**Exhibit 4(e)**

** **

**U.S. SECURITYAGREEMENT**

** **

**Dated as of April29, 2003**

** **

**among**

** **

**GRUPO MINEROMEXICO, S.A. DE C.V.,**

** **

**MINERA MEXICO,S.A. DE C.V.,**

** **

**INDUSTRIAL MINERAMEXICO, S.A. DE C.V.,**

**MINERA MEXICOINTERNACIONAL, INC.,**

**MEXICANA DE COBRE,S.A. DE C.V.,**

**MINERALESMETALICOS DEL NORTE, S.A.,**

**MEXICANA DECANANEA, S.A. DE C.V.,**

**MEXICANA DEL ARCO,S.A. DE C.V.,**

**MINERALES Y MINASMEXICANAS, S.A. DE C.V.,**

**COMPANIA DETERRENOS E INVERSIONES DE SAN LUIS POTOSI,**

**S.C. POR A., S.A.,**

**MEXICO COMPAÑIAINMOBILIARIA, S.A., and**

**PROYECCIONESURBANISTICAS, S. DE R.L. DE C.V.**

 

**and**

 

**HSBC BANK USA,**

**as Shared Paymentand Collateral Agent**

** **

**and**

** **

**HSBC BANK USA,**

** **

**acting in itsindividual capacity**

 

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**TABLE OF CONTENTS**

** **
| ARTICLE 1 | DEFINITIONS                                                     |
|-----------|-----------------------------------------------------------------|
|      |                                                            |
| 1.1       | Certain Defined Terms                                           |
|      |                                                            |
| 1.2       | Other Interpretive Provisions                                   |
|      |                                                            |
| ARTICLE 2 | PLEDGE OF COLLATERAL                                            |
|      |                                                            |
| 2.1       | Grant of Security Interest                                      |
|      |                                                            |
| 2.2       | Continuing Security Interest; Transfer of  Notes                |
|      |                                                            |
| 2.3       | Grantors Remain Liable                                          |
|      |                                                            |
| 2.4       | Security Interest Absolute, etc                                 |
|      |                                                            |
| 2.5       | Waiver, etc                                                     |
|      |                                                            |
| 2.6       | Postponement of Subrogation and  Contribution                   |
|      |                                                            |
| 2.7       | Control  Accounts                                               |
|      |                                                            |
| 2.8       | Operational Accounts                                            |
|      |                                                            |
| ARTICLE 3 | FURTHER ASSURANCES; REMEDIES                                    |
|      |                                                            |
| 3.1       | Further Assurances; Remedies                                    |
|      |                                                            |
| ARTICLE 4 | REPRESENTATIONS AND WARRANTIES                                  |
|      |                                                            |
| 4.1       | Representations and Warranties                                  |
|      |                                                            |
| ARTICLE 5 | THE SHARED PAYMENT AND COLLATERAL AGENT                         |
|      |                                                            |
| 5.1       | Shared Payment and Collateral Agent  Appointed Attorney-in-Fact |
|      |                                                            |
| 5.2       | Shared Payment and Collateral Agent May  Perform                |
|      |                                                            |
| 5.3       | Shared Payment and Collateral Agent Has No  Duty                |
|      |                                                            |
| 5.4       | Reasonable  Care                                                |
|      |                                                            |
| ARTICLE 6 | MISCELLANEOUS                                                   |
|      |                                                            |
| 6.1       | Authorization to file Financing Statements                      |
|      |                                                            |
| 6.2       | Limitation of Rights; No Waiver                                 |
|      |                                                            |
| 6.3       | Notices                                                         |
|      |                                                            |
| 6.4       | Expenses; Indemnity                                             |
|      |                                                            |
| 6.5       | Amendments,  etc.                                               |
|      |                                                            |
| 6.6       | Successors and Assigns                                          |
|      |                                                            |
| 6.7       | Additional Grantors                                             |
|      |                                                            |
| 6.8       | Third Party Beneficiaries                                       |
|           |                                                                 |  |

 

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| 6.9              | Survival                                  |
|------------------|-------------------------------------------|
|             |                                      |
| 6.10             | Captions                                  |
|             |                                      |
| 6.11             | Counterparts                              |
|             |                                      |
| 6.12             | Governing  Law                            |
|             |                                      |
| 6.13             | Consent to Jurisdiction; Process Agent    |
|             |                                      |
| 6.14             | Waiver of Jury Trial                      |
|             |                                      |
| 6.15             | Severability                              |
|             |                                      |
| 6.16             | Currency                                  |
|             |                                      |
| Exhibit A        | Form of Joinder Agreement                 |
| Exhibit B        | Form of Shared Account Control Agreements |
|             |                                      |
| Schedule  4.1(c) | Chief  Executive Offices                  |
|                  |                                           |  |  |

 

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***U.S.SECURITY AGREEMENT***

 

***THISU.S. SECURITY AGREEMENT******,*** dated as of April 29, 2003 (this “***Agreement***”), is made by each ofGRUPO MINERO MEXICO, S.A. DE C.V., a *sociedad anónima de capital variable*organized under the laws of Mexico (“**GMM**”), MINERA MEXICO, S.A. DE C.V., a *sociedadanónima de capital variable* organized under the laws of Mexico (“**MM**”),****INDUSTRIALMINERA MEXICO, S.A. DE C.V., a *sociedad anónima de capital variable*organized under the laws of Mexico (“**IMMSA**”), MINERA MEXICO INTERNACIONAL, INC.,a New York corporation (“**MMI**”), MEXICANA DE COBRE, S.A.DE C.V., a *sociedad anónima de capital variable* organized under thelaws of Mexico (“**Mexcobre**”), MINERALES METALICOS DEL NORTE, S.A., a *sociedadanónima* organized under the laws of Mexico (“**Mimenosa**”), MEXICANA DECANANEA, S.A. DE C.V., a *sociedad anónima de capital variable*organized under the laws of Mexico (“**Mexcananea**”), MEXICANA DEL ARCO, S.A. DEC.V., a *sociedadanónima de capital variable* organized under the laws of Mexico (“**Mexarco**”),MINERALES Y MINAS MEXICANAS, S.A. DE C.V., a *sociedad anónima de capital variable*organized under the laws of Mexico (**“MMM”**),

COMPANIA DE TERRENOS EINVERSIONES DE SAN LUIS POTOSÍ, S.C. POR A., S.A., a *sociedad civil por acciones**sociedadanónima* organized under the laws of Mexico (“**TISLP**”), MEXICO COMPAÑIAINMOBILIARIA, S.A., a *sociedad anónima* organized under the lawsof Mexico (“**MCI**”),****and PROYECCIONES URBANISTICAS, S. DE R.L.DE C.V.,****a*sociedadde responsabilidad limitada de capital variable* organized under thelaws of Mexico (“***PU***”, and,together with GMM, MM, IMMSA, MMI, Mexcobre, Mimenosa, Mexcananea, Mexarco,MMM, TISLP, and MCI, and any other Person that becomes a party to thisAgreement by executing a Joinder Agreement (hereinafter defined), eachindividually a “**Grantor**” and collectively the “**Grantors**”), in favor of HSBCBANK USA,a banking corporation and trust company organized under the laws of****NewYork, not in its individual capacity, but solely as shared payment andcollateral agent under the Common Agreement (hereinafter defined) (in suchcapacity, the “**Shared Payment and Collateral Agent**”), and HSBC BANK USA, abanking corporation and trust company organized under the laws of New York,acting in its individual capacity solely for purposes of Section 2.7 (“**HSBC**”).

