Exhibit 10.62
                                 LOAN AGREEMENT

                 BANCOMER, S.A., MULTIPLE BANKING INSTITUTION,
                            BANCOMER FINANCIAL GROUP

                                   (BANCOMER)

                             MK GAIN, S.A. DE C.V.

                                   (BORROWER)

                               U.S.$3,500,000.00





                                 Translated by
                       Latin American Trade Finance, Ltd.
<PAGE>

                                TABLE OF CONTENTS


RECITALS    1
I.          Borrower's Recitals                                     2
II.         Bancomer's Recitals

SECTIONS    3

Section 1.  Certain Definitions                                     3
            -------------------
A.          "Additional Income"                                     3
B.          "Agreement"                                             3
C.          "Bancomer CDs"                                          3
D.          "Bancomer CDs Rate"                                     3
E.          "Business Day"                                          3
F.          "CIBC"                                                  4
G.          "Comfort Letter"                                        4
H.          "Consolidation Date"                                    4
I.          "Construction and Refurbishing Program"                 4
J.          "Cost of Funds"                                         4
K.          "Default Rate"                                          4
L.          "Debts"                                                 4
M.          "Disbursement Date"                                     4
N.          "Disbursement Period"                                   5
O.          "Dollars" and "U.S.$"                                   5
P.          "Event of Default"                                      5
Q.          "Exhibit"                                               5
R.          "Eximbank Loan Agreement"                               5
S.          "Ferrocarriles"                                         5
T.          "Ferrocarriles Agreement"                               5
U.          "Financial Ratios"                                      5
V.          "Financial Supervisor"                                  5
W.          "Funding Rate"                                          5
X.          "Interest Payment Dates"                                5
Y.          "Interest Period"                                       6
Z.          "Interest Rate"                                         6
AA.         "Libor"                                                 6
BB.         "Line of Credit"                                        6
CC.         "Loan"                                                  6
DD.         "Loan Disbursements"                                    6
EE.         "Loan Repayment Dates"                                  7
FF.         "Maintenance Agreement"                                 7
GG.         "MK Rail"                                               7
HH.         "MK Rail Debt"                                          7
II.         "PCGA"                                                  7
JJ.         "Pesos"                                                 7
KK.         "Promissory Notes"                                      7
LL.         "Regulatory Change                                      7
MM.         "Reserve Fund"                                          8
NN.         "Rights for Collection"                                 8
OO.         "Spread"                                                8
PP.         "Subordination Agreement"                               8
QQ.         "Taxes"                                                 8
RR.         "Technical Assistance Agreement"                        8
SS.         "Technical Committee"                                   8
TT.         "Technical Supervisor"                                  8
UU.         "Technical Supervisor's Certificate"                    8
VV.         "Trust"                                                 8

Section 2.  Amount of the Loan                                      9
            ------------------

Section 3.  Use of Proceeds                                         8

Section 4.  Disbursement Period                                     9

Section 5.  Loan Disbursement                                       9

Section 6.  Promissory Notes                                        10

Section 7.  Conditions Precedent for the First Loan Disbursement    10
            ----------------------------------------------------

Section 8.  Conditions Precedent for Subsequent Loan Disbursements  12
            ------------------------------------------------------

Section 9.  Payments of Principal                                   13

Section 10.  Prepayment                                             13

Section 11.  Interest                                               14

Section 12.  Commissions                                            15

Section 13.  Alternate Interest Rate                                15

Section 14.  Increased Costs and Funding Losses                     17
             ----------------------------------

Section 15.  Taxes                                                  18

Section 16.  Place and Form of Payment                              18
             ----------------- -------

Section 17.  Representations & Warranties                           19

Section 18.  Covenants of the Borrower                              20
             -------------------------

Section 19.  Insurance                                              24

Section 20.  Events of Default                                      25

Section 21.  Trust Guaranty                                         29

Section 22.  Monetary Conversion                                    29

Section 23.  Restriction                                            30

Section 24.  Successors and Assigns                                 30

Section 25.   No Waiver                                             30

Section 26.  Amendments                                             30

Section 27.  Notices                                                31

Section 28.  Governing Law                                          32

Section 29.  Jurisdiction                                           32

Section 30.  Costs and Expenses                                     32

Section 31.  Condition Precedent for Validity of this Agreement     33
             --------------------------------------------------    


EXHIBIT "A"          FERROCARRILES' AGREEMENT
EXHIBIT "B"          COMFORT LETTER
EXHIBIT "C"          FORM OF TECHNICAL SUPERVISOR'S CERTIFICATE
EXHIBIT "D"          SUBORDINATION AGREEMENT
EXHIBIT "E"          TRUST
EXHIBIT "F"          FINANCIAL RATIOS
EXHIBIT "G"          FORM OF PROMISSORY NOTE
EXHIBIT "H"          CONSTRUCTION AND REFURBISHING PROGRAM EXHIBIT "I"
AMOUNT OF AMORTIZATION INSTALLMENTS
EXHIBIT "J"          AMENDMENT TO THE FNM MAINTENANCE AGREEMENT


<PAGE>















========================================================================



                                 LOAN AGREEMENT



                  BANCOMER, S.A., MULTIPLE BANKING INSTITUTION,
                            BANCOMER FINANCIAL GROUP

                                   (BANCOMER)


                              MK GAIN, S.A. DE C.V.

                                   (BORROWER)


                                U.S.$3,500,000.00



========================================================================







                                  Translated by
                       Latin American Trade Finance, Ltd.


<PAGE>









                                 Bancomer, S.A.
                              MK GAIN, S.A. de C.V.
                           US$3,500,000 Loan Agreement



                                 LOAN AGREEMENT


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



         Loan Agreement, dated as of December 13, 1996, by and among:

         (i) Bancomer,  S. A., Multiple Banking Institution,  Bancomer Financial
Group, a credit institution  organized and existing under the laws of the United
Mexican States (hereinafter referred to as "Bancomer"); and

         (ii) MK Gain,  S. A. de C. V., a  corporation  organized  and  existing
under the laws of the United  Mexican  States  (hereinafter  referred  to as the
"Borrower").


