STOCK PURCHASE AGREEMENT

                                    BY AND AMONG


                               KANSAS CITY SOUTHERN,
                              a Delaware corporation,

                                GRUPO TMM, S.A.,
                                 a sociedad anonima
             organized under the laws of the United Mexican States,

                                 TFM, S.A. de C.V.,
                       a sociedad anonima de capital variable
             organized under the laws of the United Mexican States,





<PAGE>


                                Table of Contents

ARTICLE I. PURCHASE AND SALE OF TRANSFERRED SHARES...........................2
  1.1 Purchase and Sale.  ...................................................2
  --- -----------------
  1.2 The Initial Closing.  .................................................2
  --- -------------------
  1.3 Purchase Price.  ......................................................2
  --- --------------
  1.4 Purchase Option  ......................................................2
  ---
  1.5 Deliveries at Closing.  ...............................................2
  --- ---------------------
  1.6 Voting Trust.  ........................................................2
  --- ------------
ARTICLE II. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION........2
  2.1 Representations and Warranties of GTMM and TFM.  ......................2
  --- ----------------------------------------------
  2.2 Representations and Warranties of KCS.  ...............................3
  --- -------------------------------------
ARTICLE III. REPRESENTATIONS AND WARRANTIES CONCERNING MX AND TMX............4
  3.1 Organization, Qualification, and Corporate Power.  ....................4
  --- ------------------------------------------------
  3.2 Capitalization of MX and TMX...........................................4
  --- ----------------------------
  3.3 Brokers' Fees..........................................................5
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  3.4 Title to Assets........................................................5
  --- ---------------
  3.5 Financial Statements...................................................5
  --- --------------------
  3.6 Events Subsequent to Most Recent Fiscal Year End.......................6
  --- ------------------------------------------------
  3.7 Undisclosed Liabilities................................................7
  --- -----------------------
  3.8 Legal Compliance.......................................................7
  --- ----------------
  3.9 Tax Matters............................................................7
  --- -----------
  3.10 Real Property.........................................................8
  ---- -------------
  3.11 Intellectual Property.................................................9
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  3.12 Tangible Assets.  ...................................................11
  ---- ---------------
  3.13 Contracts............................................................11
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  3.14 Employee Benefit Plans...............................................12
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  3.15 Labor Matters........................................................14
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  3.16 Notes and Accounts Receivable.  .....................................14
  ---- -----------------------------
  3.17 Powers of Attorney.  ................................................14
  ---- ------------------
  3.18 Insurance............................................................14
  ---- ---------
  3.19 Litigation...........................................................15
  ---- ----------
  3.20 Guaranties.  ........................................................15
  ---- ----------
  3.21 Environmental Matters................................................15
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  3.22 Corporate Books and Records.  .......................................16
  ---- ---------------------------
  3.23 Disclosure.  ........................................................16
  ---- ----------
ARTICLE IV. COVENANTS OF GTMM AND TFM.......................................16
  4.1 Conduct of MX and TMX Through Closing Date.  .........................16
  --- ------------------------------------------
  4.2 Access to Information.  ..............................................16
  --- ---------------------
  4.3 Notice of Developments................................................16
  --- ----------------------
ARTICLE V. COVENANTS OF ALL PARTIES.........................................17
  5.1 General.  ............................................................17
  --- -------
  5.2 Cooperation to Obtain STB Approval....................................17
  --- ----------------------------------
  5.3 Notice of Developments.  .............................................17
  --- ----------------------
<PAGE>

ARTICLE VI. CONDITIONS TO OBLIGATION TO CLOSE...............................17
  6.1 Mutual Conditions to Obligations to Close.............................17
  --- -----------------------------------------
  6.2 Conditions to Obligations of KCS to Close.  ..........................18
  --- -----------------------------------------
  6.3 Conditions to Obligations of TFM to Close.  ..........................18
  --- -----------------------------------------
ARTICLE VII. REMEDIES FOR BREACHES OF THIS AGREEMENT........................19
  7.1 Survival of Representations and Warranties.  .........................19
  --- ------------------------------------------
  7.2 Indemnification Provisions for Benefit of KCS.........................19
  --- ---------------------------------------------
  7.3 Indemnification Provisions for Benefit of GTMM and TFM.  .............19
  --- ------------------------------------------------------
  7.4 Determination of Adverse Consequences.  ..............................20
  --- -------------------------------------
  7.5 Specific Performance.  ...............................................20
  --- --------------------
ARTICLE VIII. TERMINATION...................................................20
  8.1 Termination of Agreement..............................................20
  --- ------------------------
  8.2 Effect of Termination.  ..............................................20
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ARTICLE IX..................................................................21
ARTICLE IX. MISCELLANEOUS...................................................21
  9.1 Amendments and Waivers.  .............................................21
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  9.2 Entire Agreement.  ...................................................21
  --- ----------------
  9.3 Counterparts.  .......................................................21
  --- ------------
  9.4 No Third-Party Beneficiaries.  .......................................21
  --- ----------------------------
  9.5 Succession and Assignment.  ..........................................21
  --- -------------------------
  9.6 Headings.  ...........................................................21
  --- --------
  9.7 Notices...............................................................22
  --- -------
  9.8 Expenses.  ...........................................................22
  --- --------
  9.9 Announcements.  ......................................................22
  --- -------------
  9.10 Governing Law; Venue and Jurisdiction................................22
  ---- -------------------------------------
  9.11 Severability.  ......................................................23
  ---- ------------
  9.12 Construction.  ......................................................23
  ---- ------------
  9.13 Incorporation of Exhibits, Annexes, and Schedules.  .................23
  ---- -------------------------------------------------
ARTICLE X. DEFINITIONS......................................................23





Exhibit A Form of Voting Trust Agreement
Annex I   Exceptions  to  Representations and   Warranties of  GTMM and  TFM
          Concerning  the  Transaction Disclosure   Schedule: Exceptions  to
          Representations and Warranties Concerning MX and TMX
Annex II  Exceptions to Representations and Warranties of KCS Concerning the
          Transaction Disclosure Schedule: Exceptions to Representations and
          Warranties Concerning MX and TMX

                                      -ii-

<PAGE>



                            STOCK PURCHASE AGREEMENT


THIS STOCK PURCHASE AGREEMENT (the "Agreement"),  dated as of April 20, 2003, is
made and entered into by and among:

     1. Grupo TMM, S.A., ("GTMM"), a sociedad anonima, organized under the laws
of the United Mexican States ("UMS");

     2. TFM,  S.A. de C.V.  ("TFM"),  a sociedad  anonima de capital  variable,
organized under the laws of the UMS; and

     3. Kansas City Southern ("KCS"), a Delaware corporation,

each of them a "Party" and collectively the "Parties."

                                    RECITALS

A.   GTMM owns more than 96% of the capital stock of TMM Multimodal, S.A.de C.V.
a sociedad anonima de capital variable ("MM").

B.   KCS owns all of the capital stock of The Kansas City Southern Railway
Company ("KCSR").

C.   MM directly owns 51% and KCS indirectly owns 49% (through Nafta Rail, S.A.
de C.V., a sociedad anonima de capital variable and wholly-owned Subsidiary of
KCS) of the full  voting  shares of Grupo TFM,  S.A. de C.V., a sociedad anonima
de capital variable ("GTFM").

D.   GTFM owns all of the full voting shares of the capital stock of TFM.

E.   Mexrail, Inc., a Delaware corporation, ("MX") is a wholly-owned Subsidiary
of TFM. MX owns all of the capital stock of the Texas Mexican  Railway  Company,
a Texas corporation ("TMX"). MX also owns  other assets (including real estate)
and the northern  one-half of the railroad  bridge between  Laredo,  Texas (USA)
and Nuevo Laredo, Mexico.

F.   TFM  wishes  to sell, and  KCS wishes to acquire,  51% of  the  outstanding
shares of the capital stock of MX (the  "Initially  Transferred  Shares") and in
addition grant KCS an exclusive  option to purchase the remaining  shares of the
capital  stock of MX as of the date of the  exercise  of such option to purchase
(the  "Subsequently  Transferred  Shares").  All of the issued  and  outstanding
shares of the  capital  stock of MX  acquired by KCS,  including  the  Initially
Transferred  Shares and the  Subsequently  Transferred  Shares are  referred  to
hereinafter as the "MX Shares" or as the "Transferred Shares."
<PAGE>

          NOW,   THEREFORE,   in   consideration   of  the  above  recitals  and
the representations,  warranties  and  covenants  contained in this  Agreement,
the parties, intending to be legally bound, agree as follows:

                                   ARTICLE I.
                     PURCHASE AND SALE OF TRANSFERRED SHARES

     1.1 Purchase and Sale. Upon the terms and subject to the conditions of this
Agreement and in reliance  upon the  representations,  warranties  and covenants
herein set forth, TFM shall sell, assign,  transfer,  convey and deliver to KCS,
free and clear of all Liens,  and KCS shall  purchase  and accept from TFM,  the
Transferred Shares.

     1.2 The  Initial  Closing.  Subject to Article  VI of this  Agreement,  the
initial  closing of the purchase and sale of the  Initially  Transferred  Shares
(the "Initial  Closing")  shall take place on such date as the parties agree, at
the offices of Sonnenschein Nath & Rosenthal,  4520 Main, Kansas City, Missouri,
or at such  other  time (no later  than June 30,  2003) or place as agreed to in
writing by KCS, GTMM and TFM (the date on which the Closing occurs, the "Initial
Closing  Date").  The  Initial  Closing  shall be  effective  as of the close of
business on the Initial Closing Date.

     1.3 Purchase Price. The aggregate  purchase price to be paid by KCS for the
Initially  Transferred  Shares  shall be the sum of  $32,680,000  (the  "Initial
Purchase Price").  The Initial Purchase Price shall be paid to TFM in cash (U.S.
dollars) at the Initial Closing by wire transfer of same day funds.

