereunder without the written
consent of each Lender;
and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Fee Letters may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
     SECTION 11.4 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S CONFLICT OF LAWS
PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
     SECTION 11.5 Notices; Effectiveness; Electronic Communication. (a) Notices
Generally. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in clause (b) below),
all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
     (i) if to the Borrower, Arrendadora or the Administrative Agent, to the
address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 11.5;
     (ii) if to a Guarantor that enters into an Accession Agreement, to the
address, telecopier number, electronic mail address or telephone number
specified in such Accession Agreement; and
Credit Agreement 61

 

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

 

     (iii) if to any Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in clause (b) below, shall be effective as provided in such clause (b).
     (b) Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or any
Loan Party may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
     Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES DO NOT WARRANT THE ACCURACY
OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent
or any of its Related Parties have any liability to any Loan Party, any Lender
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any Loan Party’s or
the Administrative Agent’s transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the Administrative Agent or any of its Related Parties;
Credit Agreement 62

 

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

 

provided that in no event shall the Administrative Agent or any Related Parties
have any liability to any Loan Party, any Lender or any other Person for
indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).
     (d) Change of Address, Etc. Each of the Loan Parties and the Administrative
Agent may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto. Each
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.
     (e) Reliance by the Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
purportedly given by or on behalf of any Loan Party even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
Each Loan Party agrees, jointly and severally, to indemnify the Administrative
Agent and each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Loan Party. All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
     SECTION 11.6 Table of Contents; Headings. The table of contents and
captions and section headings appearing herein are inserted for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
     SECTION 11.7 Survival. All representations and warranties made hereunder
and in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of
any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Loan, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Commitment shall remain
outstanding. The obligations of the Borrower under Sections 3.1(b), 3.3, 3.4,
and 11.2 and the obligations of the Lenders under Section 11.2(c) shall survive
the repayment of the Loans and the termination of the Commitments and, in the
case of any Lender that may assign any interest in its Commitment or Loan
hereunder, shall survive the making of such assignment with respect to the
assigning Lender, notwithstanding that such assigning Lender may cease to be a
“Lender” hereunder; provided that any Lender’s obligations under Section 11.2(c)
shall only apply to the extent that the event with respect to which any
indemnification is payable thereunder occurred at the time that such Lender
maintained a Loan or Commitment hereunder.
Credit Agreement 63

 

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

 

     SECTION 11.8 Successors and Assigns. (a) Successors and Assigns Generally.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that no Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer all or any portion of its rights or obligations hereunder except (i) to
an Eligible Assignee in accordance with the provisions of clause (b), (ii) by
way of participation in accordance with the provisions of clause (d), or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of clause (f) (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in clause (d) and, to the extent expressly contemplated
hereby, the Related Parties of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
     (b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that:
     (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than, (A) with respect to
Tranche A Loans, US$5,000,000 and (B) with respect to Tranche B Loans,
US$1,000,000, in each case unless the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); provided that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;
     (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned;
     (iii) any assignment of a Commitment or a Tranche A Loan must be approved
by the Administrative Agent (which approval shall not be unreasonably withheld
or delayed) unless the Person that is the proposed assignee is itself a Lender
or an Affiliate of a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and
Credit Agreement 64

 

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

 

     (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount of US$3,500 and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to clause (c), from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.1, 3.3, 3.4 and 11.2 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this clause (b) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with clause (d).
     (c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement and the other Loan
Documents, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower at any reasonable time and from time to
time upon reasonable prior notice. In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is pending,
any Lender may request and receive from the Administrative Agent a copy of the
Register.
     (d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or any Loan Party or any Loan Party’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Loan Parties, the Administrative
Agent and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such 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 such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso
Credit Agreement 65

 

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

 

to Section 11.3 that affects such Participant. Subject to clause (e), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.3 and 3.4 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to clause (b). To the extent
permitted by Applicable Law, each Participant also shall be entitled to the
benefits of Section 2.14(a) as though it were a Lender if such Participant
agrees to be subject to Section 2.14(b) as though it were a Lender.
     (e) Limitation upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.1 or 3.3 than the applicable
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.
     (f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note(s), if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
     (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any Applicable Law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
     SECTION 11.9 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by Applicable Law (the “Maximum Rate”). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by Applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
     SECTION 11.10 Submission to Jurisdiction; Venue; Service; Waiver of Jury
Trial.
     (a) EACH OF THE PARTIES HERETO (AND ITS SUCCESSORS AND ASSIGNS) (i) AGREES
THAT ANY CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT BY ANY PARTY OR SUCCESSOR
THERETO ARISING OUT OF OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
(IN EACH
Credit Agreement 66

 

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

 