                                    RECITALS


I.       Borrower's Recitals.  Borrower states that:

         a) It is a corporation  organized  under the laws of the United Mexican
States with full  capacity  under its by-laws to execute this  Agreement  and to
undertake its obligations as established hereunder,  as evidenced by Public Deed
No. 23 granted on January 26, 1994, before Mr. Jose Luis Cardenas Davila, Notary
Public  No.  12 in and for  Sabinas,  Coahuila,  whose  first  public  deed  was
inscribed in the Public Property Registry of Sabinas,  State of Coahuila,  under
number 1,771, 10th volume, 3rd book,  commercial  section,  on January 27, 1994,
and the Public  Deed No.  22,796  granted on July 5, 1995  before Mr.  Carlos A.
Duran Loera,  Public Notary No. 11 of the Federal  District,  whose first public
deed was  inscribed in the Public  Registry of Commerce of Mexico City,  D.F. on
page number 20,849 dated June 24, 1996.

         b) Its  representatives are duly empowered and have full legal capacity
to  execute   this   Agreement  on  its  behalf  and   representation,   without
modification,  restriction  or revocation as of the date of this  Agreement,  as
evidenced by a copy, certified by the Secretary of the Board of Directors of the
Borrower, of the minutes dated December 11, 1996, of the resolution taken by the
Board of Directors of the Borrower to grant the necessary  powers of attorney to
enter into this amending agreement.

         c) That on July 6, 1995 it entered into a Loan  Agreement with Bancomer
for up to  US$30,000,000  (Thirty Million  Dollars United States  Currency) with
funds guaranteed by the  Export-Import  Bank of the United States (the "Eximbank
Loan Agreement").

         d) Has incorporated the Trust (as such term is hereinafter  defined) to
guarantee  its  obligations  hereunder and under this Loan and the Eximbank Loan
Agreement.

         e) It has requested  from  Bancomer the granting of an additional  loan
for the financing of  improvements to the  Ferrocarriles  shops (as such term is
hereinafter defined) in accordance with the Maintenance  Agreement (as such term
is hereinafter defined).


         II.      Bancomer's Recitals.  Bancomer states that:

         a) It is a credit institution duly organized and validly existing under
the laws of the United  Mexican  States and is fully  empowered  to execute this
Agreement,  as  evidenced  by Public Deed No.  8525  granted on October 8, 1945,
before Mr. Tomas  O'Gorman,  Notary  Public No. 1 of the Federal  District  with
first testimony  written under Folio No. 53, Page 310, Volume 207, Book 3 of the
Public Registry of Commerce, Federal District.

         b) That  its  representative  has the  sufficient  legal  capacity  and
authorization  to enter into this  Agreement  on its behalf and  representation,
without having been modified,  restricted or revoked as of the date of execution
of this Agreement,  as evidenced by (i) Public Deed No. 20,373, granted on April
21, 1994,  before Mr. Rogelio  Magana Luna,  Notary Public No. 56 of the Federal
District,  whose first deed was inscribed under number 23,900, page 12 of volume
268 of the Public  Registry  of  Property  and  Commerce of the city of San Luis
Potasi, San Luis Potasi.

         c) That it is negotiating with the Canadian  Imperial Bank of Commerce,
New York  office  ("CIBC"),  a line of credit for the purpose of granting to the
Borrower the requested  loan in  accordance  with this  Agreement,  which can be
contracted  with Bancomer with CIBC or any other  financial  institution  at the
option of Bancomer  (herein  after  defined as the "Line of Credit");  provided,
however, if Bancomer negotiates the Line of Credit with a financial  institution
different  from CIBC,  then all  references to CIBC in this  agreement  shall be
understood as referring to such other financial  institution  provided that such
negotiation  does not alter terms and conditions as provided in this  Agreement,
and subject to the provisions of Clause 31 of this Agreement.

         d)  That  based  on  the   Borrower's   declarations,   statements  and
warranties, it is willing to grant the loan requested by the Borrower, under the
terms and conditions set forth in this Agreement.

         NOW THEREFORE,  in  consideration  of the foregoing  declarations,  the
parties hereto agree to the following:


                                    SECTIONS


         Section  1.  Certain  Definitions.  As  used  in  this  Agreement,  the
following terms shall have the respective meanings set forth below:

         A. "Additional  Income",  means any and all of the Borrower's rights to
collect  any kind of fees,  consideration  or  payment  for any  other  services
rendered to any third party in connection  with the overhaul of locomotives  and
maintenance of other rail  equipment,  different than the Rights for Collection,
and/or income for any other concept.

         B. "Agreement",  means this Loan Agreement entered into by Bancomer, as
lender, and the Borrower, as borrower along with its Exhibits.

         C. "Bancomer  CDs",  means  certificates of deposit issued by Bancomer,
S.A.,  London  Branch and offered on the London  market,  as  negotiable  bearer
instruments  transferable  without  endorsement,  which  conform  to the Bank of
England's  guidelines and the British Banker's Association market guidelines for
certificates of deposit on the London market.

         D.  "Bancomer CDs Rate",  means,  with respect to any failure to pay on
the part of the Borrower,  the average rate, as determined by Bancomer, at which
Bancomer CDs with maturities of ninety (90) days are quoted in the London market
at 11:00 a.m.  (London  Time) two  Business  Days prior to the date on which the
Borrower  fails  to make  any  payment  to  Bancomer  in  accordance  with  this
Agreement.

         E. "Business  Day",  means any day in which dealings for the deposit of
Dollars are carried out in the London interbank  market,  and on which banks are
open for business in Mexico City,  Federal District,  United Mexican States, the
City of New York, New York and in London, England and accept deposits in Dollars
in the London interbank market.