     1.4. Purchase Option. TFM hereby grants to KCS an irrevocable and exclusive
option  until 5:00 PM (Eastern  Standard  Time) on December 31, 2005 to purchase
the Subsequently  Transferred Shares (the "Purchase Option").  Any purchase made
by KCS  pursuant to the  Purchase  Option may be exercised by KCS upon three (3)
days  written  notice to TFM (the  "Subsequent  Closing" and as with the Initial
Closing,  each a "Closing")  and shall be upon the same terms and conditions set
forth in this Agreement,  including,  but not limited to, the per share purchase
price, which shall be the same as the Initial Purchase Price, and the conditions
to  closing  set  forth  in  Article  VI of  this  Agreement.  TFM is  expressly
prohibited  from taking any action or  non-action  which would render any of the
representations,  warranties and covenants set forth in this Agreement untrue or
ineffective between the Initial Closing Date and the Subsequent Closing.

     1.5 Deliveries at Closing.  At each Closing,  (i) GTMM and TFM will deliver
to KCS the various  certificates and documents referred to in ss.6.2 below, (ii)
KCS will deliver to GTMM and TFM the  certificate  referred to in ss.6.3  below,
(iii) TFM will deliver to KCS stock  certificates  representing  the  applicable
Transferred  Shares for such Closing,  endorsed in blank or  accompanied by duly
executed assignment  documents,  and (iv) KCS will deliver to TFM the applicable
Purchase Price for such Closing.

     1.6 Voting Trust.  Simultaneously  with the purchase by KCS from TFM of the
Transferred  Shares, KCS shall deposit the Initially  Transferred Shares into an
irrevocable  voting

                                       -2-
<PAGE>

trust (the "Voting  Trust") in  accordance  with the terms and  conditions  of a
voting trust agreement (the "Voting Trust Agreement")  substantially in the form
attached hereto as Exhibit A.


                                  ARTICLE II.
            REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION

     2.1  Representations and Warranties of GTMM and TFM. GTMM and TFM represent
and warrant to KCS that the statements  contained in this ss.2.1 are correct and
complete as of the date of this Agreement and will be correct and complete as of
each  Closing  (as  though  made  then and as  though  such  Closing  date  were
substituted for the date of this Agreement  throughout  this ss.2.1),  except as
set forth in Annex I attached hereto.

          (a)  Organization of GTMM and TFM. GTMM is a sociedad  anonima and TFM
     is a sociedad  anonima de capital  variable,  each duly organized,  validly
     existing, and in good standing under the laws of the UMS.

          (b)  Authorization  of  Transaction.   The  execution,   delivery  and
     performance of this Agreement by each of GTMM and TFM, and the consummation
     by TFM of the transaction  contemplated  hereby,  are within the respective
     corporate powers of each of them, and have been duly authorized, as to each
     of them, by all necessary corporate action. This Agreement  constitutes the
     valid and legally binding  obligation of each of GTMM and TFM,  enforceable
     in accordance with its terms and conditions. Neither GTMM nor TFM need give
     any notice to, make any filing with, or obtain any authorization,  consent,
     or approval of any government or governmental agency in order to consummate
     the transaction contemplated by this Agreement.

          (c) Non-Contravention. Except as set forth in ss.2.1 of the Disclosure
     Schedule, the execution, delivery and performance of this Agreement by each
     of  GTMM  and  TFM,  and  the   consummation  by  TFM  of  the  transaction
     contemplated  hereby,  do not and will not (i)  violate  any  constitution,
     statute,  regulation,  rule, injunction,  judgment,  order, decree, ruling,
     charge,  or other  restriction of any government,  governmental  agency, or
     court to which GTMM or TFM is  subject,  or violate  any  provision  of the
     charter or bylaws of GTMM or TFM, or (ii) conflict with, result in a breach
     of,  constitute a default under,  result in the  acceleration of, create in
     any party the right to accelerate, terminate, modify, or cancel, or require
     any notice under any agreement,  contract,  lease, license,  instrument, or
     other  arrangement  to which GTMM or TFM is a party or by which any of them
     is bound or to which any of their assets is subject.

          (d)  Brokers'  Fees.  Neither  GTMM  nor  TFM  has  any  liability  or
     obligation to pay any fees or commissions to any broker,  finder,  or agent
     with respect to the  transaction  contemplated  by this Agreement for which
     KCS, MX or TMX could become liable or obligated.

          (e) MX  Shares.  TFM  holds of  record  and owns  beneficially  the MX
     Shares,  free and clear of any  restrictions  on transfer (other than those
     set forth in the Stock Purchase  Agreement,  dated as of February 27, 2002,
     among GTMM, MM, KCS and TFM (the "2002 Stock Purchase Agreement"), the GTFM
     bylaws, and the Shareholders Agreement.),  Taxes, Liens, options, warrants,
     purchase rights, contracts, commitments, equities, claims, and demands. TFM
     is not a party to any option, warrant, purchase right, or other contract or
     commitment that

                                       -3-
<PAGE>

     could require TFM to sell, transfer,  or otherwise dispose of any of the MX
     Shares (other than this Agreement). TFM is not a party to any voting trust,
     proxy,  or other agreement or  understanding  with respect to the voting of
     the MX Shares  (other  than the 2002  Stock  Purchase  Agreement,  the GTFM
     bylaws, and the Shareholders  Agreement).  Prior to the Subsequent Closing,
     TFM shall not,  directly or indirectly,  transfer,  sell,  give,  encumber,
     assign,  pledge or otherwise deal with or dispose of all or any part of the
     MX Shares (other than pursuant to this Agreement).

     2.2  Representations  and Warranties of KCS. KCS represents and warrants to
GTMM and TFM that the  statements  contained  in this  ss.2.2  are  correct  and
complete as of the date of this Agreement and will be correct and complete as of
the Initial  Closing Date (as though made then and as though the Initial Closing
Date were  substituted  for the date of this Agreement  throughout this ss.2.2),
except as set forth in Annex II attached hereto.

          (a) Organization of KCS. KCS is a corporation duly organized,  validly
     existing, and in good standing under the laws of Delaware.

          (b)  Authorization  of  Transaction.   The  execution,   delivery  and
     performance  by KCS of this  Agreement and the  consummation  by KCS of the
     transaction  contemplated hereby are within KCS's corporate powers and have
     been duly  authorized by all necessary  corporate  action.  This  Agreement
     constitutes the valid and legally binding obligation of KCS, enforceable in
     accordance with its terms and conditions.  KCS need not give any notice to,
     make any filing with, or obtain any authorization,  consent, or approval of
     any  government  or   governmental   agency  in  order  to  consummate  the
     transaction contemplated by this Agreement.

          (c) Non-Contravention. The execution, delivery and performance of this
     Agreement  by  KCS,  and  the   consummation  by  KCS  of  the  transaction
     contemplated  hereby,  do not and will not (i)  violate  any  constitution,
     statute,  regulation,  rule, injunction,  judgment,  order, decree, ruling,
     charge,  or other  restriction of any government,  governmental  agency, or
     court to which KCS is subject,  or violate any  provision of its charter or
     bylaws,  or (ii) conflict with, result in a breach of, constitute a default
     under,  result  in the  acceleration  of,  create in any party the right to
     accelerate,  terminate,  modify, or cancel, or require any notice under any
     agreement,  contract,  lease, license,  instrument, or other arrangement to
     which KCS is a party or by which it is bound or to which any of its  assets
     is subject, except the consents required under the KCS Credit Agreement

          (d) Brokers'  Fees. KCS has no liability or obligation to pay any fees
     or  commissions  to any  broker,  finder,  or  agent  with  respect  to the
     transaction  contemplated  by this  Agreement  for which  GTMM or TFM could
     become liable or obligated.



                                  ARTICLE III.
             REPRESENTATIONS AND WARRANTIES CONCERNING MX AND TMX

      GTMM and TFM represent and warrant to KCS that the statements contained in
this Article III are correct and complete as of the date of this  Agreement  and
will be correct and complete as of the Initial Closing Date (as though made then
and as though the Initial  Closing  Date were  substituted  for the date of this
Agreement  throughout  this Article III),  except as set

                                       -4-
<PAGE>

forth in the  disclosure  schedule  delivered by GTMM and TFM to KCS on the date
hereof and initialed by the Parties (the "Disclosure Schedule").

     3.1 Organization,  Qualification,  and Corporate Power. MX is a corporation
duly  organized,  validly  existing,  and in good  standing  under  the  laws of
Delaware.  TMX is a corporation duly organized,  validly  existing,  and in good
standing  under  the laws of  Texas.  Each of MX and TMX is duly  authorized  to
conduct  business and is in good  standing  under the laws of each  jurisdiction
where  such   qualification   is  required,   except  where  the  lack  of  such
qualification  would not  reasonably  be  expected  to have a  Material  Adverse
Effect.  Each of MX and TMX has full  corporate  power and authority to carry on
the  businesses in which it is engaged and to own and use the  properties  owned
and used by it.  ss.3.1  of the  Disclosure  Schedule  lists the  directors  and
officers of each of MX and TMX.

     3.2 Capitalization of MX and TMX.


          (a) The  entire  authorized  capital  stock of MX  consists  of 10,000
     shares of common stock, no par value, of which 10,000 shares are issued and
     outstanding.  MX holds no shares of MX's capital stock in its treasury. All
     of the issued and  outstanding  shares have been duly  authorized,  and are
     validly issued, fully paid, and nonassessable.  There are no outstanding or
     authorized  options,  warrants,   purchase  rights,   subscription  rights,
     conversion rights, exchange rights, preemptive rights or other contracts or
     commitments  that could require MX to issue,  sell,  or otherwise  cause to
     become  outstanding  any of its capital stock.  There are no outstanding or
     authorized stock  appreciation,  phantom stock,  profit  participation,  or
     similar rights with respect to MX. TFM is the record and  beneficial  owner
     of 100% of the MX Shares,  and TFM owns the MX Shares free and clear of all
     Liens,  and there are no voting  trusts,  proxies,  or other  agreements or
     understandings with respect to the voting of the capital stock of MX, other
     than  the  2002  Stock  Purchase  Agreement,   the  GTFM  bylaws,  and  the
     Shareholders Agreement.