 

***WHEREAS***, theGrantors are entering into that certain Common Agreement, dated as of the datehereof (the “**Common Agreement**”) among the Grantors, the Bank Holdersparties thereto, the SEN Holders parties thereto, the Bank HoldersAdministrative Agent, the Shared Payment and Collateral Agent, the SENCollateral Agent and Grupo Mexico Export Master Trust No. 1, acting by andthrough The Bank of New York, as SEN Trustee; and

 

***WHEREAS***, as acondition precedent to the effectiveness of the Common Agreement, the Grantorshave agreed to execute and deliver this Agreement.

*** ***

***NOW, THEREFORE***, for good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the Grantors haveagreed to pledge and grant a security interest in the Collateral, to the extentthe Collateral is not subject to the Mexican Security Trust Agreement, assecurity for the Secured Obligations in the manner herein set forth.

 

Accordingly, the parties hereto agree as follows:

 

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**ARTICLE 1**

**DEFINITIONS**

 

1.1                                 *Certain Defined Terms*.  Capitalized terms defined inthe Common Agreement and used but not otherwise defined herein shall have themeaning ascribed thereto in the Common Agreement.  As used herein, the following terms shall have the followingmeanings:

 

**“AccountCollateral”** has the meaning set forth in Section2.1.

 

“**Collateral**”has the meaning set forth in Section 2.1.

 

**“DesignatedCreditors**” means, collectively, the Required BankHolders and the Required SEN Holders; provided, that during any periodwhen (a) cash is being trapped by the SEN Collateral Agent in accordance withSection 7.01(b) of the Common Agreement following an Event of Default and (b)the Restructured Debt has not been accelerated, Designated Creditors shall meanthe Required Bank Holders.

 

**“FinancialInstitution”** shall mean the financial institutionparty to any Shared Collateral Control Agreement at which the Grantors maintainany Account Collateral.

 

“**GuarantorAgreements**” has the meaning set forth in Section 2.3(a).

 

“**InventoryCollateral**” has the meaning set forth in Section 2.1.

 

“**Joinder Agreement**” means an agreementsubstantially in the form attached hereto as Exhibit A.

 

**“LenderObligations”** means the “Obligations” as defined in theCommon Agreement.

 

“**Property**”of any Person means any property, rights or revenues, or interest therein, ofsuch Person.

 

“***Secured Obligations***”means (a) the Lender Obligations and (b) the Yankee Bond Obligations.

 

“***Secured Parties***”means, collectively, the Bank Holders, the SEN Holders, the Shared Payment andCollateral Agent, the Bank Holders Administrative Agent, the SEN Trust and theYankee Bond Trustee.

 

“**SharedCollateral Control Agreement**” means any agreement entered into bythe Grantors and any Financial Institution that is (a) substantially in theform attached hereto as Exhibit B-1 (if it is a deposit account) or ExhibitB-2 (if it is a securities account) or (b) in another form reasonablysatisfactory to the Shared Payment and Collateral Agent with respect to theAccount Collateral.

 

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“**SpecifiedDefault**” means any (a) Default of the nature described in clause(a), (i) or (j) of Section 9.01 of the Common Agreement or (b) Event ofDefault.

 

“***UCC***” means theUniform Commercial Code as in effect from time to time in the State of New Yorkor the District of Columbia, as applicable.

 

**“YankeeBond Obligations”** means the obligations of theBorrower under the Yankee Bond Indenture.

 

“***Yankee Bond Trustee***”means the trustee under the Yankee Bond Indenture.

 

1.2                                 *Other Interpretive Provisions*.**  This Agreement shall be subject toparagraphs A-F set forth in Appendix A to the Common Agreement.

 

**ARTICLE2**

**PLEDGE OF COLLATERAL**

 

2.1                                 *Grant of Security Interest*.  Ascollateral security for the prompt payment in full in cash when due (whether atstated maturity, by acceleration or otherwise) of the Secured Obligations, eachGrantor hereby pledges and grants to theShared Payment and Collateral Agent, for itself and the ratable benefit of eachof the other Secured Parties, a continuing first priority security interest inand continuing lien on all of such Grantor’s right, title and interest in, toand under the following properties, assets and rights, wherever located,whether now existing or hereafter arising or acquired, and all proceeds,products and accessories thereof and thereto (collectively, the “**Collateral**”):(a) all inventory that is located in the United States consisting of coppercathodes, copper rod, copper anode, and other copper or metal products, and anyrecords, bills of lading or other documents relating thereto (collectively, the“**InventoryCollateral**”); and (b) all deposit accounts and securities accounts(as such terms are defined in the UCC) of such Grantor in the United Stateswhich are set forth on Schedule 3.27 to the Common Agreement or whichare opened by such Grantor after the date hereof (other than any PledgedAccounts (as defined in the SEN Security Agreement)) (the “**Account Collateral**”),together with all monies, credit balances and investments held therein orcredited thereto (including certificates, instruments and other documents evidencinginvestments held from time to time in any such accounts), and any and allagreements establishing such accounts. The Collateral shall not include any properties, assets and rights tothe extent the same are subject to the Mexican Security Trust Agreement.

 

2.2                                 *Continuing Security Interest; Transfer of Notes*.  This Agreement shall create a continuingsecurity interest in the Collateral and shall:

 

(a)                                  remainin full force and effect until the indefeasible payment in full in cash of allSecured Obligations;

 

(b)                                 bebinding upon each Grantor and its successors, transferees and assigns; and

 

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(c)                                  inure,together with the rights and remedies of the Shared Payment and CollateralAgent hereunder, to the benefit of the Shared Payment and Collateral Agent andeach other Secured Party.

 

Without limiting the generality of the foregoing clause(c), any Lender may assign or otherwise transfer (in whole or in part) anyNote held by it to any other Person, and such other Person shall thereuponbecome vested with all the rights and benefits in respect thereof granted tosuch Lender under any Operative Document (including this Agreement) orotherwise, subject, however, to any contrary provisions in such assignment or transfer,and to the provisions of Section 9.7 and Article 8 of the BankHolders Restructured Loan Agreement, Article II of the RestructuredTrust Indenture and Article IV of the Common Agreement.  Upon (x) the indefeasible payment in full incash of all Lender Obligations and (y) the application of any proceeds ofCollateral payable to the Yankee Bond Trustee pursuant to Section 8.02(f) ofthe Common Agreement to the payment of the Yankee Bond Obligations (or thereturn of such proceeds by the Yankee Bond Trustee to the Shared Payment andCollateral Agent in the event the holders of the Yankee Bond Obligations electnot to apply such proceeds to the payment thereof), the Shared Payment andCollateral Agent shall release the security interests granted herein.  Upon receipt of a certificate from theGrantors stating that all conditions precedent to any such release have beensatisfied, the Shared Payment and Collateral Agent will, at the sole cost andexpense of the Grantors, execute and deliver to the Grantors such documents asthe Grantors shall reasonably request to evidence such release.  Upon (x) any sale of Inventory Collateral inthe ordinary course of business or (y) any sale or other transfer of any otherCollateral permitted by the terms of Section 5.03 of the CommonAgreement, the security interest created hereunder in such sold Collateral (butnot in the proceeds thereof) shall be deemed to be automatically released andthe Shared Payment and Collateral Agent, upon receipt of a certificate from theGrantors stating that all conditions to such release have been satisfied, will,at the sole cost and expense of the Grantors, execute and deliver to theGrantors such documents as the Grantors shall reasonably request to evidencesuch release.