         F. "CIBC",  will have the meaning  ascribed in Declaration II.C of this
Agreement.

         G.  "Comfort  Letter",  means the  comfort  letter  dated July 6, 1995,
signed by MK Rail for the  benefit of  Bancomer,  a copy of which is attached to
this Agreement as Exhibit "B".

         H.  "Consolidation  Date", means July 15, 1997 or any other date agreed
by the parties with CIBC.

         I. "Construction and Refurbishing  Program",  means the program for the
construction and refurbishing of Ferrocarriles' workshops and supply centers for
1997 in accordance with the terms and conditions of the Maintenance Agreement, a
copy of which is attached hereto as Exhibit "J".

         J. "Cost of Funds", means, with respect to any failure to pay on behalf
of the Borrower,  the cost of funds in Dollars to Bancomer,  for amounts similar
to the amount  created as a result of the  failure to pay by the  Borrower,  for
terms of thirty  (30) days,  including,  but not limited  to,  costs  derived by
virtue of  Bancomer's  failure to comply  with tax  reserves  for any  competent
authority,  calculated by Bancomer precisely from the date on which the Borrower
fails to make any payment to Bancomer.

         K. "Default Rate", means, with respect to the Loan  Disbursements,  the
interest  rate that  results  from the  higher of:  (i) the  Bancomer  CD's Rule
multiplied  by two (2) , and (ii) the Cost of Funds  multiplied by two (2). Once
the applicable Default Rate is determined,  Bancomer will notify the Borrower of
such  Default  Rate which  will,  in the absence of  manifest  error,  be final,
conclusive and obligatory for the Borrower.

         L.  "Debts",  means,  with  respect  to the  Borrower,  : (i) debts for
amounts of money in Pesos,  Dollars or any other  currency;  (ii) all contingent
liabilities that result from discounting with recourse  negotiable  instruments;
and (iii) all contingent  liabilities  that result from any performance  bond or
other similar  instrument by which contingent  responsibilities  are assumed for
obligations to third parties.

         M. "Disbursement Date", means with respect to each of the Disbursements
of the  Loan,  the  Business  Day on which  Bancomer  disburses  the  respective
Disbursement of the Loan.

         N. "Disbursement  Period", shall have the meaning ascribed to such term
in Clause 4 hereto.

         O. "Dollars" and "U.S.$", means the legal currency in the United States
of America.

         P. "Event of Default",  shall have the meaning ascribed to such term in
Section 18 hereof.

         Q. "Exhibit", means any writing, list, catalog, drawing, graphic and/or
other  document  attached  to this  Agreement,  which when  referred  to by this
Agreement  and  attached,  forms part of this  Agreement as if it were  inserted
completely in the place of places referenced.

         R.  "Eximbank  Loan  Agreement",  has  the  meaning  ascribed  to it in
Declaration I.c. of this Agreement.

         S.       "Ferrocarriles", means Ferrocarriles Nacionales de Mexico.

         T.   "Ferrocarriles   Agreement",   means   the   document   issued  by
Ferrocarriles  substantially  in the  form  of the  document  attached  to  this
Agreement as Annex A, under which  Ferrocarriles  confirms,  among other things,
its consent to assign the Rights for the Collection of Payments derived from the
Maintenance Contract.

         U.  "Financial  Ratios",  means those financial  ratios  established in
Exhibit "H" to this  Agreement  and which must be complied  with by the Borrower
during the life of this Agreement.

         V. "Financial  Supervisor" shall have the meaning ascribed to such term
in the Trust.

         W. "Funding  Rate" means LIBOR plus two and eleven  sixteenths  percent
(2.6875%).

         X.  "Interest  Payment  Dates",   means,  with  respect  to  each  Loan
Disbursement, the 15th day of each of the months of February and August of every
calendar  year or any other dates  agreed by the parties  with CIBC,  commencing
from the date of the first Loan  Disbursement is made;  provided,  however that:
(i) the first Interest Payment Date shall be with respect to Loan  Disbursements
made prior to the Consolidation  Date shall be the Consolidation  Date; (ii) the
last Interest  Payment Date shall be the last Principal  Payment Date, and (iii)
if any of these  dates  falls on a date  which is not a Business  Day,  then the
corresponding Interest Payment Date shall be the next succeeding Business Day.

         Y. "Interest  Period",  means, with respect to each Disbursement of the
Loan (i) the period that begins on the respective Disbursement Date and ends on,
but does not include, the following Interest Payment Date and (ii) subsequently,
the period that begins on each  Interest  Payment Date and ends on, but does not
include, the following Interest Payment Date.

         Z. "Interest Rate",  means,  with respect to each Loan Disbursement and
for each Interest  Period,  the Funding Rate plus the Spread.  Once the Interest
Rate applicable for an Interest  Period is determined,  Bancomer will notify the
Borrower of such Interest Rate, which will, in the absence of manifest error, be
final, conclusive and obligatory for the Borrower.

         AA. "Libor",  means,  (i) for any Interest Period  occurring within the
period  which  begins on the date of signing of this  Agreement  and ends on the
Consolidation  Date and with  respect to the unpaid  balance of the Loan  during
such period,  the arithmetic mean (rounded upward, if necessary,  to the nearest
1/16 of 1%), as  determined  by the London CIBC  office,  of the rates per annum
offered by prime banks in the London  interbank  market of Dollar  deposits  for
terms equal to or similar to such Interest  Period and in amounts  approximately
equal or similar to the principal  amount of the respective  Loan  Disbursement,
payable during such Interest Period at approximately  11:00 am (London time) two
Business  Days before the first day of such  Interest  Period,  and (ii) for any
Interest Period  occurring from the  Consolidation  Date and with respect to the
unpaid  balance of the Loan from such date,  the fixed  rate of  interest  which
results from a  determination  of the arithmetic  average  (rounded  upward,  if
necessary,  to the nearest 1/16 of 1%), as determined by the London CIBC office,
of the rates per annum offered by prime banks in the London  interbank market of
Dollar  deposits  for terms equal or similar to 39 (thirty  nine)  months and in
amounts  approximately  equal or similar to the unpaid principal  balance of the
Loan at  approximately  11:00 am  (London  time) two  Business  Days  before the
Consolidation Date.