          (b) The entire  authorized  capital  stock of TMX  consists  of 25,009
     shares of common stock,  [no] par value,  of which 25,009 shares are issued
     and  outstanding.  TMX  holds  no  shares  of  TMX's  capital  stock in its
     treasury.  All  of  the  issued  and  outstanding  shares  have  been  duly
     authorized,  and are validly issued,  fully paid, and nonassessable.  There
     are no  outstanding  or  authorized  options,  warrants,  purchase  rights,
     subscription rights,  conversion rights, exchange rights, preemptive rights
     or other contracts or commitments that could require TMX to issue, sell, or
     otherwise cause to become  outstanding any of its capital stock.  There are
     no  outstanding or authorized  stock  appreciation,  phantom stock,  profit
     participation,  or similar rights with respect to TMX. MX is the record and
     beneficial  owner  of  100%  of the  TMX  capital  stock  (except  for  one
     qualifying  share  of  the  capital  stock  of TMX  owned  by  each  of its
     directors,  the equitable interest of each such share being held by MX). MX
     owns the TMX  capital  stock free and clear of all Liens,  and there are no
     voting trusts,  proxies, or other agreements or understandings with respect
     to the  voting  of the  capital  stock of TMX,  other  than the 2002  Stock
     Purchase Agreement, the GTFM bylaws, and the Shareholders Agreement.

     3.3 Brokers'  Fees.  Neither MX nor TMX has any  liability or obligation to
pay any fees or commissions to any broker,  finder, or agent with respect to the
transaction contemplated by this Agreement.

                                       -5-
<PAGE>

     3.4 Title to Assets. MX and TMX each own or have a right to possess and use
all of the properties and assets necessary to operate the business of MX and TMX
as each has been conducted immediately prior to the date of this Agreement.

     3.5  Financial  Statements.  The  financial  statements  (collectively  the
"Financial  Statements")  heretofore provided to KCS by GTMM and TFM, consisting
of (i) the audited consolidated balance sheets and statements of income, changes
in  stockholders'  equity,  and cash flow as of and for the fiscal  years  ended
1999,  2000, 2001 and 2002, for MX and TMX have been prepared in accordance with
GAAP applied on a consistent  basis  throughout the periods  covered thereby and
present fairly, in all material respects,  the financial condition of MX and TMX
as of such dates and the results of  operations  of MX and TMX for such  periods
(subject  in the case of any interim  financial  statements  to normal  year-end
adjustments and lack footnotes and other presentation items).

     3.6 Events  Subsequent to Most Recent Fiscal Year End.  Since  December 31,
2002 MX and TMX have  carried  out their  respective  businesses  in an ordinary
manner,  consistent  with  past  practices  and  there has not been any event or
occurrence  that has had or would  reasonably  be  expected  to have a  Material
Adverse Effect.

     3.7  Undisclosed   Liabilities.   Except  as  disclosed  in  the  Financial
Statements,  neither MX nor TMX has any liabilities or obligations of any nature
that would be required under GAAP to be included on a consolidated balance sheet
of MX or the  notes to the  consolidated  balance  sheet,  except  as would  not
reasonably be expected to have a Material Adverse Effect.

     3.8 Legal  Compliance.  Each of MX and TMX has complied with all applicable
laws  (including  rules,  regulations,  codes,  plans,  injunctions,  judgments,
orders, decrees,  rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing,  investigation,  charge,  complaint,  claim, demand, or notice has been
filed or  commenced  against  either of them  alleging any failure so to comply,
except where the failure to comply would not have a Material Adverse Effect.

     3.9 Tax Matters.

          (a) Except as stated in ss.3.9 of the Disclosure  Schedule or as would
     not reasonably be expected to have a Material  Adverse  Effect,  all MX and
     TMX Tax returns  required  to be filed on or before the  Closing  Date have
     been duly and timely filed (taking into account all proper extensions) with
     the appropriate  Taxing  authorities and all such Tax returns were complete
     and accurate, and all Taxes shown on the described returns have been paid.

          (b) Except as stated in ss.3.9 of the Disclosure  Schedule or as would
     not reasonably be expected to have a Material  Adverse Effect:  (i) neither
     GTMM,  TFM, MX or TMX has  received  any written  notice of  deficiency  or
     assessment  for Taxes of MX or TMX,  which  have not been  paid or  finally
     settled;  (ii) no claim has been made in writing by any Taxing authority in
     a jurisdiction where MX and TMX do not file Tax returns that either company
     is or may be subject to  Taxation by that  jurisdiction;  (iii) no audit of
     any Tax return filed by MX or TMX is pending,  ongoing, or to the Knowledge
     of  GTMM or TFM,  threatened;  (iv)  neither  MX nor TMX has  asked  for or
     received a waiver of any  statute  of  limitation  concerning  Taxes or the

                                       -6-
<PAGE>

     payment  of Taxes that are due or would be due prior to the  Closing  Date;
     and (v)  neither  MX nor TMX has any  liability  for the Taxes of any other
     person.

          (c) There are no liens for Taxes on any assets of MX or TMX other than
     Liens for current  Taxes (i) not yet due and payable or (ii) that would not
     have a Material Adverse Effect.

          (d) There are no Tax sharing or Tax  indemnity  agreements  or similar
     arrangements involving MX and TMX and any other person.

          (e) MX and TMX have each  complied in all material  respects  with all
     applicable  governmental  rules  relating to the  payment,  collection  and
     withholding of Taxes.

          (f) Except as stated on ss.3.9 of the Disclosure Schedule, there is no
     Tax  litigation  pending  or to the  Knowledge  of  GTMM  and  TFM  (or the
     directors of TFM appointed by GTMM) threatened against MX or TMX.

          (g) From  December 31, 2002 until the date of this  Agreement,  MX and
     TMX (i) have made no change in any accounting  method used for Tax purposes
     or in depreciation or amortization  policies, and have made no election for
     Tax  purposes  which  is not  consistent  with  the  method,  policies  and
     elections made prior to the date of the Financial Statements; and (ii) have
     not settled any pending Tax audits or settled any Tax liability.

     3.10 Real Property.

          (a) ss.3.10 of the Disclosure Schedule lists and describes briefly all
     real property that either MX or TMX owns.  With respect to each such parcel
     of owned real property the identified  owner has good and marketable  title
     to the  parcel of real  property,  free and  clear of any  Lien,  easement,
     covenant,  or  other  restriction,   except  for  installments  of  special
     assessments not yet delinquent,  recorded easements,  covenants,  and other
     restrictions,   and  utility  easements,   building  restrictions,   zoning
     restrictions,  and other easements and restrictions existing generally with
     respect to properties of a similar character which do not affect materially
     and adversely the current use, occupancy, or value, or the marketability of
     title, of the property subject thereto.

     3.11 ss.3.10 of the Disclosure Schedule (and all Annexes thereto) lists and
describes  briefly all real property  leased or subleased to either MX or TMX or
from either MX or TMX. With respect to each material  lease and sublease  listed
in ss.3.10 of the Disclosure  Schedule (or any Annex thereto),  (i) the lease or
sublease is legal, valid, binding,  enforceable, and in full force and effect in
all  material  respects,  (ii) no party to the lease or  sublease is in material
breach or default,  and (iii) no event has occurred which,  with notice or lapse
of time,  would  constitute a material breach or default or permit  termination,
modification, or acceleration thereunder.

     3.12  Tangible  Assets.  The  buildings,  machinery,  equipment,  and other
tangible assets that MX and TMX own and lease, other than tangible assets having
a book value of less than $1 million,  are in good condition and repair,  normal
wear and tear excepted.

     3.13 Contracts.  As of the date of this Agreement,  the Scheduled Contracts
(as defined below) of MX and TMX are legal, valid and binding  obligations of MX
or TMX, respectively,

                                       -7-
<PAGE>

and are in full force and effect,  enforceable  in accordance  with their terms,
except  as   enforceability   may  be   limited   by   bankruptcy,   insolvency,
reorganization  and similar laws  relating  generally to the  enforceability  of
contracts and the  availability  of equitable  remedies.  As of the date of this
Agreement,  neither GTMM,  TFM, MX or TMX has received notice of cancellation of
or default under any Scheduled Contract,  where such default would reasonably be
expected to have a Material Adverse Effect.  ss.3.13 of the Disclosure  Schedule
lists the following  contracts and other agreements to which either MX or TMX is
a party (the "Scheduled Contracts"):

          (a)  any  agreements  to  which  either  GTMM  or TFM or any of  their
     Affiliates (other than MX or TMX) are a party;

          (b)  any  agreements  which  constitute  nondisclosure  agreements  or
     confidentiality  agreements  which could  reasonably  be expected to have a
     significant  effect on the conduct of the  business of MX, TMX, or KCS; (c)
     any  agreements  pursuant to which MX or TMX is either  obligated to pay or
     entitled to receive in excess of $2 million during any twelve month period;

          (d) any  agreements  that are  employment,  management,  consulting or
     severance agreements with any officer or director of MX or TMX;

          (e) any agreements that include any  noncompetition or nonsolicitation
     covenant or any exclusive  dealing or similar  arrangement  that limits the
     ability of MX or TMX to compete  (geographically  or otherwise) in any line
     of business or which would so limit KCS following the Closing; or

          (f)  any  trackage   rights   agreements,   interline  or  interchange
     agreements with other railroads.


     3.14 Employee Benefit Plans.

          (a) ss.3.14 of the Disclosure  Schedule identifies each Employee Plan.
     TFM has made  available to KCS copies of each such  Employee  Plan (and, if
     applicable,  related  trust  agreements)  and all  amendments  thereto  and
     written interpretations thereof together with the most recent annual report
     (Form 5500  including,  if  applicable,  Schedule  B thereto)  and the most
     recent actuarial  valuation report prepared in connection with any Employee
     Plan  and,  if  applicable,  the  Internal  Revenue  Service  determination
     letters. No Employee Plan is a Title IV Plan.

          (b) As of the Most Recent Fiscal Month End, MX and TMX did not have an
     aggregate unfunded liability of MX and TMX in respect of all Employee Plans
     or Benefit  Arrangements  described under Sections  4(b)(5) or 401(a)(1) of
     ERISA,   computed  using  reasonable   actuarial   assumptions  that  would
     reasonably be expected to have a Material Adverse Effect.