 

2.3                                 *Grantors Remain Liable*.  Anything herein to the contrarynotwithstanding:

 

(a)                                  eachGrantor shall remain liable under each contract and agreement to which it is aparty included in the Collateral (the “**Guarantor Agreements**”), and shall performall of its duties and obligations thereunder to the same extent as if thisAgreement had not been executed;

 

(b)                                 theexercise by the Shared Payment and Collateral Agent of any of its rightshereunder shall not release any Grantor from any of its duties or obligationsunder any Guarantor Agreement; and

 

(c)                                  neitherthe Shared Payment and Collateral Agent nor any other Secured Party shall haveany obligation or liability under any Guarantor Agreement by reason of thisAgreement, nor shall the Shared Payment and Collateral Agent or any otherSecured Party be obligated to perform any of the obligations or duties of anyGrantor under any Guarantor Agreement or to take any action to collect orenforce any claim for payment assigned under any Guarantor Agreement.

 

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2.4                                 *Security Interest Absolute**, etc*.  All rights of the Shared Payment andCollateral Agent and the security interests granted to the Shared Payment andCollateral Agent hereunder for itself and for the ratable benefit of the otherSecured Parties, and all obligations of the Grantors hereunder, shall beabsolute, unconditional and irrevocable irrespective of:

 

(a)                                  anylack of validity, legality or enforceability of the Common Agreement or anyother Operative Document;

 

(b)                                 thefailure of the Shared Payment and Collateral Agent or any other Secured Party:

 

(i)                                     toassert any claim or demand or to enforce any right or remedy against anyGrantor or any other Person (including any Guarantor or other guarantor) underthe provisions of the Common Agreement, any other Operative Document orotherwise; or

 

(ii)  to exercise any right or remedy against anyGuarantor or other guarantor of, or collateral securing, any SecuredObligations;

 

(c)                                  anychange in the time, manner or place of payment of, or in any other term of, allor any of the Secured Obligations, or any other extension, compromise orrenewal of any Secured Obligation;

 

(d)                                 anyreduction, limitation, impairment or termination of any Secured Obligations forany reason (other than repayment), including any claim of waiver, release,surrender, alteration or compromise, and shall not be subject to (and eachGrantor hereby waives) any defense or setoff, counterclaim, recoupment ortermination whatsoever by reason of the invalidity, illegality, nongenuineness,irregularity, compromise, unenforceability of, or any other event or occurrenceaffecting, any Secured Obligations;

 

(e)                                  anyamendment to, rescission, waiver, or other modification of, or any consent todeparture from, any of the terms of the Common Agreement or any other OperativeDocument;

 

(f)                                    (i)any addition, exchange, release, surrender or non-perfection of any collateralor (ii) any amendment to or waiver or release or addition of, or consent todeparture from, any guaranty held by the Shared Payment and Collateral Agent orany other Secured Party, securing or supporting any of the Secured Obligations;or

 

(g)                                 anyother circumstance which might otherwise constitute a defense available to, ora legal or equitable discharge of, any surety, any Guarantor or any otherguarantor (other than repayment).

 

2.5                                 *Waiver**, etc*.  Each Grantor hereby waives promptness, diligence, notice ofacceptance and any other notice with respect to any of the Secured Obligationsand this Agreement and any requirement that the Shared Payment and CollateralAgent or any other Secured Party protect, secure, perfect or insure anysecurity interest or Lien, or any Property subject thereto, or exhaust anyright or take any action against any other Person (including any

 

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Guarantor or other guarantor)or entity or any collateral (including any Collateral) securing any SecuredObligations.

 

2.6                                 *Postponement of Subrogation and Contribution*.  Until (x) the Secured Obligations have beenindefeasibly paid in full in cash or (y) the security interest provided forherein has been released in accordance with Section 2.2, each Grantorhereby irrevocably waives any claim, remedy or other right which it may nowhave or hereafter acquire against any other Person that may arise from theexistence, payment, performance or enforcement of such Grantor’s obligationsunder this Agreement or any other Operative Document, including any right ofsubrogation, reimbursement, contribution, exoneration, or indemnification, anyright to participate in any claim or remedy of the Shared Payment andCollateral Agent or any other Secured Party against any other Person or anycollateral which the Shared Payment and Collateral Agent or any other SecuredParty now has or hereafter acquires, whether or not such claim, remedy or rightarises in equity, or under contract, statute or common law, including the rightto take or receive from any other Person, directly or indirectly, in cash orother Property or by set-off or in any manner, payment or security on accountof such claim, remedy or right; provided, that if the security interestis released in accordance with Section 2.2 and without the SecuredObligations having been indefeasibly satisfied in full, then each Grantorhereby irrevocably waives any right of subrogation or equitable assignment of asecurity interest or lien on the Collateral. If any amount shall be paid to any Grantor in violation of the precedingsentence and the Secured Obligations shall not have been indefeasibly paid infull in cash, such amount shall be deemed to have been paid to any such Grantorfor the benefit of, and held in trust for, the Shared Payment and CollateralAgent and each of the other Secured Parties, and shall forthwith be paid to theShared Payment and Collateral Agent for the account of the Shared Payment andCollateral Agent and the other Secured Parties to be credited and applied uponthe Secured Obligations, whether matured or unmatured.  Each Grantor acknowledges that it willreceive direct and indirect benefits from the financing arrangementscontemplated by the Common Agreement and the other Operative Documents and thatthe waiver set forth in this Section 2.6 is knowingly made incontemplation of such benefits.  If (a)the Grantors have made payments to the Shared Payment and Collateral Agent andthe other Secured Parties of all or any part of the Secured Obligations and (b)the Secured Obligations have been indefeasibly paid in full in cash, the SharedPayment and Collateral Agent, upon receipt of a certificate from the Grantorsstating that all conditions to such transfer have been satisfied, and the otherSecured Parties agree to execute and deliver to each Grantor, as applicable,appropriate documents (without recourse and without representation andwarranty) reasonably requested by such Grantors to evidence the transfer bysubrogation to each Grantor, as applicable, of an interest in the SecuredObligations resulting from such payment by such Grantor.

 

2.7                                 *Control Accounts*.  Without limiting any other means ofobtaining perfection of the Shared Payment and Collateral Agent’s securityinterest in any or all of the Account Collateral, each Grantor, the SharedPayment and Collateral Agent and HSBC hereby agree, (i) with respect to anyAccount Collateral now or hereafter provided by any Grantor consisting of adeposit account maintained at HSBC, that HSBC will comply with instructionsoriginated by the Shared Payment and Collateral Agent directing disposition ofthe funds in such deposit account without further consent by any Grantor(including the Grantor for which such deposit account is maintained), and (ii)with respect to any Account Collateral now or hereafter provided by any Grantorconsisting of a securities account as to which HSBC is the securitiesintermediary, that

 

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HSBC will comply withentitlement orders originated by the Shared Payment and Collateral Agent  with respect to any securities entitlementscredited to such securities account without further consent by any Grantor(including the Grantor which is the entitlement holder with respect to suchsecurities account).