         BB.  "Line  of  Credit",  shall  have  the  meaning  ascribed  to it in
Declaration II.c) of this Agreement.

         CC. "Loan", means up to the full amount of the Loan made by Bancomer to
the  Borrower  as  established  in Section 2 of this  Agreement  under the terms
hereof.

         DD. "Loan Disbursements",  means the disbursements of the Loan that the
Borrower  makes  in  accordance  with  the  terms  of this  Agreement;  with the
understanding, however, that: (i) the Borrower can only make one disbursement of
the Loan for each calendar month during the Disbursement  Period; (ii) the total
amount of the loan shall be disbursed in 3 (three) Loan Disbursements, and (iii)
each of the Loan  Disbursements  cannot be less than  US$1,000,000  (One Million
Dollars).

         EE.  "Loan  Repayment   Dates",   means,  with  respect  to  each  Loan
Disbursement, the 15th day of the months of February and August of each calendar
year, or any other date which the parties may agree with CIBC,  commencing  from
the date on which the first Loan Disbursement is made;  provided,  however that:
(i) the first Loan Repayment  Date shall be August 15, 1997;  (ii) the last Loan
Repayment  Date  cannot fall on a date later than the fifth  anniversary  of the
Consolidation  Date, and (iii) if any of those dates falls on a day other than a
Business  Day,  then the  corresponding  Loan  Repayment  Date shall be the next
succeeding Business Day.

         FF.  "Maintenance  Agreement",   means  the  Maintenance  Agreement  of
Tractive  and Hauling  Equipment  entered  into by and between the  Borrower and
Ferrocarriles on March 15, 1994 and the amending  agreement thereto dated August
30, 1996, copies of which are attached hereto as Exhibit E.

         GG.  "MK Rail",  means MK Rail  Corporation,  a  Delaware  corporation,
United States of America.

         HH. "MK Rail Debt",  means the  financing  that as of the present  date
equals US$16,551,000.67 (Sixteen Million Five Hundred Fifty One Thousand and One
67/100  Dollars)  extended  by MK Rail in favor of the  Borrower  and for  which
payment is  subordinated  to the  payment of the Loan and the  Eximbank  Loan in
accordance with the Subordination Agreement.

         II. "PCGA", means the generally accepted Mexican accounting principles,
applied  on a  basis  consistent  with  the  individual  and/or,  in  its  case,
consolidated financial information of the Borrower.

         JJ.  "Pesos"  and the sign "$" means the legal  currency  of the United
Mexican States.

         KK. "Promissory Notes",  means the Promissory Notes to be subscribed by
the Borrower in favor of Bancomer to evidence  each Loan  Disbursement  in terms
substantially similar to the form of Promissory Notes attached hereto as Exhibit
"I".

         LL. "Regulatory Change", shall have the meaning as defined in paragraph
C, Clause 14 of this Agreement.

         MM.  "Reserve  Fund",  means  the  "Fondo de  Reserva"  as such term is
defined in the Trust.

         NN. "Rights for Collection", means the Borrower's rights to collect the
maintenance fees from Ferrocarriles  pursuant to the Maintenance  Agreement,  as
well as any other  right for  collection  the  Borrower  has from  Ferrocarriles
pursuant to the  Maintenance  Agreement,  including,  without  limiting  to, the
rights  the  Borrower  has  to  receive  from   Ferrocarriles  any  amount  that
Ferrocarriles must pay the Borrower in the event of default or early termination
of the  Maintenance  Agreement,  pursuant to the  Maintenance  Agreement and the
Ferrocarriles Agreement.

         OO.      "Spread", means three (3.00) percentage points.

         PP. "Subordination Agreement",  means the subordination agreement dated
July 6, 1995  between  Bancomer and MK Rail, a copy of which is attached to this
Agreement  as Exhibit  "F",  through  which MK Rail  agrees to  subordinate  the
payment of MK Rail Debt to the payment of the Loan and the Eximbank Loan.

         QQ. "Taxes",  means whatever taxes, tributes,  contributions,  charges,
deductions  or  retention  of any nature that are imposed or made at any time by
any authority.

         RR. "Technical  Assistance  Agreement",  means the Technical Assistance
Agreement  dated  January 1, 1995 between the  Borrower  and MK Rail,  and under
which MK Rail will provide technical  assistance to the Borrower in order for it
to comply with the terms and conditions of the Maintenance  Agreement, a copy of
which is attached to this Agreement as Exhibit D.

         SS. "Technical  Committee",  means the "Comite Tecnico" as such term is
defined in the Trust.

         TT.  "Technical  Supervisor",  shall have the  meaning  ascribed in the
Trust Agreement.

         UU.   "Technical   Supervisor's   Certificate",   means   each  of  the
certificates  issued by the  Technical  Supervisor  with respect to the work and
services performed by the Borrower in accordance with the Maintenance  Contract,
substantially in the form of Exhibit "C" to this Agreement.

         VV. "Trust", means the administration, guaranty and payment trust dated
July 6, 1995 and amended by means of an amending  agreement  dated  December 13,
1996,  incorporated by the Borrower, copy of which is attached hereto as Exhibit
"G", under which the Borrower  contributed  the Rights for Collection  and, when
applicable, the Additional Income in accordance with the terms of this agreement
and the  Eximbank  Agreement,  to  guarantee  its  payment  obligations  derived
hereunder and under the Eximbank Agreement.