CASE LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY), TO THE JURISDICTION
OF ANY COMPETENT COURT IN THE PLACE OF ITS CORPORATE DOMICILE IN RESPECT OF
ACTIONS BROUGHT AGAINST IT AS A DEFENDANT AND TO APPELLATE COURTS THEREFROM AND
EACH OF THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO SUCH JURISDICTION FOR SUCH PURPOSE AND (ii) TO THE FULLEST EXTENT
PERMITTED BY LAW, (A) IRREVOCABLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN ANY SUCH COURT,
(B) IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(C) IRREVOCABLY WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT AND (D) IRREVOCABLY WAIVES ANY RIGHT TO WHICH IT MAY BE
ENTITLED ON ACCOUNT OF PLACE OF RESIDENCE OR DOMICILE. EACH OF THE PARTIES
HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ALL RIGHTS OF JURISDICTION IN ANY
SUCH ACTION OR PROCEEDING, WHICH IT MAY NOW OR HEREAFTER BE AFFORDED BY LAW, IN
ANY OTHER FORUM. EACH OF THE PARTIES HERETO FURTHER AGREES THAT A FINAL JUDGMENT
IN ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY MANNER PROVIDED BY LAW.
     (b) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
     (c) FOR THE PURPOSE OF PROCEEDINGS IN THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (IN
EACH CASE LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY), EACH LOAN PARTY
HEREBY IRREVOCABLY DESIGNATES AS OF THE EFFECTIVE DATE CT CORPORATION SYSTEM
(“PROCESS AGENT”) WITH OFFICES CURRENTLY LOCATED AT 111 EIGHTH AVENUE, NEW YORK,
NEW YORK 10011 AS ITS AGENT FOR SERVICE OF PROCESS. IN THE EVENT THAT SUCH AGENT
OR ANY SUCCESSOR SHALL CEASE TO BE LOCATED IN THE BOROUGH OF MANHATTAN, EACH
LOAN PARTY SHALL PROMPTLY AND IRREVOCABLY BEFORE THE RELOCATION OF SUCH AGENT
FOR SERVICE OF
Credit Agreement 67

 

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

 

PROCESS, IF PRACTICABLE, OR PROMPTLY THEREAFTER DESIGNATE A SUCCESSOR AGENT,
WHICH SUCCESSOR AGENT SHALL BE LOCATED IN THE BOROUGH OF MANHATTAN, AND NOTIFY
THE ADMINISTRATIVE AGENT THEREOF, TO ACCEPT ON ITS BEHALF SERVICE OF ANY AND ALL
PROCESS OR OTHER DOCUMENTS WHICH MAY BE SERVED IN ANY ACTION OR PROCEEDING IN
ANY OF SUCH COURTS AND FURTHER AGREES THAT SERVICE UPON SUCH AGENT SHALL
CONSTITUTE VALID AND EFFECTIVE SERVICE UPON EACH SUCH LOAN PARTY AND THAT
FAILURE OF ANY SUCH AGENT TO GIVE ANY NOTICE OF SUCH SERVICE TO SUCH LOAN PARTY
SHALL NOT AFFECT THE VALIDITY OF SUCH SERVICE OR ANY JUDGMENT RENDERED IN ANY
ACTION OR PROCEEDING BASED THEREON. EACH OF THE PARTIES HERETO AGREES THAT
SERVICE OF ANY AND ALL SUCH PROCESS OR OTHER DOCUMENTS ON SUCH PERSON MAY ALSO
BE EFFECTED BY REGISTERED MAIL TO ITS ADDRESS AS SET FORTH IN SECTION 11.5 OR
SCHEDULE 11.5. WITH RESPECT TO EACH LOAN PARTY, SERVICE OF ANY AND ALL SUCH
PROCESS OR OTHER DOCUMENTS TO THE PROCESS AGENT OR SUCH OTHER AGENT FOR SERVICE
OF PROCESS DESIGNATED BY SUCH LOAN PARTY IN ACCORDANCE WITH THIS AGREEMENT SHALL
CONSTITUTE VALID AND EFFECTIVE SERVICE ONLY IF MADE IN PERSON TO THE PROCESS
AGENT OR SUCH OTHER AGENT FOR SERVICE OF PROCESS.
     SECTION 11.11 Judgment Currency. All payments made under this Agreement and
the Notes shall be made in Dollars (to the extent required by the terms hereof,
the applicable “Agreement Currency”), as applicable, and, if for any reason any
payment made hereunder or under any Note is made in a currency (the “Other
Currency”) other than the applicable Agreement Currency, then to the extent that
the payment actually received by the relevant Beneficiary, when converted into
the applicable Agreement Currency at the Rate of Exchange (as defined below) on
the date of payment (or, if conversion on such date is not practicable, as soon
thereafter as it is practicable for such Beneficiary to purchase the applicable
Agreement Currency) falls short of the amount due under the terms of this
Agreement or any Note, the Loan Parties shall, as a separate and independent
obligation of the Loan Parties, indemnify such Beneficiary and hold such
Beneficiary harmless against the amount of such shortfall. As used in this
Section 11.11, the term “Rate of Exchange” means the rate at which the
Beneficiary is able on the relevant date to purchase the applicable Agreement
Currency with the Other Currency and shall include any premiums and costs of
exchange payable in connection with the purchase of or conversion into, the
applicable Agreement Currency.
     SECTION 11.12 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.
     SECTION 11.13 Waiver of Immunities. To the extent that any Loan Party has
or hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its Property, such Loan Party hereby irrevocably waives such immunity in
respect of its obligations under this Agreement and the other Loan Documents.
The foregoing waiver is intended to be effective to the fullest extent now or
hereafter permitted by Applicable Law.
Credit Agreement 68