                                       -8-
<PAGE>

          (c) No  transaction  prohibited  by ss.406 of ERISA or  ss.4975 of the
     Code has occurred with respect to any Employee Plan or arrangement which is
     covered by Part 4, Title I of ERISA, which transaction has or will cause MX
     and TMX to incur any  liability  under ERISA,  the Code or otherwise  which
     would  reasonably  be  expected  to result in a  Material  Adverse  Effect,
     excluding  transactions  effected  pursuant  to  and in  compliance  with a
     statutory  or  administrative  exemption.  Neither  MX,  TMX nor any  ERISA
     Affiliate  of them has (i)  except  where  the  failure  thereof  would not
     reasonably be expected to result in a Material Adverse Effect,  engaged in,
     or is a successor or parent corporation to an entity that has engaged in, a
     transaction  described  in  Sections  4069  or  4212(c)  of  ERISA  or (ii)
     incurred, or reasonably expects to incur prior to the Initial Closing Date,
     (A) any liability  under Title IV of ERISA  arising in connection  with the
     termination of, or a complete or partial  withdrawal from, any plan covered
     or  previously  covered  by Title IV of  ERISA or (B) any  liability  under
     ss.4971 of the Code that in either case could  become a liability of MX and
     TMX or KCS or any of its ERISA  Affiliates  after the Initial  Closing Date
     which would reasonably be expected to have a Material Adverse Effect.

          (d)  Each  Employee  Plan  that  is  intended  to be  qualified  under
     ss.401(a) of the Code has received a favorable  determination,  and, to the
     Knowledge  of any of GTMM,  TFM and the  directors  (appointed  by TFM) and
     officers of MX and TMX, nothing has occurred since that  determination that
     would  adversely  affect  such   determination  in  a  manner  which  would
     reasonably  be expected to have a Material  Adverse  Effect.  Each Employee
     Benefit Plan has been  maintained in compliance with its terms and with the
     requirements  prescribed by any and all applicable statutes,  orders, rules
     and regulations, including but not limited to ERISA and the Code, except to
     the extent that  failure to so comply would not  reasonably  be expected to
     have a Material Adverse Effect.

          (e)  ss.3.14  of the  Disclosure  Schedule  identifies  each  material
     Benefit  Arrangement.  TFM has made available to KCS copies or descriptions
     of each material  Benefit  Arrangement  (and, if applicable,  related trust
     agreements) and all amendments thereto and written interpretations thereof.
     Each Benefit  Arrangement  has been maintained in compliance with its terms
     and with the  requirements  prescribed by any and all applicable  statutes,
     orders, rules and regulations and has been maintained in good standing with
     applicable regulatory authorities,  except to the extent that failure to so
     comply would not reasonably be expected to have a Material Adverse Effect.

          (f)  Except as set forth on  ss.3.14 of the  Disclosure  Schedule  and
     except  as  provided  in this  Agreement,  there  is no  contract,  plan or
     arrangement  (written or otherwise) to which MX or TMX are parties covering
     any  employee  or  former  employee  of MX or  TMX  that,  individually  or
     collectively,  could give rise to the  payment of any amount that would not
     be  deductible  pursuant to the terms of ss.280G of the Code, to the extent
     that such payments would  reasonably be expected to have a Material Adverse
     Effect.

          (g)  Except as set forth on  ss.3.14 of the  Disclosure  Schedule  and
     except as provided in this Agreement,  no employee or former employee of MX
     or TMX will  become  entitled  to any  bonus,  retirement,  severance,  job
     security or similar benefit (including  acceleration of vesting or exercise
     of an incentive award) as a result of the transaction  contemplated hereby,

                                       -9-
<PAGE>

     to the extent that such  benefits  would  reasonably  be expected to have a
     Material Adverse Effect.

     3.15  Labor  Matters.  MX and  TMX are in  compliance  with  all  currently
applicable  legislation in the various  jurisdictions  where they operate,  with
respect to terms and  conditions  of employment  of their  workforce,  including
legislation  governing  unionized labor, and are not engaged in any unfair labor
practice,  failure to comply with which or engagement in which,  as the case may
be, would  reasonably be expected to have a Material  Adverse Effect.  Except as
disclosed in ss.3.15 of the Disclosure  Schedule,  (i) neither MX nor any of its
Subsidiaries is a party, or is otherwise subject,  to any collective  bargaining
agreement or other labor union contract applicable to its employees,  (ii) there
are no material  activities or  proceedings  by a labor union or  representative
thereof to organize any employees of MX or TMX outside of the Ordinary Course of
Business,  (iii)  there are no  pending  negotiations  between MX or TMX and any
labor union or representative thereof regarding any proposed material changes to
any existing collective bargaining agreement,  (iv) there are no pending, and MX
and TMX  have not  experienced  since  January  1,  2000,  any  labor  disputes,
lockouts,  strikes,  slowdowns,  work stoppages,  or threats thereof which would
reasonably be expected to have a Material Adverse Effect, (v) MX and TMX are not
in  default  and have not  breached  in any  material  respect  the terms of any
applicable collective bargaining or other labor union contract, and there are no
material  grievances  outstanding  against MX, TMX or any of its Subsidiaries or
their employees  under any such agreement or contract which would  reasonably be
expected  to have a  Material  Adverse  Effect,  (vi)  there is no unfair  labor
practice  complaint  pending,  or to the  Knowledge of any of GTMM,  TFM and the
directors  (appointed by TFM) and officers of MX and TMX threatened,  against MX
or TMX before the National  Labor  Relations  Board or any other  investigation,
charge, prosecution,  suit or other proceeding before any court or arbitrator or
any governmental body, agency or official relating to the employees of MX or TMX
or the  representation  thereof  which  would  reasonably  be expected to have a
Material Adverse Effect, (vii) there are no claims or actions pending, or to the
Knowledge of any of GTMM, TFM and the directors  (appointed by TFM) and officers
of MX and TMX threatened,  between MX or TMX and any of their employees or labor
organizations  representing  or seeking to represent such employees  which would
reasonably  be  expected  to have a  Material  Adverse  Effect and (viii) to the
Knowledge of any of GTMM, TFM and the directors  (appointed by TFM) and officers
of MX and TMX, there are no facts or  circumstances  involving any employee that
would  form the  basis of, or give  rise to,  any  cause of  action,  including,
without  limitation,  unlawful  termination  based on discrimination of any kind
that would reasonably be expected to result in a Material Adverse Effect.

     3.16 Powers of Attorney.  Other than those  powers of attorney  approved by
the Boards of  Directors  of either MX or TMX, to the  Knowledge of any of GTMM,
TFM and the directors  (appointed by TFM) and officers of MX and TMX,  there are
no material outstanding powers of attorney executed on behalf of MX or TMX.

     3.17 Insurance.  ss.3.17 of the Disclosure  Schedule includes a list of all
policies of fire, liability,  product liability,  workers' compensation,  health
and other forms of insurance  presently in effect with respect to MX's and TMX's
business (the  "Insurance  Policies"),  including the named  insured(s)  and all
beneficiaries thereunder, and true and complete copies of the Insurance Policies
have  been  made  available  to KCS.  Neither  MX nor TMX has been  refused  any

                                      -10-
<PAGE>

insurance with respect to any aspect of the operations of its business,  nor has
its coverage been rescinded by any insurance carrier to which it has applied for
insurance or with which it has carried  insurance.  No notice of cancellation or
termination has, as of the date of this Agreement, been received with respect to
any such policy.  The  activities,  business,  and operations of MX and TMX have
been conducted in such a manner so as to conform in all material respects to all
material provisions of the Insurance Policies.

3.18  Litigation.  There  are  no  legal,  administrative,   arbitral  or  other
proceedings  (including  disciplinary  proceedings),  claims,  suits, actions or
governmental or regulatory  investigations of any nature that are pending or, to
the  knowledge of GTMM,  TFM, MX or TMX  threatened  against MX or TMX or any of
their officers,  directors or properties  which would  reasonably be expected to
have a Material  Adverse  Effect or that  challenge the validity or propriety of
the transactions contemplated by this Agreement. There is no injunction,  order,
judgment or decree imposed upon MX or TMX, or any material portion of the assets
or business of MX or TMX.

3.19 Environmental  Matters.  MX and TMX (i) are in compliance with, and are not
subject to any liability  under  applicable  Environmental  Laws;  (ii) hold all
Environmental  Permits  necessary to conduct their current  operations and (iii)
are in compliance with their respective  Environmental Permits, except where the
failure to hold or be in compliance with such Environmental Permits would not be
expected to have a Material  Adverse  Effect.  Except as would not reasonably be
expected to have a Material  Adverse Effect on MX or TMX,  neither GTMM, TFM, MX
nor TMX has received any written notice,  demand,  letter,  claim or request for
information  alleging that MX or TMX may be in violation  of, or have  liability
under, any Environmental  Law. Neither MX nor TMX (x) has entered into or agreed
to any consent decree or order or is subject to any judgment, decree or judicial
order relating to compliance with Environmental Laws,  Environmental  Permits or
the investigation,  sampling,  monitoring,  treatment,  remediation,  removal or
cleanup  of  Hazardous  Materials  and no  investigation,  litigation  or  other
proceeding  is pending or, to the  Knowledge of GTMM and TFM,  threatened,  with
respect  thereto or (y) is an indemnitor or has assumed  liability in connection
with any pending demand, notice, claim, or other allegation, or to the Knowledge
of GTMM and TFM, any claim threatened, by or against any third-party relating to
any  liability  under  any  Environmental  Law  or  relating  to  any  Hazardous
Materials.  None of the real property  owned or leased from/to or operated by MX
or TFM is listed or, to the Knowledge of GTMM and TFM, proposed for listing,  on
any list of sites maintained by any competent  governmental  authority requiring
investigation or cleanup.