 

2.8                                 *Operational Accounts*.  The accounts listed onSchedule 3.27 of the Common Agreement shall be operational accounts within five(5) Business Days after the opening thereof.

** **

**ARTICLE 3**

**FURTHER ASSURANCES; REMEDIES**

 

3.1                                 *Further Assurances**; Remedies*.  Infurtherance of the grant of the pledge and security interest pursuant to Section 2.1, each of the Borrower (with respect to itself and the Grantors) andeach Grantor (with respect to itself) hereby agrees as follows:

 

(a)                                  Delivery and Other Perfection. Borrower and each Grantor shall:

 

(i)                                     in the event any proceeds of Collateral areevidenced by an instrument, promptly deliver and pledge to the Shared Paymentand Collateral Agent such instrument, in each case endorsed and/or accompaniedby such instruments of assignment and transfer in such form and substance asthe Shared Payment and Collateral Agent, at the written direction of theDesignated Creditors, may request;

 

(ii)                                  prior to opening a deposit account or securitiesaccount (as such terms are defined in the UCC) in the United Statesconstituting Shared Collateral, cause any such account to become subject to(and the relevant bank and any other holder of such account to become party to)the applicable Shared Collateral Control Agreement which the Shared Payment andCollateral Agent shall execute at the written direction of the RequiredLenders; provided, that the provisions of this clause (ii) shall notapply with respect to any deposit account or securities account maintained withthe Shared Payment and Collateral Agent;

 

(iii)                               promptly give, execute, deliver, file and/orrecord any financing statement, notice, instrument, agreement or other documentthat may be necessary or desirable to create, preserve, perfect, validate orimprove the security interest granted pursuant hereto or to enable the SharedPayment and Collateral Agent to exercise and enforce its rights hereunder withrespect to such pledge and security interest;

 

(iv)                              keep full and accurate books and recordsrelating to the Collateral, and stamp or otherwise mark such books and recordsin such manner to reflect the security interests granted by this Agreement; and

 

(v)                                 permit representatives of the Shared Payment andCollateral Agent, at the written direction of the Designated Creditors, uponreasonable notice, at any time during normal business hours, to inspect and makecopies of and abstracts from its books and records pertaining to theCollateral, and, if a Default has occurred and is continuing, permitrepresentatives of the Shared Payment and Collateral Agent to be present at anyof

 

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the place(s) of business of any Grantor (or any of its applicableagents) to receive copies of all communications and remittances relating to theCollateral, and, if a Default has occurred and is continuing, forward copies tothe Shared Payment and Collateral Agent of any material notices orcommunications received by (or on behalf of) any Grantor with respect to the Collateral, all in suchmanner as any Secured Party (other than the Yankee Bond Trustee) may reasonablyrequest.

 

(b)           Other Financing Statements andLiens.  Except for Permitted Liens,without the prior written consent of the Shared Payment and Collateral Agent,at the written direction of the Designated Creditors, it shall not file orsuffer to be on file, or authorize or permit to be filed or to be on file, inany jurisdiction, any financing statement, recordation, registration or likedocument with respect to the Collateral in which the Shared Payment andCollateral Agent is not named as the sole secured party for the benefit of theSecured Parties.

 

(c)           Preservation ofRights.  The Shared Payment andCollateral Agent shall not be required to take steps necessary to preserve anyrights against prior parties to any of the Collateral.

 

(d)           SpecifiedDefaults.  While any SpecifiedDefault exists:

 

(i)                                     the Shared Payment and Collateral Agent (onbehalf of the Secured Parties) shall have all of the rights and remedies withrespect to the Collateral of a secured party under the UCC (whether or not theUCC is in effect in the jurisdiction where the rights and remedies areasserted) and all additional rights and remedies to which a secured party isentitled under the Applicable Laws in effect in any jurisdiction where anyrights and remedies hereunder may be asserted, including the right, to themaximum extent permitted by Applicable Law, to exercise all powers of ownershippertaining to the Collateral as if the Shared Payment and Collateral Agent werethe sole and absolute owner thereof (and each Grantor agrees to take all such action as may benecessary or reasonably requested by the Shared Payment and Collateral Agent(at the written direction of the Designated Creditors) to give effect to suchright);

 

(ii)                                  the Shared Payment and Collateral Agent, at thedirection of the Designated Creditors, in its name or in the name of anyGrantor or otherwise, may demand, sue for,collect or receive any money or other Property at any time payable orreceivable on account of or in exchange for any of the Collateral; and

 

(iii)                               the Shared Payment and Collateral Agent may, atthe direction of the Designated Creditors, to the extent permitted byApplicable Law, and upon at least ten (10) Business Days’ prior written noticeto the Grantors of the time and place, sell all or any part of the Collateralor cause such sale through agents or otherwise, at such place(s) as theDesignated Creditors shall direct, and for cash or for credit or for futuredelivery (without thereby assuming any credit risk), at public or private sale,without demand of performance or notice of intention to effect any suchdisposition or of the time or place thereof (except such notice as is requiredabove or by Applicable Law and cannot be waived), and any Person (including theShared Payment and Collateral Agent and any

 

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other Secured Party) may be the purchaser ofany or all of such Collateral at any public sale (or, to the extent permittedby Applicable Law, at any private sale) and thereafter hold the sameabsolutely, free from any claim or right of whatsoever kind, including anyright or equity of redemption (statutory or otherwise), of any Grantor, anysuch demand, notice and right or equity being hereby expressly waived andreleased by the Grantors.  The SharedPayment and Collateral Agent may at the direction of the Designated Creditors,without notice or publication, adjourn any public or private sale or cause thesame to be adjourned from time to time by announcement at the time and placefixed for the sale, and such sale may be made at any time or place to which thesale may be so adjourned.

 

(e)           Deficiency.  If the proceeds of collection or otherrealization of or upon the Collateral are insufficient to cover the costs andexpenses of such realization and the payment in full of the SecuredObligations, then the Grantors shall remain liable for any deficiency.

 

(f)            Books andRecords; UCC Matters.  Without (A)at least 30 days’ prior written notice to the Shared Payment and CollateralAgent and (B) first taking such actions as may be necessary or desirable topreserve or protect the security interests granted hereunder, no Grantor shall:(i) maintain any of its books and records with respect to the Collateral at anyoffice or maintain its principal place of business at any place other thanMexico or the United States, (ii) change its jurisdiction of organization orits form of organization, or (iii) change its name, or the name under which itdoes business, from the name shown on the signature pages hereto.

 

(g)           Private Sale.  It acknowledges (and each Secured Party willbe deemed to have acknowledged) that any private sale by the Shared Payment andCollateral Agent of any of the Collateral may be at prices and on terms lessfavorable than those obtainable through a public sale and agrees (or will bedeemed to have agreed) that any such private sale pursuant to clause(d)(iii) of this Section 3.1 made in accordance with Applicable Lawshall be deemed to have been made in a commercially reasonable manner and thatthe Shared Payment and Collateral Agent shall have no obligation to engage inpublic sales unless required by any Applicable Law.  Neither the Shared Payment and Collateral Agent nor any of theother Secured Parties shall incur any liability as a result of the sale of theCollateral, or any part thereof, at any private sale conducted in acommercially reasonable manner and made in accordance with Applicable Law.  Each Grantor hereby waives (and each SecuredParty will be deemed to have waived) any claims against the Shared Payment andCollateral Agent or any other Secured Party arising by reason of the fact thatthe price at which the Collateral may have been sold at such a private salemade in accordance with Applicable Law was less than the price that might havebeen obtained at a public sale or was less than the aggregate amount of theSecured Obligations, even if the Shared Payment and Collateral Agent (at thewritten direction of the Designated Creditors) accepts the first offer receivedand does not offer such sold Collateral to more than one offeree.