 

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

 

     SECTION 11.14 Severability. To the fullest extent permitted by law, any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction, and the remaining portion of such provision and all
other remaining provisions hereof will be construed to render them enforceable.
     SECTION 11.15 Treatment of Certain Information; Confidentiality. The
Administrative Agent and each of the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and be required to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by Applicable Laws or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement with
each Person receiving the Information containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, any Lender,
or any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower.
     For purposes of this Section, “Information” means all information received
from any Loan Party or any Subsidiary relating to any Loan Party or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by such Loan Party or Subsidiary;
provided that, in the case of information received from a Loan Party or any
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
     The Administrative Agent and each of the Lenders acknowledges that (a) the
Information may include material non-public information concerning a Loan Party
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with Applicable Law, including
Federal and state securities laws.
     SECTION 11.16 No Waiver; Remedies. No failure on the part of the
Administrative Agent or any of the Lenders to exercise, and no delay in
exercising, any right hereunder shall
Credit Agreement 69

 

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

 

operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
     SECTION 11.17 Entire Agreement. As of the Effective Date, this Agreement
and the other Loan Documents (including the Fee Letters with respect to the
matters covered thereby) constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
     SECTION 11.18 USA PATRIOT Act. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Credit Agreement 70

 

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

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

                  KANSAS CITY SOUTHERN DE MÉXICO, S.A. DE C.V., as the Borrower
   
 
           
 
  By:       /s/ Paul J. Weyandt
 
Name: Paul J. Weyandt    
 
      Title: Treasurer & Attorney-in-Fact    
 
                ARRENDADORA KCSM, S.A. DE C.V.,            as the Guarantor    
 
           
 
  By:      /s/ Paul J. Weyandt    
 
           
 
      Name: Paul J. Weyandt    
 
      Title: Treasurer & Attorney-in-Fact    

Credit Agreement Exhibit S - 1

 

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

 

                  BANK OF AMERICA, N.A.,            as the Administrative Agent
   
 
           
 
  By:      /s/ Robert Rittelmeyer
 
Name: Robert Rittelmeyer    
 
      Title: Vice President    

Credit Agreement Exhibit S - 2

 

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

 

                  LENDERS:    
 
               
BBVA BANCOMER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO BBVA
BANCOMER, GRAND CAYMAN BRANCH
   
 
           
 
  By:      /s/ Leonardo Sanchez Espejel
 
Name: Leonardo Sanchez Espejel    
 
      Title: Director – Banca Corporativa    
 
           
 
  By:      /s/ Juan Alberto Vazquez Chaholla    
 
           
 
      Name: Juan Alberto Vazquez Chaholla    
 
      Title: Director – Banca Corporativa    
 
                Lending Office: Grand Cayman, Cayman Islands    

Credit Agreement Exhibit S - 3

 

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

 

                  BANK OF AMERICA, N.A.    
 
           
 
  By:      /s/ Gerardo Obregon
 
Name: Gerardo Obregon Title: Attorney-in-Fact    
 
                Lending Office: Concord, California, United States of America  
 

Credit Agreement Exhibit S - 4

 

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

 

                  EXPORT DEVELOPMENT CANADA    
 
           
 
  By:      /s/ Karen Morandin
 
Name: Karen Morandin    
 
      Title: Financing Manager    
 
           
 
  By:       /s/ Marc Blondin    
 
           
 
      Name: Marc Blondin    
 
      Title: Financing Manager    
 
                Lending Office: Ottawa, Ontario, Canada    

Credit Agreement Exhibit S - 5

 

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

 

                  KFW    
 
           
 
  By:       /s/ Martin Kloster
 
Name: Martin Kloster    
 
      Title: First Vice President    
 
           
 
  By:       /s/ Irmela Ginkel    
 
           
 
      Name: Irmela Ginkel    
 
      Title: Senior Project Manager    

Credit Agreement Exhibit S - 6

 

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

 

                  BANK OF MONTREAL    
 
           
 
  By:      /s/ William Thomson
 
Name: William Thomson    
 
      Title: Vice President    
 
           
 
  By:          
 
           
 
      Name:    
 
      Title:    
 
                Lending Office: Chicago, Illinois, United States of America    

Credit Agreement Exhibit S - 7

 

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

 

                  THE BANK OF NOVA SCOTIA    
 
           
 
  By:      /s/ R.V. Finlay
 
Name: R.V. Finlay    
 
      Title: Managing Director    
 
           
 
  By:          
 
           
 
      Name:    
 
      Title:    

Credit Agreement Exhibit S - 8

 

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

 

                  COMERICA BANK    
 
           
 
  By:      Mark F. Layton
 
Name: Mark F. Layton    
 
      Title: Vice President    
 
           
 
  By:          
 
           
 
      Name:    
 
      Title:    
 
                Lending Office: Detroit, Michigan, United States of America    

Credit Agreement Exhibit S - 9