ARTICLE IV.
                            COVENANTS OF GTMM AND TFM

4.1 Conduct of MX and TMX Through  Initial  Closing  Date.  Except as  otherwise
expressly set forth in this  Agreement,  during the period from the date of this
Agreement  through  the  Initial  Closing  Date,  GTMM and TFM will not cause or
permit MX or TMX to engage in any practice,  take any action,  or enter into any
transaction  outside the  Ordinary  Course of  Business.  Without  limiting  the
generality of the foregoing,  neither MX nor TMX will declare, set aside, or pay
any  dividend or make any  distribution  with  respect to its  capital  stock or
redeem,  purchase,

                                      -11-
<PAGE>

or  otherwise  acquire  any of its  capital  stock.  GTMM and TFM will use their
commercially reasonable efforts to cause each of MX and TMX to keep its business
and properties substantially intact, including its present operations,  physical
facilities,  working  conditions,  and  relationships  with lessors,  licensors,
suppliers, customers, and employees.

     4.2 Access to  Information.  From the date of this  Agreement  through  the
Initial  Closing  Date,  GTMM and TFM give (and will cause each of MX and TMX to
give) KCS,  its  counsel,  financial  advisors,  auditors  and other  authorized
representatives full access to the offices,  properties, books and records of MX
and TMX,  will  furnish to KCS, its counsel,  financial  advisors,  auditors and
other  authorized  representatives  such  financial and operating data and other
information  as such  Persons  may  reasonably  request,  and  GTMM and TFM will
cooperate (and will instruct the employees, counsel and financial advisors of MX
and TMX to cooperate)  with KCS in its  investigation  of the business of MX and
TMX,  as the  case  may be.  KCS will  treat  and hold as such any  Confidential
Information  it receives from any of GTMM,  TFM, MX and TMX in the course of the
reviews  contemplated by this ss.4.2,  and will not use any of the  Confidential
Information except in connection with this Agreement.

     4.3 Notice of  Developments.  From the date of this  Agreement  through the
Initial Closing Date, GTMM and TFM will give prompt written notice to KCS of any
material adverse  development causing a breach of any of the representations and
warranties in Article III above.  No  disclosure  by any Party  pursuant to this
ss.4.3,  however, shall be deemed to amend or supplement the Disclosure Schedule
or to prevent or cure any  misrepresentation,  breach of warranty,  or breach of
covenant.


                                   ARTICLE V.
                            COVENANTS OF ALL PARTIES

     5.1 General. Subject to the terms and conditions of this Agreement, each of
the Parties will use its commercially  reasonable efforts to take all action and
to do all things  necessary,  proper,  or advisable  under  applicable  laws and
regulations  in  order  to  consummate   and  make  effective  the   transaction
contemplated by this Agreement (including  satisfaction,  but not waiver, of the
closing conditions set forth in Article VI below).

     5.2  Cooperation  to Obtain STB Approval.  From the date of this  Agreement
until such time as the Surface  Transportation  Board ("STB") either approves or
denies KCS's  request to acquire  control of TMX and such an order becomes final
after  judicial  review or failure to appeal,  GTMM and TFM will  cooperate with
KCS, and KCS will cooperate with GTMM, and TFM, to obtain  approval from the STB
for KCS to acquire control of TMX.

     5.3 Notice of  Developments.  From the date of this  Agreement  through the
Subsequent Closing Date, each Party will give prompt written notice to other all
Parties of any material  adverse  development  causing a breach by the notifying
Party of any of the  representations  and  warranties  in Article  II above.  No
disclosure  by any Party  pursuant to this ss.5.3,  however,  shall be deemed to
amend  or  supplement   Annex  I  or  Annex  II,  or  to  prevent  or  cure  any
misrepresentation, breach of warranty, or breach of covenant.

                                      -12-
<PAGE>

                                  ARTICLE VI.
                        CONDITIONS TO OBLIGATION TO CLOSE

     6.1 Mutual  Conditions to Obligations to Close. The obligations of both KCS
and TFM to consummate the transaction contemplated by this Agreement are subject
to satisfaction of the following conditions:

          (a) No Governmental  Action: As of each Closing,  no action shall have
     been  taken,  and no  statute,  rule,  regulation  or order shall have been
     enacted,   adopted  or  issued  by  any  state  or  federal  government  or
     governmental  agency in the United  States or Mexico that would prevent the
     consummation of the transaction contemplated by this Agreement.

          (b) No Litigation:  As of each Closing,  there shall be no injunction,
     restraining  order  or  order  of any  nature  by any  court  of  competent
     jurisdiction that prevents the consummation of the transaction contemplated
     by this Agreement.

          (c)  Governmental  Approvals:  As of each  Closing,  all  governmental
     approvals (if any) required to consummate the  transaction  contemplated by
     this Agreement shall have been obtained.

     6.2 Conditions to Obligations  of KCS to Close.  The  obligations of KCS to
consummate  the  transaction  contemplated  by this  Agreement  are  subject  to
satisfaction, at or before each Closing, of all of the following conditions. KCS
may waive in writing any or all of these conditions,  in whole or in part, at or
at any time prior to the applicable  Closing,  with or without prior notice, but
no such waiver by KCS shall  constitute a waiver by KCS of any  condition not so
waived or of any other right or remedy of KCS, at law or in equity.

          (a)  Performance:  Each  of GTMM  and TFM  shall  have  performed  and
     complied in all material respects,  through each Closing,  with each of its
     respective agreements, obligations and covenants under this Agreement.

          (b) Representations and Warranties: The representations and warranties
     made by each of GTMM and TFM in Article II of this Agreement  shall be true
     and correct in all material  respects (i) at the date when made and (ii) at
     each Closing.  The  representations and warranties made by each of GTMM and
     TFM  concerning MX and TMX in Article III of this  Agreement  shall be true
     and correct in all material  respects (i) at the date when made and (ii) at
     the Initial Closing Date.

          (c)  Certificates:  KCS shall have received  certificates,  reasonably
     satisfactory  in form and  substance  to KCS,  of  officers of GTMM and TFM
     certifying  that,  to the  best  of  each  such  officer's  Knowledge,  the
     conditions  set forth in Sections  6.2(a) and 6.2(b) have been satisfied in
     all  respects  and that the  Board of  Directors  of each  GTMM and TFM has
     approved  the  execution  of  this   Agreement  and  has   authorized   the
     consummation of the transaction contemplated by this Agreement.

          (d) Resignations: KCS shall have received the resignations,  effective
     as of  the  Initial  Closing,  and  reasonably  satisfactory  in  form  and
     substance  to KCS, of each  director

                                      -13-
<PAGE>

     of MX and TMX.  Following the Initial  Closing,  the Trustee shall vote the
     Trust Stock in the  Trustee's  sole  discretion,  having due regard for the
     interests  of the  holders  of the  Trust  Certificates  and  the  minority
     shareholders  in MX and TMX, to nominate and elect  directors to fill those
     vacant  director  positions.  The  Trustee  shall  not,  without  the prior
     approval of the STB,  vote the Trust Stock to elect any current  officer or
     director  of  GTMM,  GTFM,  TFM,  KCS,  or  any  of  their  majority  owned
     affiliates.

     6.3 Conditions to Obligations  of TFM to Close.  The  obligations of TFM to
consummate  the  transaction  contemplated  by this  Agreement  are  subject  to
satisfaction, at or before each Closing, of all of the following conditions. TFM
may waive in writing any or all of these conditions,  in whole or in part, at or
at any time prior to each Closing,  with or without  prior  notice,  but no such
waiver by TFM shall constitute a waiver by TFM of any condition not so waived or
of any other right or remedy of TFM, at law or in equity.

          (a) Performance: KCS shall have performed and complied in all material
     respects,  through each Closing,  with each of its  respective  agreements,
     obligations and covenants under this Agreement.

          (b) Representations and Warranties: The representations and warranties
     made by KCS in this  Agreement  shall be true and  correct in all  material
     respects (i) at the date when made and (ii) at each Closing.

          (c)  Certificate:  TFM shall have received a  certificate,  reasonably
     satisfactory  in form and substance to TFM, of an officer of KCS certifying
     that, to the best of such officer's Knowledge,  the conditions set forth in
     Sections 6.3(a) and 6.3(b) have been satisfied in all respects and that the
     Board of Directors of KCS has approved the execution of this  Agreement and
     has authorized the  consummation  of the  transaction  contemplated by this
     Agreement.

          (d)  Fairness  Opinion:  TFM shall have  received  a fairness  opinion
     complying with the  requirements of the agreements  listed in ss.6.3 of the
     Disclosure Schedule.


                                  ARTICLE VII.
                                REPURCHASE RIGHT

     7.1 TFM's Right to Repurchase. TFM shall retain the right to repurchase all
of the  Transferred  Shares  from  KCS at any time  for an  amount  equal to the
Purchase Price.  Such right shall be  unconditional  and may be exercised in the
sole discretion of TFM by written notice to KCS given by the Chairman of TFM and
without any other corporate approvals of TFM or GTMM.

          (a)  Closing  Of  The   Repurchase.   Subject  to  any  STB   approval
     requirements,  the  "Repurchase  Closing"  shall  take  place on the  fifth
     business day after  receipt of such notice by KCS at such time and place as
     agreed to in writing by KCS and TFM. At the Repurchase  Closing and subject
     to any STB orders or  directions,  TFM shall pay the Purchase Price for its
     repurchase of the  Transferred  Shares in cash by wire transfer of same day
     funds.  At  the  Repurchase  Closing,   KCS  shall  deliver  to  TFM  stock
     certificates  representing  the  Transferred  Shares  endorsed  in blank or
     accompanied by duly executed  assignment  documents or, if the

                                      -14-
<PAGE>

     Transferred  Shares are being held by the  Trustee  pursuant  to the Voting
     Trust Agreement, KCS shall deliver to TFM a certificate certifying that KCS
     has given the  Trustee  irrevocable  instructions  to  deliver to TFM stock
     certificates  representing  the  Transferred  Shares  endorsed  in blank or
     accompanied by duly executed assignment documents.

          (b) Termination Of The Repurchase  Right. If not exercised  within two
     years  of the  date  of this  Agreement,  TFM's  right  to  repurchase  the
     Transferred Shares under ss.7.1 shall expire.

          (c) Termination of Agreement. Upon any such repurchase, this Agreement
     shall  automatically  terminate  and  be of no  further  force  or  effect;
     provided,  however, that in the event of termination of this Agreement,  if
     TFM shall for any reason reacquire the Transferred Shares, then the parties
     intend for the terms and conditions of the 2002 Stock  Purchase  Agreement,
     the GTFM bylaws,  and the Shareholders  Agreement to become again valid and
     fully enforceable against the parties thereto.