 

(h)           Clean Sale.  Upon any sale of Collateral under thisSection made in accordance with Applicable Law, the Shared Payment andCollateral Agent shall have the right (at the written direction of theDesignated Creditors) to deliver, assign and transfer to the purchaser thereofthe Collateral so sold.  Each purchaserat any such sale shall hold the Collateral so sold to

 

9

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it absolutely and free from anyLien, claim or right of any kind, and each Grantor, to the extent permitted byApplicable Law, hereby specifically waives all rights of redemption, stay orappraisal that it has or may have under any Applicable Law with respectthereto.  Each Grantor shall execute anddeliver such documents and take such other actions as may be necessary oradvisable from time to time in order that any such sale may be made incompliance with Applicable Law.

 

(i)            Application ofProceeds.  Notwithstanding anythingherein to the contrary, the proceeds of any collection, sale or otherrealization of all or any part of the Collateral pursuant to this Section, andany other cash at the time held by the Shared Payment and Collateral Agentunder this Article, shall be applied by the Shared Payment and Collateral Agentas set forth in Section 8.02(f) of the Common Agreement.

 

As used in this Agreement, “*proceeds*” of Collateral shall have the meaning ascribedthereto in Article 9 of the UCC, and shall include any proceeds thereof,including cash, securities and other Property realized in respect of, anddistributions in kind of, Collateral (including any thereof received under anyreorganization, liquidation or adjustment of debt of any Grantor or any issuerof or obligor on any of the Collateral).

 

(j)            Attorney-in-Fact.  Without limiting any rights or powersgranted by this Agreement to the Shared Payment and Collateral Agent while noSpecified Default exists, during the existence of any Specified Default theShared Payment and Collateral Agent is hereby appointed the attorney-in-fact ofeach Grantor for the purpose of carrying out the provisions of this Article andtaking any action and executing any documents that the Shared Payment andCollateral Agent (at the written direction of the Designated Creditors) maydeem necessary or advisable to accomplish the purposes hereof, whichappointment as attorney-in-fact is irrevocable and coupled with aninterest.  Without limiting thegenerality of the foregoing, so long as the Shared Payment and Collateral Agentshall be entitled under this Article to make collections in respect of theCollateral, the Shared Payment and Collateral Agent shall have the right andpower to receive, endorse and collect all checks and other instruments madepayable to the order of any Grantor representing any payment or otherdistribution in respect of the Collateral or any part thereof and to give fulldischarge for the same.

 

(k)           Termination.  When (x) all of the Secured Obligations havebeen indefeasibly satisfied in full in cash (other than any indemnificationobligations not yet incurred) or (y) the security interest provided for hereinhas been released in accordance with Section 2.2, this Agreement shallterminate and the Shared Payment and Collateral Agent shall (at the written requestand sole cost and expense of the Grantors), upon receipt of a certificate fromthe Grantors stating that the conditions for such release have beensatisfied:  (i) cause to be assigned,transferred and delivered, against receipt but without any recourse, warrantyor representation whatsoever, any remaining Collateral and money received inrespect thereof to or on the order of any Grantor, (ii) deliver to any Grantorany Property of such Grantor in the possession of the Shared Payment andCollateral Agent and (iii) execute lien releases and UCC termination statementsas requested by the Grantors.

 

10

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(l)            Further Assurances.  Sections 4.16(a) and 4.16(c)of the Common Agreement shall be deemed to be incorporated herein as if thesame were set out in full herein.

 

(m)          Enforcement of Liens.  Notwithstanding anything in any OperativeDocument to the contrary, the Shared Payment and Collateral Agent shall not, onbehalf of any Secured Party, and no Secured Party shall prior to thetermination of this Agreement, assert or attempt to enforce or avail itself ofany Liens or any other pre-judgment or post-judgment liens or assert any rightsin or claims against the Collateral or otherwise foreclose or realize upon theCollateral or any part thereof, without (i) providing the other Secured Partiesat least ten (10) days prior written notice thereof and (ii) the prior writtenconsent of the Designated Creditors, it being understood that in no event shallany Secured Party other than the Shared Payment and Collateral Agent have anyrights or remedies as a secured party under this Agreement, such rights andremedies being exercisable solely by the Shared Payment and Collateral Agentfor the benefit of itself and the other Secured Parties; provided, thatthis Section 3.1(m) does not affect the right of set-off set forth in Section4.20 of the Common Agreement.

 

**ARTICLE 4**

**REPRESENTATIONS AND WARRANTIES**

 

4.1           *Representationsand Warranties*. Without limiting the effect of the representations and warranties setforth in the Common Agreement, which are hereby incorporated by reference, theBorrower (with respect to itself and the Grantors) and each Grantor (withrespect to itself) jointly and severally represents and warrants to the SecuredParties that:

 

(a)           Ownership and Liens.  Each Grantor is (or shall be) the solebeneficial owner of the Collateral in which it grants a security interestpursuant to Section 2.1 and no Lien exists or will exist upon theCollateral at any time, except for Permitted Liens, including the pledge andsecurity interest created or provided for herein, which pledge and securityinterest will constitute a first priority perfected pledge and securityinterest in and to all of the Collateral upon (i) the filing by the applicableGrantor of a UCC financing statement (x) with respect to each Grantor (exceptfor MMI), in the Office of the Recorder of Deeds of the District of Columbia,and (y) with respect to MMI, in the Office of the Secretary of State of theState of New York, each in favor of the Shared Payment and Collateral Agent,and (ii) in the case of any deposit account or securities account (as suchterms are defined in the UCC) maintained with a Financial Institution otherthan the Shared Payment and Collateral Agent, the execution of the applicableShared Collateral Control Agreement by each of the Grantors, the Shared Paymentand Collateral Agent and such Financial Institution.

 

(b)           Other Financing Statements.  Other than in connection with the securityinterest granted herein, there is no notice of assignment, financing statement(or similar statement or instrument of registration under the Applicable Law ofany jurisdiction) executed or registered by any Grantor or, to its knowledge,by any other Person with respect to any interest of any kind in any of theCollateral.

 

(c)           Names, OrganizationalIdentification Number and Chief Executive Office.  Each Grantor’s name as it appears in official filings in thejurisdiction of its incorporation or other

 

11

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organizationand the type of entity of Grantor (including corporation, partnership, limitedpartnership, limited liability company, *sociedad anónima de capital variable*, and *sociedadanónima*) is fully and correctly set forth in the preamble hereto,and, with respect to MMI, its organizational identification number issued bythe State of New York is 872558.  Thechief executive office of each Grantor is correctly set forth on Schedule4.1(c) hereto.