The terms defined in accordance with this Agreement are expressed in singular as
well as plural and they refer to generic as well as all generics. The references
in this  Agreement  to  Recitals,  Sections,  Paragraphs  or Exhibits  means the
Recitals, Sections, Paragraphs or Exhibits of or in reference to this Agreement.


         Section 2. Amount of the Loan.  Bancomer  hereby  establishes the Loan,
upon the  terms and  conditions  set  forth in this  Agreement,  in favor of the
Borrower in an amount of up to  U.S.$3,500,000.00  (Three  Million  Five Hundred
00/100  Dollars),  which  amount does not  include  interest,  commissions,  nor
expenses derived thereof.

         Section 3. Use of  Proceeds.  The Loan shall be applied by the Borrower
only for financing of up to 75% (seventy five percent) of cost of investments in
shops  and  supply  centers  owned  by  Ferrocarriles'  in  accordance  with the
Maintenance Contract and the Construction and Refurbishing Program subsequent to
October 31, 1996, but prior to the Consolidation Date.

         Section 4.  Disbursement  Period.  The Borrower may disburse all of the
Loan, in up to three Loan  Disbursements,  during the period that shall begin on
the date hereof and shall end on the Consolidation  (hereinafter  referred to as
the "Disbursement Period").


         Section  5.  Loan   Disbursement.   During  the   Disbursement   Period
established in Section 4 above,  the Borrower  shall notify  Bancomer in writing
five (5) Business Days in advance, of its intention to make a Loan Disbursement,
specifying (i) the amount of such Loan Disbursement,  and (ii) the date on which
the  Loan  Disbursement  is to be  made.  In the  event  all  of the  conditions
precedent  established  in (i)  Section 7 of this  Agreement  for the first Loan
Disbursement,  and (ii) Section 8 for subsequent Loan  Disbursements,  have been
satisfied and that the Promissory Notes referred to in Section 6 hereof is under
terms and conditions  satisfactory  to Bancomer,  then Bancomer will disburse to
the Borrower the Loan  Disbursement  on the date  requested by the Borrower,  by
deposit of the  corresponding  proceeds  in the bank  account  indicated  by the
borrower to Bancomer  for such  purpose in the  notification  mentioned  in this
section.


         Section 6. Promissory Notes. Simultaneously with the notice referred to
in Section 5 hereof,  the Borrower shall furnish  Bancomer with Promissory Notes
in order to evidence the Loan Disbursement,  which: (i) shall be in an amount of
principal equal to the Loan Disbursement; (ii) shall include as interest payment
dates the Interest  Payment  Dates;  and (iii) shall have as a maturity date the
Consolidation Date.

Similarly,  and  subsequent to the  Consolidation  Date,  the Borrower  shall be
obligated to document the Loan Disbursements with new Promissory Notes such that
said notes reflect the Interest Rate and Loan Repayment Dates  applicable to the
Interest Periods  subsequent to the  Consolidation  Date. The parties agree that
the documentation of the Loan  Disbursements  with new Promissory Notes shall in
no event be interpreted  as a novation of any of the  obligations of the parties
to this Agreement.


         Section 7. Conditions  Precedent for the First Loan  Disbursement.  The
obligation of Bancomer to disburse the first Loan Disbursement  shall be subject
to  the  prior  satisfaction  of  the  following  conditions  precedent,  or  to
Bancomer's waiver in writing thereof:

         A. Bancomer and CIBC have received from the Borrower the  documentation
required in  conformance  with the policies and guidelines of CIBC for the first
disbursement  of the loan  and  such  documentation  shall  be  satisfactory  to
Bancomer and CIBC.  In any case,  Bancomer  will inform the Borrower  within ten
(10)  Business   Days  that  the  Borrower  has  furnished   Bancomer  with  the
documentation  that is requested in accordance  with the policies and guidelines
of CIBC and if such  documentation  complies with the policies and guidelines of
CIBC.

         B.       The Line of Credit is open and available in favor of Bancomer.

         C.  Bancomer  has  received  from  CIBC the Funds  from the first  Loan
Disbursement with the understanding,  however, that if CIBC suspends funding for
whatever  and such  funding  is not  renewed  within  the  Disbursement  Period,
Bancomer  will not be obliged to make the first Loan  Disbursement  without  any
responsibility  on the  part  of  Bancomer,  except  as  provided  in the  first
paragraph of Clause 12 of this Agreement.

         D. Bancomer shall have received,  to its entire  satisfaction,  a copy,
certified by the Secretary of the Board of Directors of the Borrower, of (i) the
current  by-laws of the Borrower and, (ii) the power of attorney  granted by the
Borrower to its corresponding representative in order to legally enter into this
Agreement and execute the Promissory Notes.

         E. Bancomer has received  from the Borrower a  certificate  executed by
the Corporate  Secretary in which is specified the name and shows the signatures
of the  person(s)  authorized  by the  Borrower to sign this  Agreement  and the
Promissory Notes for the first and subsequent Loan Disbursements.

         F.  Bancomer  shall  have  received  to  its  entire  satisfaction  the
notification  referred to in Section 5 of this Agreement and the Promissory Note
evidencing the first Loan Disbursement.

         G.  Bancomer has received to its entire  satisfaction:  (i) the Comfort
Letter duly signed by MK Rail and (ii) the Subordination Agreement.

         H.  Bancomer  shall  have  received  to  its  entire  satisfaction  the
certificate  issued by the  Technical  Supervisor  pursuant  to the  first  Loan
Disbursement which certifies that the Technical Supervisor has: (i) reviewed and
inspected the works and services in question;  (ii) confirmed that the works and
services in question  comply with the terms and  conditions  of the  Maintenance
Contract;  and (iii)  certifies the amount of the costs eligible for works to be
financed with the first Loan Disbursement.

         I. The Trust and its amendments  shall have been duly  incorporated and
be in full force and effect to Bancomer's satisfaction.