                                 ARTICLE VIII.
                                COVENANTS OF KCS

     8.1 Except with the written  consent of TFM, KCS shall not, for a period of
five years from the date hereof, sell, lease or encumber,  or permit MX to sell,
lease or encumber,  the northern half of the railroad  bridge between Laredo and
Nuevo Laredo.



                                  ARTICLE IX.
                   REMEDIES FOR BREACHES OF THIS AGREEMENT

     9.1 Survival of Representations and Warranties.  All of the representations
and  warranties  of GTMM and TFM  contained  in Article  III above  (other  than
ss.3.19 above) shall survive the Initial Closing  hereunder and continue in full
force and effect for a period of two years thereafter;  provided,  however, that
the representations and warranties  contained in ss.3.19 above shall survive the
Initial Closing  hereunder and continue in full force and effect for a period of
five years thereafter.  All of the other  representations  and warranties of the
Parties  contained  in  this  Agreement   (including  the   representations  and
warranties of the Parties contained in Article II above and the  representations
and  warranties of GTMM and TFM contained in ss.3.9 above) shall survive for the
applicable statutes of limitations.

     9.2     Indemnification Provisions for Benefit of KCS.

          (a)  In  the  event   either   GTMM  or  TFM   breaches   any  of  its
     representations,  warranties, and covenants contained herein, and, if there
     is an applicable  survival period  pursuant to ss.9.1 above,  provided that
     KCS makes a written claim for indemnification  within such survival period,
     then GTMM and TFM,  jointly and severally,  agree to indemnify KCS from and
     against any Adverse  Consequences KCS may suffer through and after the date
     of the claim for  indemnification  (including any Adverse  Consequences KCS
     may suffer after the end of any

                                      -15-
<PAGE>

     applicable  survival period)  resulting from,  arising out of, or caused by
     the breach of any such representation or warranty or covenant.

          (b) The  obligation  of GTMM  and TFM to  indemnify  KCS  pursuant  to
     ss.9.2(a)  above for any  breach of  representation  or  warranty  shall be
     limited to 51% of the Adverse Consequences and then only to the extent that
     such 51% of the  Adverse  Consequences  amount  to,  in the  aggregate,  $2
     million or more; provided, that for purposes of calculating this limitation
     on  indemnification,  (i) Adverse  Consequences shall be calculated without
     regard  to any  Material  Adverse  Effect  and (ii)  shall not apply to any
     Adverse  Consequences  arising  out of or  resulting  from  any  action  or
     omission on the part of GTMM or TFM or any of their  respective  affiliates
     that involve a crime, fraud, willful misconduct or gross negligence.

     9.3  Indemnification  Provisions  for Benefit of GTMM and TFM. In the event
KCS breaches any of its  representations,  warranties,  and covenants  contained
herein, and, if there is an applicable survival period pursuant to ss.9.1 above,
provided that GTMM or TFM makes a written claim for indemnification  against KCS
within such survival  period,  then KCS agrees to indemnify  the claiming  Party
from and against the entirety of any Adverse  Consequences such Party may suffer
through  and  after the date of the claim  for  indemnification  (including  any
Adverse  Consequences  GTMM or TFM may  suffer  after the end of any  applicable
survival period) resulting from,  arising out of, relating to, in the nature of,
or caused by the breach.

     9.4  Determination  of  Adverse   Consequences.   The  Parties  shall  make
appropriate  adjustments for Tax  consequences  and insurance  coverage and take
into  account the time cost of money in  determining  Adverse  Consequences  for
purposes of this Article IX. All indemnification  payments under this Article IX
shall be deemed adjustments to the Purchase Price.

     9.5 Specific Performance. Notwithstanding the indemnification provisions of
this Article IX, the Parties acknowledge that monetary damages would not provide
an adequate  remedy in the event that one or more Parties were to fail to comply
with the terms and conditions of the Agreement.  Accordingly,  the Parties agree
that,  in addition to any right to monetary  damages  that any Party may have at
law and under the terms of this  Agreement,  each Party shall be entitled to the
equitable  remedy of specific  performance  in order to force any other Party to
strictly comply with the terms and conditions of this Agreement.


                                   ARTICLE X.
                                  TERMINATION

     10.1  Termination  of Agreement.  Certain of the Parties may terminate this
Agreement as provided below:

          (a) this Agreement may terminated by mutual written  consent of all of
     the Parties at any time prior to the Initial Closing;

          (b) KCS may terminate  this Agreement by giving written notice to GTMM
     and TFM at any time prior to the  Initial  Closing in the event GTMM or TFM
     has breached any material

                                      -16-
<PAGE>

     representation,  warranty,  or covenant  contained in this Agreement in any
     material respect, KCS has notified GTMM and TFM of
     the breach,  and the breach has  continued  without cure for a period of 30
     days after the notice of breach; and

          (c) GTMM and TFM may terminate this Agreement by giving written notice
     to KCS at any time  prior  to the  Initial  Closing  in the  event  KCS has
     breached any material  representation,  warranty,  or covenant contained in
     this Agreement in any material respect, GTMM or TFM has notified KCS of the
     breach,  and the breach has continued  without cure for a period of 30 days
     after the notice of breach.

     10.2 Effect of Termination. If any Party terminates this Agreement pursuant
to ss.10.1  above,  all rights and  obligations of the Parties  hereunder  shall
terminate  without any liability of any Party to any other Party (except for any
liability of any Party then in breach).


                                   ARTICLE XI.
                                  MISCELLANEOUS

     11.1  Amendments  and Waivers.  No amendment or waiver of any  provision of
this Agreement, and no consent to any departure from any of such terms by any of
the  Parties,  shall be valid  unless the same shall be in writing and signed by
all of the Parties (except that a permitted waiver of a Closing  condition under
ss. 6.2 or ss. 6.3 hereof need not be signed by all  Parties).  No waiver by any
Party of any  default,  misrepresentation,  or breach of  warranty  or  covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent  default,  misrepresentation,  or  breach  of  warranty  or  covenant
hereunder  or affect  in any way any  rights  arising  by virtue of any prior or
subsequent such occurrence.

     11.2 Entire Agreement.  This Agreement (including the documents referred to
herein)  constitutes the entire agreement among the Parties  concerning the sale
of  the   Transferred   Shares  by  TFM  to  KCS,  and   supersedes   any  prior
understandings,  agreements, or representations by or among the Parties, written
or oral,  to the extent they  related in any way to the subject  matter  hereof;
provided,   that  in  the  event  of   termination   of  this  Agreement  or  if
notwithstanding  the  occurrence  of a  Closing,  if TFM  shall  for any  reason
reacquire the MX Shares, then the parties intend for the terms and conditions of
the 2002  Stock  Purchase  Agreement,  the  GTFM  bylaws,  and the  Shareholders
Agreement  to become  again  valid and fully  enforceable  against  the  parties
thereto.

     11.3  Counterparts.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

     11.4 No  Third-Party  Beneficiaries.  This  Agreement  shall not confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

     11.5  Succession and  Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of its
rights,  interests,  or obligations hereunder without the prior written approval
of all of the Parties; provided,  however, that KCS may (i)

                                      -17-
<PAGE>

assign any or all of its rights and  interests  hereunder  to one or more of its
Affiliates  and (ii)  designate  one or more of its  Affiliates  to perform  its
obligations hereunder (in any or all of which cases KCS nonetheless shall remain
responsible for the performance of all of its obligations hereunder).

     11.6  Headings.  The  section  headings  contained  in this  Agreement  are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

     11.7  Notices.   All  notices,   requests,   demands,   claims,  and  other
communications hereunder shall be made in writing (including fax communications,
with delivery  confirmation as provided hereunder) and delivered at the domicile
or fax number of the addressee thereof,  or at such other domicile as any of the
Parties  shall notify the other  Parties in writing as provided in this Section.
Any notice,  request,  demand, claim, or other communication  hereunder shall be
effective when received by the Party to whom it is addressed.  All communication
by fax shall be  affirmatively  confirmed by confirmation  page from the sending
fax  machine  and by  telephonic  confirmation  of  receipt by an officer of the
receiving  Party.  For  purposes of this  Section  and until  changed by written
notice to each of the other Parties, each of the Parties designates the domicile
for  receipt of notices  and  communications  as is written  below such  Party's
corporate name in the signature pages hereof.

     11.8  Expenses.  Whether  of  not  the  transaction  contemplated  by  this
Agreement is consummated, all costs and expenses, including (without limitation)
legal  fees,  consulting  fees,  finder's  fees,  investment  banking  fees  and
trustee's  fees,  incurred in connection with this Agreement and the transaction
contemplated thereby shall be paid by the Party incurring such costs or expenses
except as otherwise provided in this Agreement.

     11.9 Announcements.  The Parties shall consult with one another with regard
to all media  releases and other  announcements  issued at or prior to a Closing
concerning the transaction contemplated by this Agreement; and, except as may be
required by  applicable  laws or the  applicable  rules and  regulations  of any
governmental  agency or stock  exchange,  no Party  hereto  shall issue any such
press release or other publicity concerning the transaction contemplated by this
Agreement without the prior written consent of the other Parties.

     11.10 Governing Law; Dispute Resolution.

               (a)  Resolution  of any and all disputes  between KCS, on the one
          hand,  and one or more of GTMM or TFM, on the other hand (each of KCS,
          on the one hand,  and one or more of GTMM or TFM, on the other hand, a
          "Dispute Party" and together,  the "Dispute  Parties") arising from or
          in connection with this Agreement or any transactions  contemplated by
          this Agreement,  whether based on contract,  tort, common law, equity,
          statute,  regulation,  order  or  otherwise,   ("Disputes")  including
          Disputes arising in connection with claims by third persons,  shall be
          exclusively  governed by and settled in accordance with the provisions
          of this  ss.11.10;  provided,  that the  foregoing  shall not preclude
          equitable or other judicial relief to enforce the provisions hereof or
          to preserve the status quo pending resolution of Disputes hereunder.