 

**ARTICLE 5**

**THE SHARED PAYMENT AND COLLATERAL AGENT**

 

5.1                                 *Shared Payment and Collateral Agent AppointedAttorney-in-Fact**.* Each Grantor hereby irrevocably appoints the Shared Payment andCollateral Agent the attorney-in-fact of such Grantor, with full authority inthe place and stead of such Grantor and in the name of such Grantor orotherwise, from time to time at the written direction of the DesignatedCreditors, following the occurrence and continuation of a Specified Default, totake any action and to execute any instrument which may be necessary oradvisable to accomplish the purposes of this Agreement, including:

 

(a)                                  toask, demand, collect, sue for, recover, compromise, receive and giveacquittance and receipts for moneys due and to become due under or in respectof any of the Collateral;

 

(b)                                 toreceive, endorse, and collect any drafts or other instruments, documents andchattel paper, in connection with clause (a) of this Section 5.1;

 

(c)                                  tofile any claims or take any action or institute any proceedings which may benecessary or desirable for the collection of any of the Collateral or otherwiseto enforce the rights of the Shared Payment and Collateral Agent with respectto any of the Collateral; and

 

(d)                                 toperform the affirmative obligations of such Grantor hereunder (including allobligations pursuant to Section 3.1); provided, that in no eventshall the Shared Payment and Collateral Agent be required to expend or risk itsown funds pursuant to this Section.

 

Each Grantor hereby acknowledges, consents and agreesthat the power of attorney granted pursuant to this Section is irrevocable andcoupled with an interest.

 

5.2                                 *Shared Payment and Collateral Agent May Perform*.  If any Grantor fails to perform anyagreement contained herein, the Shared Payment and Collateral Agent, at thewritten direction of the Designated Creditors, may itself perform, or causeperformance of, such agreement, and the expenses of the Shared Payment andCollateral Agent incurred in connection therewith shall be payable pursuant to Section6.4provided, that in no event shall the Shared Payment andCollateral Agent be required to expend or risk its own funds pursuant to thisSection.

 

5.3                                 *Shared Payment and Collateral Agent Has No Duty*.  The powers conferred on the Shared Paymentand Collateral Agent hereunder are solely to protect its interest (on behalf ofthe

 

12

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Secured Parties) in theCollateral and shall not impose any duty on it to exercise any such powersexcept at the written direction of the Designated Creditors.

 

5.4                                 *Reasonable Care*.  The Shared Payment and Collateral Agentshall exercise reasonable care in the custody and preservation of any of theCollateral in its possession.

 

**ARTICLE 6**

**MISCELLANEOUS**

 

6.1           *Authorization to file Financing Statements*.  Each Grantor hereby authorizes the filing ofany financing statements or continuation statements, amendments to financingstatements or any similar document in any jurisdiction with any filing officesas the Shared Payment and Collateral Agent, at the written direction of theDesignated Creditors, may determine are necessary or advisable to perfect thesecurity interests granted to the Shared Payment and Collateral Agentherein.  Such financing statements maycontain an indication or description of collateral that describes theCollateral in any manner as is necessary, advisable or prudent to ensure theperfection of the security interest in the Collateral granted to the SharedPayment and Collateral Agent herein. Each Grantor shall furnish to the Shared Payment and Collateral Agentfrom time to time statements and schedules further identifying and describingthe Collateral and such other reports in connection with the Collateral as theShared Payment and Collateral Agent, at the written direction of the DesignatedCreditors,  may reasonably request, allin reasonable detail.

 

6.2                                 *Limitation of Rights**; No Waiver*.  Section14.03 of the Common Agreement shall be deemed to be incorporated herein asif the same were set out in full herein.

 

6.3                                 *Notices*.  Exceptas otherwise provided in this Agreement, all notices, requests, instructions orother documents to be given hereunder will be in accordance with the terms andprovisions of Section 14.14 of the Common Agreement.

 

6.4                                 *Expenses; Indemnity*.  Sections11.01 and 11.02 of the Common Agreement shall be deemed to beincorporated herein as if the same were set out in full herein.

 

6.5                                 *Amendments**, etc*.  The terms of this Agreement may bewaived, altered or amended only by an instrument in writing duly executed bythe Shared Payment and Collateral Agent (at the written direction of theDesignated Creditors); provided, that no modification, alteration orwaiver shall, unless by an instrument signed by all of the Lenders or unlesspermitted by the Common Agreement: (i) release all or any material portion ofthe Collateral (except as expressly otherwise provided herein) or share anyCollateral exclusively for the benefit of the Secured Parties, (ii) modify inany manner the number or percentage of the Lenders required to make anydeterminations or waive any rights hereunder or to modify any provision hereofor (iii) alter the terms of this Section.

 

6.6                                 *Successors and Assigns*.  ThisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective successors and permitted assigns, except that no Grantorshall assign or transfer any of its rights or obligations hereunder without theprior written consent of the Super-Majority Lenders (any attempt to do so beingnull and void *ab initio*).

 

13

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6.7                                 *Additional Grantors*.  Borrowershall designate any Subsidiary or newly acquired or formed Subsidiary as aGrantor hereunder (each such Subsidiary, a “**New Grantor**”) in accordancewith and to the extent required by Section 4.19 of the Common Agreement.  Such New Grantor shall become a Grantor under this Agreement, and for allpurposes deemed a Grantor under this Agreement, with all rights and obligationsof a Grantor under this Agreement, upon the execution by such Person of aJoinder Agreement, countersigned by the Shared Payment and Collateral Agent.

 

6.8                                 *Third Party Beneficiaries*.  ThisAgreement is made and entered into for the sole protection and legal benefit ofthe parties hereto, the Secured Parties and their permitted successors andassigns (all of which, if not parties hereto, are third-party beneficiarieshereof for purposes of enforcing their respective rights hereunder), and noother Person shall be a direct or indirect legal beneficiary of, or have anydirect or indirect cause of action or claim in connection with, this Agreement.

 

6.9                                 *Survival*.  The obligations of the Grantors under Section 6.4 shall survive the repayment of the Secured Obligations.

 

6.10                           *Captions*.  The captions and sectionheadings appearing herein are included solely for convenience of reference andare not intended to affect the interpretation of any provision of thisAgreement.

 

6.11                           *Counterparts*.  ThisAgreement may be executed in any number of counterparts, all of which takentogether shall constitute one and the same instrument and any of the partieshereto may execute this Agreement by signing any such counterpart.

 

6.12                           *Governing Law*.  **THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OFNEW YORK (NOT INCLUDING SUCH STATE’S CONFLICT OF LAWS PROVISIONS OTHER THANSECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) , EXCEPT TO THE EXTENTTHAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIESHEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OFA JURISDICTION OTHER THAN THE STATE OF NEW YORK; PROVIDED, THAT THESECURED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER UNITED STATES FEDERALLAW; AND PROVIDEDFURTHER, THAT THE RIGHTS, DUTIES ANDOBLIGATIONS OF THE SHARED PAYMENT AND COLLATERAL AGENT SHALL BE GOVERNED BY THELAW OF THE STATE OF NEW YORK.  THISAGREEMENT, THE OTHER OPERATIVE DOCUMENTS, THE SHARED COLLATERAL CONTROL AGREEMENT(S)AND THE JOINDER AGREEMENTS, IF ANY, CONSTITUTE THE ENTIRE UNDERSTANDING AMONGTHE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF ANDSUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.**

 

6.13                           *Consent to Jurisdiction**; ProcessAgent*.  Section 14.22 of the Common Agreementshall be deemed to be incorporated herein as if the same were set out in fullherein.