         J. The Maintenance  Contract and the Ferrocarriles  Agreement should be
validly existing and on terms and conditions satisfactory to Bancomer.

         K. The amount of the first Loan Disbursement to be disbursed should not
exceed the maximum amount
of the Loan.

         L. The  representations  and  warranties  of the Borrower  contained in
Section 17 of this Agreement  hereof shall continue to be true and correct as of
the date when the first Loan  Disbursement  shall occur, as if they were made on
such date,  and the Borrower  shall so certify in writing in the event  Bancomer
requests the Borrower to do so.

         M. No Event of Default  and no event which but for the giving of notice
or the lapse of time or both would constitute an Event of Default exists or will
exist after giving effect to the Loan Disbursement.

         N.  Bancomer  shall  have  received  to  its  entire  satisfaction  the
documentation  for the Technical  Assistance  Agreement and such Agreement is in
full force and effect and will  continue  to exist for a term at least  equal to
the Maintenance Contract.

         O. Bancomer has received the Program of Construction  and  Refurbishing
on terms satisfactory to Bancomer.

         P. The Borrower has paid all commissions due to be paid before the date
of the first Loan  Disbursement  in accordance with Section 12 of this Agreement
as well as the costs and  expenses  that are  referred  to in Section 30 of this
Agreement.

         Q. The Borrower shall have evidenced, to Bancomer's satisfaction,  that
the  Maintenance  Agreement  has a minimum  duration of at least eight (8) years
from the date of its  commencement,  and that the  Borrower  shall  evidence  to
Bancomer's  satisfaction  that  there is no  breach  caused by the  Borrower  or
Ferrocarriles under the Maintenance Agreement.

         R. Bancomer  shall have received to its entire  satisfaction  a copy of
the insurance  policies  which the Borrower  must  maintain in  accordance  with
Section 19 of this Agreement.


         Section 8. Conditions Precedent for Subsequent Loan Disbursements.  The
obligation of Bancomer to disburse the subsequent  Loan  Disbursements  shall be
subject to the prior satisfaction of the following conditions  precedent,  or to
Bancomer's waiver in writing thereof:

         A.  Bancomer  and  CIBC  have  received  from  the  Borrower   whatever
documentation  is required in  conformance  with the policies and  guidelines of
CIBC for the subsequent  disbursements of the loan and such documentation  shall
be  satisfactory  to Bancomer and CIBC.  In any case,  Bancomer  will inform the
Borrower within ten (10) Business Days that the Borrower has furnished  Bancomer
with the  documentation  that is requested in  accordance  with the policies and
guidelines  of CIBC and if such  documentation  complies  with the  policies and
guidelines of CIBC.

         B.       The Line of Credit is open and available in favor of Bancomer.

         C.  Bancomer has received from CIBC the Funds for the  subsequent  Loan
Disbursements: with the understanding, however, that if CIBC suspends funding of
the  Loan  for  whatever  reason,  Bancomer  will  not be  obliged  to make  the
subsequent  Loan  Disbursements  without  any  responsibility  on  the  part  of
Bancomer,  except as  provided  in the first  paragraphs  of  Section 12 of this
Agreement.

         D. Bancomer shall have received to its entire  satisfaction each one of
the Promissory Note evidencing the subsequent Loan Disbursements.

         E. The amount of the Loan Disbursements to be disbursed does not exceed
the maximum amount of the Loan, and that this  disbursement will not create as a
consequence that the total balance of all the Loan  Disbursements  from the date
of the first  disbursement  through to the subsequent  disbursements  should not
exceed the maximum amount of the Loan.

         F.  Bancomer  shall  have  received  to its  entire  satisfaction,  the
certificate issued by the Technical  Supervisor  pursuant to the subsequent Loan
Disbursements  which  certifies that the Technical  Supervisor has: (i) reviewed
and  inspected  the  works and  services  in  question  in  accordance  with the
applicable terms and condition of the Maintenance Contract;  (ii) confirmed that
the works and services in question  comply with the terms and  conditions of the
Maintenance  Contract;  and (iii) certifies the amount of the costs eligible for
works to be financed with the subsequent Loan Disbursements.

         G. The Borrower has paid all commissions due to be paid before the date
of the first Loan  Disbursement  in accordance with Section 12 of this Agreement
and which should be paid during the term of this Agreement, as well as the costs
and expensed referred to in Section 30 of this Agreement,

         H. The  representations  and  warranties  of the Borrower  contained in
Section 17 of this Agreement  hereof shall continue to be true and correct as of
the date of the  subsequent  Loan  Disbursements,  as if they  were made on such
date,  and the  Borrower  shall so  certify  in  writing  in the event  Bancomer
requests the Borrower to do so.

         I. No Event of Default  and no event which but for the giving of notice
or the lapse of time or both would constitute an Event of Default exists or will
exist after giving effect to the Loan Disbursement.


         Section 9. Payments of Principal. The Loan shall be paid to Bancomer in
ten (10) semi-annual and successive  installments of principal,  payable on each
Principal  Payment Date,  each of such  installments in the amounts set forth in
Exhibit "K" attached hereto; provided,  however, that the Borrower shall pay the
total amount outstanding on the Loan on the last Principal Payment Date.


         Section 10. Prepayment. The Borrower may not prepay the Loan in full or
in part without  Bancomer's  prior  written  consent.  In the event the Borrower
wishes to obtain such consent,  and unless Bancomer otherwise agrees in writing:
(i) the Borrower shall deliver to Bancomer in writing an  irrevocable  notice to
prepay the Loan,  at least thirty (30) Calendar Days before the date on which it
intends to prepay the Loan;  (ii) any prepayment of the Loan shall be made on an
Interest Payment Date; (iii) the Borrower shall pay all interest due and accrued
on the  Loan's  unpaid  principal  amount;  (iv)  the  Borrower  shall  pay  all
commissions owing and payable on the date on which the Borrower wishes to make a
prepayment;  (v) any prepayment must be in an amount equal to or in any multiple
of  US$100,000.00  (One  Hundred  Thousand  00/100  Dollars),  and (vi)  partial
prepayments shall be applied by Bancomer, at its sole discretion, to the payment
of installments of principal in inverse order of maturity.