                                      -18-
<PAGE>

               (b) THIS  AGREEMENT,  THE LEGAL  RELATIONS  BETWEEN  THE  PARTIES
          HERETO AND THE ADJUDICATION AND ENFORCEMENT THEREOF, SHALL BE GOVERNED
          BY AND  INTERPRETED  AND CONSTRUED IN ACCORDANCE  WITH THE SUBSTANTIVE
          LAWS OF THE  STATE OF  DELAWARE  AND THE  FEDERAL  LAWS OF THE  UNITED
          STATES  OF  AMERICA,  WITHOUT  REGARD  TO  APPLICABLE  CHOICE  OF  LAW
          PROVISIONS THEREOF.

               (c) As to any  Dispute  which  is not  resolved  in the  ordinary
          course of business,  the Dispute  Parties  shall first attempt in good
          faith  to  promptly  resolve  any  Dispute  by  negotiations   between
          executives.  Either of the Dispute Parties may initiate this procedure
          by delivery of written notice of the Dispute (the "Dispute Notice") to
          the  other.  Not later  than 20 days  after  delivery  of the  Dispute
          Notice,  one executive of one of the Dispute Parties with authority to
          settle  the  Dispute  shall meet with the one  executive  of the other
          Dispute  Party with  authority  to settle the Dispute at a  reasonably
          acceptable  time and place,  and thereafter as such  executives  shall
          deem  reasonably  necessary.  The executives  shall exchange  relevant
          information  and  endeavor to resolve the  Dispute.  Prior to any such
          meeting,  each Dispute Party's  executive shall advise the other as to
          any individuals  who will attend such meeting with the executive.  All
          negotiations  pursuant to this  ss.11.10(c)  shall be confidential and
          shall be treated as compromise  negotiations  for purposes of Rule 408
          of the Federal  Rules of Evidence and  similarly  under other local or
          foreign rules of evidence.

               (d) Each Dispute  Party hereby  agrees to submit all Disputes not
          resolved   pursuant  to  ss.11.10(c)   hereof  to  final  and  binding
          arbitration in New York,  New York.  Either Dispute Party may initiate
          such  arbitration by delivery of a demand  therefor (the  "Arbitration
          Demand") to the other  Dispute Party not sooner than 60 days after the
          date of  delivery  of the  Dispute  Notice  but  promptly  thereafter;
          provided,  that  if a  Dispute  Party  rejects  participation  in  the
          procedures  provided  under  ss.11.10(c),  the other Dispute Party may
          initiate  arbitration  at such  earlier time as such  rejection  shall
          become reasonably  apparent,  and, whenever  arbitration is initiated,
          may seek  recovery  of any  damages  or  expenses  arising  from  such
          rejection,  including attorney's fees and expenses,  Arbitration Costs
          (as defined below) in connection with arbitration hereunder.

                    (i)   Three    Arbitrators    shall   be   appointed    (the
               "Arbitrators"),  one of whom shall be  appointed  by KCS,  one by
               GTMM, and the third of whom, who shall act as the chairman of the
               arbitral   tribunal,   shall  be   appointed  by  the  first  two
               Arbitrators  within 10 business days of the first two Arbitrators
               confirmation by the American Arbitration  Association.  If either
               Dispute Party fails to appoint an  Arbitrator  within 10 business
               days of a request in writing by the other  Dispute Party to do so
               or if the first two  Arbitrators  cannot agree on the appointment
               of  the  third  Arbitrator  within  10  business  days  of  their
               confirmation by the American Arbitration  Association,  then such
               Arbitrator  shall  be  appointed  by  the  American   Arbitration
               Association  in  accordance  with its  International  Arbitration
               Rules. As soon as the arbitration  tribunal has been convened,  a
               hearing  date shall be set within 15 days  thereafter;  provided,
               that the  Arbitrators  may  extend the date of the  hearing  upon
               request of any Dispute  Party to the extent  necessary  to insure
               that such Dispute  Party is given a reasonable  period of time to
               prepare  for  the  hearing.  Written  submittals  in the  English
               language shall be presented and exchanged by

                                      -19-
<PAGE>

               both Dispute  Parties five business days before the hearing date.
               At such time the Dispute  Parties shall also  exchange  copies of
               all  documentary  evidence  upon  which  they  will  rely  at the
               arbitration  hearing and a list of the witnesses whom they intend
               to call to testify at the  hearing.  The  Arbitrators  shall make
               their  determination as promptly as practicable  after conclusion
               of the hearing.

                    (ii) The  arbitration  shall  be  conducted  in the  English
               language pursuant to the Commercial Arbitration Rules of American
               Arbitration Association.  Notwithstanding the foregoing, (A) each
               Dispute Party shall have the right to audit the books and records
               of the other  Dispute  Party that are  reasonably  related to the
               Dispute;  (B) each  Dispute  Party  shall  provide  to the other,
               reasonably  in advance of any  hearing,  copies of all  documents
               which a Dispute Party intends to present in such hearing; (C) all
               hearings shall be conducted on an expedited schedule; and (D) all
               proceedings  shall be  confidential,  except that either  Dispute
               Party may at its expense make a stenographic record thereof.

                    (iii)  The  Arbitrators   shall  endeavor  to  complete  all
               hearings  not later than 120 days after their  tribunal  has been
               convened, and shall make a final award as promptly as practicable
               thereafter. Such award shall be communicated,  in writing, by the
               Arbitrators to the Dispute  Parties,  and shall contain  specific
               findings of fact and  conclusions  of law in accordance  with the
               governing law set forth in  ss.11.10(c)  of this  Agreement.  Any
               award of such  Arbitrators  shall be final and  binding  upon the
               Parties to this Agreement and shall not be attacked by any of the
               Parties to this Agreement in any court of law and may be enforced
               in any court having jurisdiction,  including expressly the courts
               of the  State of  Delaware,  United  States of  America,  and the
               courts of the Federal District of Mexico.  The Arbitrators  shall
               apportion  all costs and expenses of the  arbitration,  including
               the Arbitrators' fees and expenses,  fees and expenses of experts
               and  fees  and  expenses  of  translators  ("Arbitration  Costs")
               between the  prevailing and  non-prevailing  Dispute Party as the
               Arbitrators  shall  deem fair and  reasonable.  In  circumstances
               where (A) a Dispute  has been  asserted  or  defended  against on
               grounds that the Arbitrators deem manifestly unreasonable, or (B)
               the  non-prevailing  Dispute Party has rejected  participation in
               procedures  under  ss.11.10(c),  the  Arbitrators  may assess all
               Arbitration  Costs against the  non-prevailing  Dispute Party and
               may  include  in  the  award  the  prevailing   Dispute   Party's
               attorney's  fees  and  expenses  in  connection  with any and all
               proceedings under this ss.11.10.  Notwithstanding  the foregoing,
               in no  event  may  the  arbitrator  award  multiple  or  punitive
               damages.

               (e)  Pursuant  to an  agreement  of  the  Parties  or a  judicial
          determination  that a Dispute  is not  subject  to final  and  binding
          arbitration  as set  forth in  ss.11.10,  KCS and each of GTMM and TFM
          irrevocably agrees that any legal action or proceeding against it with
          respect to this  Agreement and any  transaction  contemplated  by this
          Agreement  shall  be  brought  only  in the  courts  of the  State  of
          Delaware, or of Federal courts of the United States of America sitting
          in Delaware, and by execution and delivery of this Agreement,  KCS and
          each of GTMM and TFM irrevocably submits to the venue and jurisdiction
          of each such court and  irrevocably  waives any

                                      -20-
<PAGE>

          objection  or  defense  such  party  may  have to  venue  or  personal
          jurisdiction in any such court for the purpose of resolving any claim,
          dispute,  cause of action  arising out of or related to this Agreement
          (including  any claim that the suit or action  has been  brought in an
          inconvenient  forum and any right to which it may become  entitled  on
          account of place of residence or domicile), the alleged breach of this
          Agreement,  the  enforcement  of the terms of this  Agreement  and the
          other terms contemplated  hereby. A final judgment in any suit, action
          or  proceeding  shall be  conclusive  and may be enforced in any court
          where jurisdiction over the Parties may be had or in which the Parties
          are subject to service of process.

               (f) Each of the Parties irrevocably  appoints CT Corporation (the
          "Process  Agent"),  at 1209 Orange Street,  Wilmington,  County of New
          Castle,  Delaware  19801  (302-658-7581),  as its  agent  and true and
          lawful  attorney-in-fact  in its  name,  place  and stead to accept on
          behalf of each of the  Parties  and their  respective  properties  and
          revenues, service of copies of the summons and complaint and any other
          process  which may be served in any such  suit,  action or  proceeding
          brought in the State of Delaware,  and each of the Parties agrees that
          failure of the Process Agent to give any notice of any such service of
          process to any of the Parties  shall not impair or affect the validity
          of such service or the enforcement of any judgment based thereon.

     11.11 Severability.  If any one or more of the provisions contained in this
Agreement  or in any  document  executed in  connection  herewith  shall be held
invalid,  illegal or unenforceable under applicable law, the validity,  legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired and shall remain in full force and effect.

     11.12   Construction.   The  Parties  have  participated   jointly  in  the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations promulgated thereunder,  unless the context requires otherwise.  The
word "including" shall mean including without limitation.

     11.13  Incorporation  of Exhibits,  Annexes,  and Schedules.  The Exhibits,
Annexes,  and Schedules  identified in this Agreement are incorporated herein by
reference and made a part hereof.


                                  ARTICLE XII.
                                  DEFINITIONS

      "Adverse Consequences" means all actions,  suits,  proceedings,  hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders,  decrees,  rulings,  damages, dues, penalties,  fines, costs, reasonable
amounts paid in settlement,  liabilities,  obligations,  Taxes,  Liens,  losses,
expenses,  and fees,  including  court costs and reasonable  attorneys' fees and
expenses.


                                      -21-
<PAGE>

      "Affiliate"  has the  meaning  set forth in Rule 12b-2 of the  regulations
promulgated under the Securities Exchange Act of 1934, as amended.