 

14

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6.14         *Waiver of JuryTrial*.  **Section 14.20 of the Common Agreement shallbe deemed to be incorporated herein as if the same were set out in full herein.**

 

6.15                           *Severability*.  Section14.05 of the Common Agreement shall be deemed to be incorporated herein asif the same were set out in full herein**.**

 

6.16                           *Currency*.  Section14.06 of the Common Agreement shall be deemed to be incorporated herein asif the same were set out in full herein**.**

 

[REMAINDER OF PAGE LEFTINTENTIONALLY BLANK]

 

15

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*** ***

***IN WITNESSWHEREOF***,the parties hereto have caused this Agreement to be duly executed and deliveredas of the day and year first above written.

 

 
|   | GRUPO MINERO MEXICO, S.A. DE C.V.           |
|--------|---------------------------------------------|
|   |                                        |
|   |                                        |
|   | By:                                         | /s/ Daniel Tellechea Salido |   |
|   |                                        | Name:  Daniel Tellechea Salido |
|   |                                        | Title:  Attorney-in-fact |
|   |                                        |
|   | By:                                         | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                        | Name:  J. Eduardo Gonzalez  Felix |
|   |                                        | Title:  Attorney-in-fact |
|   |                                        |
|   | MINERA MEXICO, S.A. DE C.V.            |
|   |                                        |
|   | By:                                         | /s/ Daniel Tellechea Salido |   |
|   |                                        | Name:  Daniel Tellechea Salido |
|   |                                        | Title:  Attorney-in-fact |
|   |                                        |   |
|   | By:                                         | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                        | Name:  J. Eduardo Gonzalez  Felix |
|   |                                        | Title:  Attorney-in-fact |
|   |                                        |
|   |                                        |
|   | INDUSTRIAL MINERA MEXICO, S.A. DE C.V. |
|   |                                        |
|   | By:                                         | /s/ Daniel Tellechea Salido |   |
|   |                                        | Name:  Daniel Tellechea Salido |
|   |                                        | Title:  Attorney-in-fact |
|   |                                        |
|   | By:                                         | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                        | Name:  J. Eduardo Gonzalez  Felix |
|   |                                        | Title:  Attorney-in-fact |
|        |                                             |  |  |  |  |  |  |  |  |

 

S-1

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|   | MINERA MEXICO INTERNACIONAL, INC.        |
|--------|------------------------------------------|
|   |                                     |
|   | By:                                      | /s/ Daniel Tellechea Salido |   |
|   |                                     | Name:  Daniel Tellechea Salido |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | By:                                      | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                     | Name:  J. Eduardo Gonzalez  Felix |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | MEXICANA DE COBRE, S.A. DE C.V.     |
|   |                                     |
|   | By:                                      | /s/ Daniel Tellechea Salido |   |
|   |                                     | Name:  Daniel Tellechea Salido |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | By:                                      | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                     | Name:  J. Eduardo Gonzalez  Felix |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | MINERALES METALICOS DEL NORTE, S.A. |
|   |                                     |
|   | By:                                      | /s/ Daniel Tellechea Salido |   |
|   |                                     | Name:  Daniel Tellechea Salido |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | By:                                      | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                     | Name:  J. Eduardo Gonzalez  Felix |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   |                                     |
|   | MEXICANA DE CANANEA, S.A. DE C.V.   |
|   |                                     |
|   | By:                                      | /s/ Daniel Tellechea Salido |   |
|   |                                     | Name:  Daniel Tellechea Salido |
|   |                                     | Title:  Attorney-in-fact |
|   |                                     |
|   | By:                                      | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                     | Name:  J. Eduardo Gonzalez  Felix |
|   |                                     | Title:  Attorney-in-fact |
|        |                                          |  |  |  |  |  |  |  |

 

S-2

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|   | MEXICANA DEL ARCO, S.A. DE C.V.                                           |
|--------|---------------------------------------------------------------------------|
|   |                                                                      |
|   | By:                                                                       | /s/ Daniel Tellechea Salido |   |
|   |                                                                      | Name:  Daniel Tellechea Salido |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   | By:                                                                       | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                                                      | Name:  J. Eduardo Gonzalez  Felix |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   |                                                                      |
|   | MINERALES Y MINAS MEXICANAS, S.A. DE C.V.                                 |
|   |                                                                      |
|   | By:                                                                       | /s/ Daniel Tellechea Salido |   |
|   |                                                                      | Name:  Daniel Tellechea Salido |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   | By:                                                                       | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                                                      | Name:  J. Eduardo Gonzalez  Felix |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   |                                                                      |
|   | COMPANIA DE TERRENOS E INVERSIONES  DE SAN LUIS POTOSI, S.C. POR A., S.A. |
|   |                                                                      |
|   | By:                                                                       | /s/ Daniel Tellechea Salido |   |
|   |                                                                      | Name:  Daniel Tellechea Salido |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   | By:                                                                       | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                                                      | Name:  J. Eduardo Gonzalez  Felix |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   |                                                                      |
|   | MEXICO COMPANIA INMOBILIARIA, S.A.                                        |
|   |                                                                      |
|   | By:                                                                       | /s/ Daniel Tellechea Salido |   |
|   |                                                                      | Name:  Daniel Tellechea Salido |
|   |                                                                      | Title:  Attorney-in-fact |
|   |                                                                      |
|   | By:                                                                       | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                                                      | Name:  J. Eduardo Gonzalez  Felix |
|   |                                                                      | Title:  Attorney-in-fact |
|        |                                                                           |  |  |  |  |  |

 

S-3

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|   | PROYECCIONES URBANISTICAS, S. DE R.L.  DE C.V. |
|--------|------------------------------------------------|
|   |                                           |
|   | By:                                            | /s/ Daniel Tellechea Salido |   |
|   |                                           | Name:  Daniel Tellechea Salido |
|   |                                           | Title:  Attorney-in-fact |
|   |                                           |
|   | By:                                            | /s/ J. Eduardo Gonzalez Felix |   |
|   |                                           | Name:  J. Eduardo Gonzalez  Felix |
|   |                                           | Title:  Attorney-in-fact |
|        |                                                |  |  |  |  |

 

S-4

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|   |                                                                                 |
|--------|--------------------------------------------------------------------------------------|
|   | HSBC BANK USA, acting in its individual capacity  solely for purposes of Section 2.7 |
|   |                                                                                 |
|   |                                                                                 |
|   | By:                                                                                  | /s/ Harriet Drandoff |   |
|   |                                                                                 | Name:  Harriet Drandoff |
|   |                                                                                 | Title:  Vice President |
|   |                                                                                 |
|   | By:                                                                                  | /s/  Frank J. Godino |   |
|   |                                                                                 | Name:  Frank J. Godino |
|   |                                                                                 | Title:  Vice President |
|        |                                                                                      |  |  |  |

 

S-5

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| ACKNOWLEDGED AND AGREED:                                   |   |
|------------------------------------------------------------|--------|
|                                                       |   |
| HSBC BANK USA,  as the Shared Payment and Collateral Agent |   |
|                                                       |   |
|                                                       |   |
| By:                                                        |   |   |   |
| Name:                                                      |   |   |   |
| Title:                                                     |   |   |   |
|                                                            |        |  |  |  |  |

 

S-6

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**Exhibit A**

 

**To the U.S. Security Agreement**

 

**Form of Joinder Agreement**

 

**JOINDER AGREEMENT**

 