         At any time  Bancomer  agrees to receive from the Borrower a partial or
total  prepayment  as referred to in this  Section,  the  Borrower  shall pay to
Bancomer a commission  or premium to be  determined  by applying to said amount,
the following percentages:

         A. Two and one half percent  (2.5%) in the event the prepayment is made
during the period between (i) the date on which the first Loan  Disbursement  is
made and,  (ii) the last  Calendar  Day of the period  ending two years from the
date of the first Loan Disbursement; or

         B. Two  percent  (2%) in the event the  prepayment  is made  during the
period between (i) the Calendar Day immediately succeeding the last Calendar Day
of a  period  of two (2)  calendar  years as from  the  date of the  first  Loan
Disbursement  and,  (ii) the last day of a  calendar  period  of five (5)  years
counted from the first Loan Disbursement date; and

         C. All and each of the commissions that are charged by CIBC to Bancomer
in relation to the prepayment of the CIBC Line of Credit which Bancomer notifies
to the Borrower.


         Section 11.  Interest.  From and after the Loan  Disbursement and until
the last  Principal  Payment Date is made,  the  Borrower  shall pay to Bancomer
ordinary  interest  on the  unpaid  principal  amount  of Loan on each  Interest
Payment Date for each Interest Period,  at a rate equal at all times during each
Interest Period to the Interest Rate; provided,  however,  that if any amount of
principal  is not paid in full when due, the unpaid  amount of  principal  shall
bear interest  from the date on which  payment  should have been made until said
amount  is paid in full,  at a rate  equal to the  Default  Rate,  and  shall be
payable upon demand.

         Ordinary and delinquent  interest rates shall be calculated  based on a
year of 360 days and the actual number of days elapsed.


         Section 12.  Commissions.  The Borrower  shall be obligated  under this
Agreement to pay the following commissions;  provided,  however, that if for any
reason CIBC shall suspend the Line of Credit,  and as a result,  the Borrower is
not able to make Loan Disbursements,  then Bancomer shall reimburse the Borrower
the amounts which represent commissions paid to Bancomer as mentioned below on a
proportional  basis to the  amounts  which  the  Borrower  has  effectively  not
disbursed; and if no Loan Disbursements have been made, Bancomer shall reimburse
to the Borrower the commissions which have been paid:

         A. An opening commission equivalent to zero point fifty percent (0.50%)
on the total amount of the Loan, payable to Bancomer on December 30, 1996.

         B. A structuring  commission  equivalent to one percent  (1.00%) on the
total amount of the Loan,
payable to Bancomer on December 30, 1996.

         C. An  opening  commission  to be  charged  by CIBC equal to zero point
fifty  percent  (0.50%)  of the total  amount of the Loan,  payable on the dates
indicated by CIBC.

         D. A commitment  fee to be charged by CIBC which shall be equal to zero
point fifty percent  (0.50%) per annum on the  undisbursed  balance of the Loan,
payable on the dates indicated by CIBC.

The commissions described in paragraphs C and D of this section shall be paid by
the Borrower only if they are charged by CIBC.


         Section 13.  Alternate Interest Rate.

         A. If  prior  to the  commencement  of any  Interest  Period,  Bancomer
receives  notice from CIBC that (i) in CIBC's  ordinary course of business there
is no London  interbank  market for  deposits  in Dollars  available  to CIBC in
amounts and for terms sufficient to make any Loan  Disbursement;  or (ii) due to
circumstances  affecting the London  interbank  market,  adequate methods do not
exist to determine Libor for the respective Interest Period; or (iii) Libor does
not  reflect  CIBC's  actual  cost  for  funding  the  Loan or  disbursement  or
maintenance of the respective  Loan  disbursement;  and (iv) that for any of the
above-mentioned  reasons CIBC uses the rate determined by CIBC in such notice to
substitute for Libor in determining  the Funding Rate (the  "Substitute  Funding
Rate"),  then Bancomer shall notify the Borrower of such  circumstances  and the
Borrower  agrees to pay to  Bancomer,  during  the  entire  period for which the
circumstances  indicated by CIBC persist,  interest on the unpaid balance of the
Loan at the Substitute Funding Rate plus the Spread.

         B. If at any time during the term of this Agreement  Bancomer  receives
notification from CIBC that in the reasonable judgment of CIBC, it is illegal to
disburse  or  maintain  any Loan  Disbursement  based upon  Libor,  and for this
reason,  CIBC shall use the Substitute Funding Rate as set forth in such notice,
then Bancomer,  accordingly,  shall notify the Borrower of these  circumstances,
and the Borrower agrees to pay to Bancomer,  during the entire time during which
the circumstances indicated by CIBC continue,  interest on the unpaid balance of
the Loan at the Substitute Funding Rate plus the Spread.

         C. Within ten (10)  Calendar  Days after the notice  referred to in the
previous  Paragraph A and/or B above,  the Borrower may give notice (which shall
be irrevocable) to Bancomer,  of its decision to prepay the Loan,  together with
the accrued and unpaid interest as of such date, which will be calculated at the
Interest Rate in effect as of the date on which the Borrower receives the notice
referred to in Paragraph A and/or B above,  in which case the Borrower shall pay
the total unpaid principal amount of the Loan accrued interest thereon and other
unpaid amounts  payable to Bancomer as provided hereof and as provided under the
Promissory  Notes in a term that shall not exceed  twenty (20)  Calendar Days as
from the date of the notice.