      "Arbitration Costs" has the meaning set forth in ss.11.10(d) above.

      "Arbitration Demand" has the meaning set forth in ss.11.10(d) above.

      "Arbitrators" has the meaning set forth in ss.11.10(d) above.

      "Benefit Arrangement" means any employment,  severance or similar contract
or arrangement  (whether or not written) or any plan,  policy,  fund, program or
contract or  arrangement  (whether or not written)  providing for  compensation,
bonus,  profit-sharing,  stock option,  or other stock  related  rights or other
forms of  incentive  or  deferred  compensation,  vacation  benefits,  insurance
coverage (including any self-assured arrangements),  health or medical benefits,
disability benefits, workers' compensation,  supplemental unemployment benefits,
severance  benefits  and   post-employment  or  retirement  benefits  (including
compensation, pension, health, medical or life insurance or other benefits) that
(i) is not an Employee Plan, (ii) is entered into,  maintained,  administered or
contributed to, by MX or TMX or any of their ERISA Affiliates,  and (iii) covers
any employee or former employee of MX or TMX.

      "Closing" has the meaning set forth in ss.1.2 above.

      "Closing Date" has the meaning set forth in ss.1.2 above.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Confidential   Information"  means,  with  respect  to  MX  or  TMX,  all
proprietary and confidential  business information and data of MX or TMX that is
not generally known by or readily  ascertainable  by or available to, on a legal
or authorized basis, the general public;  provided,  however, that "Confidential
Information"  shall not include any  information:  (a) which is already known by
the receiving  Party; or (b) which before being divulged by the disclosing Party
(i) has become  generally  known to the public  through no  wrongful  act of the
receiving Party or its  representatives or agents, (ii) has been received by the
receiving Party from a third party without (to the receiving Party's  knowledge)
restriction  on disclosure  and without (to the receiving  Party's  knowledge) a
breach by the  third  party of an  obligation  of  confidentiality,  or (iii) is
independently  developed by the receiving Party without use of the  Confidential
Information received from a disclosing Party.

      "Disclosure Schedule" has the meaning set forth in Article III above.

      "Dispute Notice" has the meaning set forth in ss.11.10(c) above.

      "Dispute Parties" has the meaning set forth in ss.11.10(a) above.

      "Dispute Party" has the meaning set forth in ss.11.10(a) above.



                                      -22-

<PAGE>

      "Disputes" has the meaning set forth in ss.11.10(a) above.

      "Employee Benefit Plan" means any "employee benefit plan" (as such term is
defined  in ERISA  ss.3(3))  and any other  employee  benefit  plan,  program or
arrangement of any kind maintained by MX and TMX.

      "Employee  Plan" means any "employee  benefit plan", as defined in ss.3(3)
of ERISA,  that (i) is subject to any  provision of ERISA,  (ii) is  maintained,
administered  or contributed  to by MX or TMX or any of their ERISA  Affiliates,
and (iii) covers any employee or former employee of MX or TMX.

      "Environmental   Laws"  means  any  applicable   federal,   state,  local,
provincial or foreign law (including,  without limitation,  common law), treaty,
judicial  decision,  regulation,  rule,  judgment,  order,  decree,  injunction,
permit,  or legally  binding  governmental  restriction or  requirement,  or any
legally binding agreement with any governmental  authority or other third party,
relating  to human  health and  safety (as  relating  to the  environment),  the
environment  or, as impacting  human health or the  environment,  to pollutants,
contaminants,  wastes  or  chemicals  or  any  toxic,  radioactive,   ignitable,
corrosive, reactive or otherwise hazardous substances, wastes or materials.

      "Environmental  Permits" means, as to any entity,  all permits,  licenses,
franchises,   certificates,   approvals  and  other  similar  authorizations  of
governmental  authorities  required by Environmental Laws regarding the business
of such entity as currently conducted.

      "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  as
amended.

      "ERISA  Affiliate" means each entity which is treated as a single employer
with MX for purposes of Code ss.414.

      "Financial Statement" has the meaning set forth in ss.3.5 above.

      "GAAP" means United States generally accepted accounting  principles as in
effect from time to time.

      "GTFM" has the meaning set forth in the Recitals above.

      "GTMM" has the meaning set forth in the preface above.

      "Hazardous  Substances"  means,  in  each  case  as  regulated  under  any
Environmental Law, any pollutant,  contaminant,  waste or chemical or any toxic,
radioactive,  ignitable,  corrosive,  reactive or otherwise hazardous substance,
waste or material,  or any substance,  waste or material  having any constituent
elements  displaying any of the foregoing  characteristics,  including,  without
limitation, petroleum, its derivatives,  by-products and other hydrocarbons, and
any substance, waste or material regulated under any Environmental Law.

                                      -23-
<PAGE>

      "Income  Tax" means any  federal,  state,  local,  or foreign  income tax,
including any interest, penalty, or addition thereto, whether disputed or not.

      "Initial Closing" has the meaning set forth in ss.1.2 above.

      "Initial Closing Date" has the meaning set forth in ss.1.2 above.

      "Initial Purchase Price" has the meaning set forth in ss.1.3 above.

      "Initially  Transferred  Shares" has the meaning set forth in the Recitals
      above.

      "KCS Credit  Agreement" means the Amended and Restated  Agreement dated as
of June 12, 2002 among Kansas City  Southern,  The Kansas City Southern  Railway
Company,  the Lenders Party thereto,  and J.P.Morgan Chase Bank,  Administrative
Agent.

      "KCSR" has the meaning set forth in the Recitals above.

      "Knowledge" means actual knowledge after reasonable investigation.

      "Lien"  means,   with  respect  to  any  asset,   any  mortgage,   pledge,
encumbrance,  charge,  or other security interest of any kind in respect of such
asset,  other than (a) mechanic's,  materialmen's,  and similar liens, (b) liens
for Taxes not yet due and payable , (c) purchase  money liens and liens securing
rental payments under capital lease arrangements, and (d) other liens arising in
the  Ordinary  Course  of  Business  and not  incurred  in  connection  with the
borrowing of money.

      "Material  Adverse Effect" means,  with respect to MX, a change,  event or
occurrence  that has had, or is  reasonably  likely to have, a material  adverse
effect on the business, assets, properties,  liabilities, financial condition or
results of operations of MX and its Subsidiaries,  taken as a whole,  other than
any change,  event or  occurrence  resulting  from (i)  changes in the  railroad
industry  in the  United  States or Mexico  generally,  (ii)  changes in general
economic  conditions in the United States or the securities  markets in general,
(iii) terrorist activities or the commencement or escalation of any war or armed
hostilities,  which do not disproportionately affect MX or its Subsidiaries,  or
(iv) performance of this Agreement in accordance with its terms.

      "MM" has the meaning set forth in the Recitals above.

      "Most Recent Balance Sheet" means the balance sheet  contained  within the
Most Recent Financial Statements.

      "Most  Recent  Financial  Statements"  has the meaning set forth in ss.3.5
above.

      "Most Recent Fiscal Month End" has the meaning set forth in ss.3.5 above.

      "Most Recent Fiscal Year End" has the meaning set forth in ss.3.5 above.

                                      -24-
<PAGE>

      "Multiemployer Plan" means a multiemployer plan, as defined in ss.3(37) of
ERISA, which is subject to ss.4022A of ERISA.

      "MX" has the meaning set forth in the Recitals above.

      "MX Shares" has the meaning set forth in the Recitals above.

      "Ordinary  Course of  Business"  means  the  ordinary  course of  business
consistent with past custom and practice (including with respect to quantity and
frequency).

      "Party" has the meaning set forth in the preface above.

      "Person"  means  an  individual,   a   partnership,   a  corporation,   an
association,  a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department,  agency, or political
subdivision thereof).

      "Process Agent" has the meaning set forth in ss.11.10(f) above.

      "Purchase Option" has the meaning set forth in ss.1.4 above.

      "Purchase Price" has the meaning set forth in ss.1.3 above.

      "Shareholders  Agreement"  means  the  Agreement  dated  May 1997 by and
among KCS, Caymex Transportation,  Grupo Servia, S.A. de C.V.,  Transportacion
Maritima Mexicana, S.A. de C.V. and TMM Multimodal, S.A. de C.V.

      "Subsequent Closing" has the meaning set forth in ss.1.2 above.

      "Subsequently  Transferred  Shares"  has  the  meaning  set  forth  in the
      Recitals above.

      "Subsidiary"  means any  corporation  with  respect  to which a  specified
Person (or a Subsidiary  thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient  securities to elect a majority
of the directors.

      "Surface  Transportation  Board" or "STB"  shall  mean  that  government
agency that  administers  the ICC  Termination Act of 1995 Pub. L. No. 104-88,
109 Stat. 803, enacted December 29, 1995.

      "Tax" means any  federal,  state,  local,  or foreign tax,  including  any
interest, penalty, or addition thereto, whether disputed or not.

      "TFM" has the meaning set forth in the preface above.

      "Title IV Plan" means an Employee  Plan subject to Title IV of ERISA other
than any Multiemployer Plan.

                                      -25-
<PAGE>

      "TMX" has the meaning set forth in the Recitals above.

      "Transferred Shares" has the meaning set forth in the Recitals above.

                                     *****



















                                      -26-
<PAGE>




      IN WITNESS  WHEREOF,  the Parties have executed  this  Agreement as of the
date first above written.


                                    KANSAS CITY SOUTHERN


                                    By:       /s/ M.R. Haverty
                                       ---------------------------------------
                                    Name:     Michael R. Haverty
                                    Title:    Chairman, President & CEO


                                    GRUPO TMM, S.A.


                                    By:       /s/ Jose Serrano
                                       ---------------------------------------
                                    Name:     Jose Serrano
                                    Title:    Chairman


                                    By:       /s/ Javier Segovia
                                       ---------------------------------------
                                    Name:     Javier Segovia
                                    Title:    President


                                    TFM, S.A. de C.V.


                                    By:       /s/ Mario Mohar
                                       ---------------------------------------
                                    Name:     Mario Mohar
                                    Title:    President


                                    By:       /s/ Javier Segovia
                                       ---------------------------------------
                                    Name:     Javier Segovia
                                    Title:    Director