This **JOINDER AGREEMENT** (this “**Agreement**”), dated as of                 ,       , is hereby executed and delivered by                  ,a                    [corporation] (the “**New Grantor***”*), pursuant to the U.S.Security Agreement described below. Unless otherwise defined herein,capitalized terms used herein and defined in the U.S. Security Agreement, datedas of April 29, 2003 (as amended or otherwise modified from time to time, the “**U.S.Security Agreement**”), among each of GRUPO MINERO MEXICO, S.A.DE C.V., MINERA MEXICO, S.A. DE C.V.,****INDUSTRIAL MINERA MEXICO, S.A.DE C.V., MINERA MEXICO INTERNACIONAL, INC., MEXICANA DE COBRE, S.A.DE C.V., MINERALES METALICOS DEL NORTE, S.A., MEXICANA DE CANANEA,S.A. DE C.V., MEXICANA DEL ARCO, S.A. DE C.V., MINERALES Y MINASMEXICANAS, S.A. DE C.V., COMPANIA DE TERRENOS E INVERSIONES DE SAN LUIS POTOSÍ,S.C. POR A.S.A., MEXICO COMPAÑIA INMOBILIARIA, S.A., and PROYECCIONESURBANISTICAS, S. DE R.L. DE C.V. (collectively, the “**Grantors**”), and HSBC BankUSA,****asShared Payment and Collateral Agent, and the Common Agreement (as defined inthe U.S. Security Agreement) are used herein as therein defined and the rulesof interpretation set forth in Section 1.2 of the U.S. SecurityAgreement shall apply hereto.

 

***WHEREAS***,pursuant to Section 6.7 of the U.S. Security Agreement, New Grantor mustenter into this Agreement in order to become a party to the U.S. SecurityAgreement; and

 

***WHEREAS***,the New Grantor desires to execute and deliver this Agreement in order tobecome a party to the U.S. Security Agreement.

 

***NOW,THEREFORE, IT IS AGREED*** as follows:

 

SECTION 1.  *Joinder*.By executing and delivering this Agreement, New Grantor hereby becomes a partyto the U.S. Security Agreement and hereby expressly assumes and agrees toperform all obligations and liabilities of a Grantor thereunder, with the sameeffect as if the U.S. Security Agreement had been executed and deliveredinitially by the New Grantor as a Grantor.

 

SECTION 2.  *Representationsand Warranties*.  The NewGrantor hereby represents and warrants to the Secured Parties that:

 

(a)           Ownership andLiens.  New Grantor is (or shall be)the sole beneficial owner of the Collateral in which it grants a securityinterest pursuant to Section 2.1 of the U.S. Security Agreement and noLien exists or will exist upon the Collateral at any time, except for PermittedLiens, including the pledge and security interest created or provided for inthe U.S. Security Agreement, which pledge and security interest will constitutea first priority perfected pledge and

 

A-1

----

 

securityinterest in and to all of the Collateral upon (i) the filing of a UCC financingstatement with respect to New Grantor [in the Office of the Recorder of Deedsof the District of Columbia] [in the Office of the Department of State of theState of[            ]] infavor of the Shared Payment and Collateral Agent, and (ii) in the case of anydeposit account or securities account (as such terms are defined in the UCC)maintained by New Grantor with a Financial Institution other than the SharedPayment and Collateral Agent, the execution of a Shared Collateral ControlAgreement by New Grantor, the Shared Payment and Collateral Agent and suchFinancial Institution.

 

(b)                                 Accounts.  As of the date hereof, New Grantor does notmaintain any deposit account or securities account (as such terms are definedin the UCC) in the United States, other than those deposit accounts listed in Schedule1.

 

(c)                                  OtherFinancing Statements.  Other than inconnection with the security interest granted in the U.S. Security Agreement, there is no notice of assignment, financing statement (orsimilar statement or instrument of registration under the Applicable Law of anyjurisdiction) executed or registered by NewGrantor or, to its knowledge, by any other Person with respect to anyinterest of any kind in any of the Collateral.

 

(d)           Names,Organizational Identification Number and Chief Executive Office.  New Grantor’s name as it appears in officialfilings in the jurisdiction of its incorporation or other organization and thetype of entity of New Grantor (including corporation, partnership, limitedpartnership, limited liability company, sociedad anónima de capital variable, andsociedad anónima) are fully and correctly set forth in the preamble hereto,[and, with respect to New Grantor, its organizational identification numberissued by the State of[                 ]is[                              ]].  The chief executive office of New Grantor iscorrectly set forth on a supplement to Schedule 4.1(c) to the U.S.Security Agreement.

 

SECTION 3. *Counterparts*. This Agreement may besigned in any number of counterparts, each of which shall be an original, withthe same effect as if the signatures were upon the same agreement.

 

SECTION 4. *Governing Law*. THIS AGREEMENT SHALL BEGOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF NEW YORK (NOTINCLUDING SUCH STATE’S CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OFTHE NEW YORK GENERAL OBLIGATIONS LAW).

 

A-2

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***INWITNESS WHEREOF***, the undersigned has caused thisAgreement to be duly executed and delivered as of the date first above written.

 
|                                                        | [NEW GRANTOR] |
|-------------------------------------------------------------|---------------|
|                                                        |          |
|                                                        |          |
| Address:                                                    |          |   | By: |   |   |
|                                                        |          | Name: |
|                                                        |          | Title: |
|                                                        |          |
| ACKNOWLEDGED:                                               |          |
|                                                        |          |
| HSBC BANK  USA,  as the Shared Payment and Collateral Agent |          |
|                                                        |          |
|                                                        |          |
| By:                                                         |          |   |   |
|                                                        | Name:         |   |
|                                                        | Title:        |   |
|                                                             |               |  |  |  |  |  |  |  |  |

 

A-3

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Schedule 1

 

to the Form ofJoinder Agreement

 

[List of Accounts]

 

A-4

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**ExhibitsB-1 and B-2**

 

**To the U.S. Security Agreement**

 

**Forms of Shared Account Control Agreements**

 

B-1

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**SCHEDULE4.1(c)**

 

**To the U.S. Security Agreement**

 

**Chief Executive Offices**

 
| **GRANTOR**                                                                              |   | **DOMICILE**                                                          |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
|                                                                                     |   |                                                                  |
| Grupo Minero  México, S.A. de C.V.                                                  |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Minera  México, S.A. de C.V.                                                        |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Industrial  Minera México, S.A. de C.V.                                             |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Minera  México Internacional, Inc.                                                  |   | 2575 East Cammelback Road suite 500 85016,  Phoenix, AZ               |
|                                                                                     |   |                                                                  |
| Mexicana de  Cobre, S.A. de C.V.                                                         |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Minerales  Metálicos del Norte, S.A.                                                |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Mexicana de  Cananea, S.A. de C.V.                                                       |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Mexicana del  Arco, S.A. de C.V.                                                         |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Minerales y  Minas Mexicanas, S.A. de C.V.                                               |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Compañía de  Terrenos e Inversiones de San Luis Potosí, S.C. por A., S.A. |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| México  Compañía Inmobiliaria, S.A.                                       |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |
|                                                                                     |   |                                                                  |
| Proyecciones  Urbanísticas, S. de R.L. de C.V.                                      |   | Baja California 200, colonia Roma Sur, C.P.  06760, México, D.F. |

 

4.1(c)-1

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