         D. In any of the events  referred  to in  Paragraphs  A and/or B above,
once the Borrower  receives notice in writing from Bancomer and/or CIBC that the
circumstances referred to in said Paragraphs A and/or B have ceased to exist, at
the end of the then current Interest Period, interest on the Loan shall cease to
be calculated  using the Substitute  Funding Rate and shall be calculated at the
Interest Rate during the immediately succeeding Interest Period for the Loan.

         E. In any of the events referred to in Paragraphs A and/or B above, the
Borrower   shall   substitute   the   Promissory   Notes   evidencing  the  Loan
Disbursements,  in order to reflect the terms and  conditions of interest  rates
and other conditions applicable to the Loan from then on.


<PAGE>


         Section 14.  Increased Costs and Funding Losses.

         A. If by virtue of any Regulatory  Change which (i) changes the taxable
basis of any amount under the Loan payable to Bancomer by the Borrower and/or by
Bancomer to CIBC  (except for taxes  charged on the total net income of Bancomer
and/or CIBC);  (ii) imposes or modifies any reserves,  deposits,  taxes or other
conditions  affecting Bancomer and/or CIBC; or (iii) imposes any other condition
which affects this Agreement or the Promissory Notes, or there is an increase in
the cost to Bancomer  and/or CIBC of opening,  maintaining,  or  disbursing  the
Loan,  the Borrower  shall pay to Bancomer  upon demand by means of prior notice
from Bancomer, reasonable and documentable additional amounts which are required
to  compensate  Bancomer  and/or CIBC for such  increase in the cost of opening,
maintaining or disbursing the Loan.

         B.  Notwithstanding the provisions of Paragraph A above, if CIBC at any
time  notifies  Bancomer that Bancomer must pay to CIBC any increase in the cost
of opening,  disbursing or maintaining the Line of Credit from CIBC,  which CIBC
determines under the Line of Credit,  then Bancomer shall so notify the Borrower
and the  Borrower  agrees to  reimburse  Bancomer  upon demand the amount  which
Bancomer is obligated to pay to CIBC in accordance with this notification.

         C. For the purposes of this Section, "Regulatory Change" shall mean any
change or modification to, or the introduction of, any law, regulation, circular
or other  provision  issued by any  authority  of the  United  States of America
and/or the United Mexican States applicable to Bancomer and/or CIBC or to any of
their respective offices charges with administering and funding the Loan.

         D.  Bancomer  shall use its best  efforts to avoid an increase in costs
due to  Regulatory  Changes if  possible  by changing  the office  charges  with
administering  the  Loan  and if by  doing  so,  Bancomer  does  not  incur  any
additional cost or expense.

         E. Any request for payment or  reimbursement  notified to the  Borrower
under this Section shall be delivered together with a certificate issued by CIBC
and/or Bancomer setting forth in reasonable  detail the bases for calculation of
the amounts to be paid or  reimbursed,  and such  certificate,  absent  manifest
error shall be conclusive and binding upon the Borrower.

         F.  Any  increase  in the  cost to  Bancomer  and/or  CIBC of  opening,
maintaining or disbursing the Loan which due to reasons attributable to Bancomer
results in the  imposition  by Banco de Mexico on  Bancomer  of any fine for the
failure of  Bancomer to comply  with any law or with the  regulations  issued by
Banco de Mexico shall not be considered an increase in cost to Bancomer.


         Section 15. Taxes.

         A.  All  amounts  that  the  Borrower  shall  pay for  amortization  of
principal  of the  Loan,  ordinary  and  default  interest  as the  case may be,
commissions,  expenses and costs,  and  whatever  other amount to be paid by the
Borrower to Bancomer in accordance with this Agreement and the Promissory  Notes
will be paid without  deduction  for and free of any Taxes,  except for Taxes on
the Mexican  income that is charged on the total net income of Bancomer and that
Bancomer must pay directly under applicable law.

         B. In the case that the Borrower is obliged to make any  withholding on
the  payments of  principal,  ordinary  or default  interest as the case may be,
commissions, expenses and costs and any other quantity to be paid to Bancomer in
accordance  with this Agreement and the Promissory  Notes for reason of Taxes or
any other reason,  the Borrower will pay to Bancomer the additional amounts that
are required so that Bancomer receives the amount that it would have received if
there had not been such withholding.

         C. All Taxes will be paid by the  Borrower  for its own account and not
later than the date on which such corresponding  Taxes are due and payable.  The
Borrower  will also furnish to Bancomer the original  receipts that evidence the
payment of such Taxes within five (5) working days  following  the date on which
such Taxes were due and payable.

         D. The  Borrower  will  indemnify  Bancomer for all charges to Bancomer
which arise  because of such Taxes and will be obliged to reimburse  Bancomer on
demand for any  quantity  that  Bancomer  will be obligated to pay for reason of
such Taxes caused by the  transaction  contemplated  in this  Agreement  and the
Promissory Notes.

         E. The  obligations  of the  Borrower  derived  from this  Section will
continue to exist for a period  determined by the Taxes  independent  of whether
the Loan is totally paid prior to the term of such period.


         Section 16.  Place and Form of Payment.

         The  Loan  shall  be  repaid  by the  Borrower  precisely  on the  Loan
Repayment  Dates  and  interest  on the Loan  shall be paid by the  Borrower  to
Bancomer on each Interest Payment Date.

         All  amounts  of  principal,   ordinary  interest,   penalty  interest,
commissions  and any other amount payable by the Borrower to Bancomer  hereunder
and  under  the  Promissory  Notes  shall  be paid  exclusively  in  Dollars  in
immediately  available funds, without any deduction,  retention or setoff of any
nature whatsoever by crediting the account No. 400 019042 of Bancomer,  S.A., at
Chase Manhattan Bank, N.A. ABA No. 021 000 128 New York, New York, United States
of America (or in any other place that  Bancomer  indicates to the Borrower with
prior notice) no later than 11:00  (eleven)  o'clock (New York time) on the date
on which the corresponding payment is due.

         Section  17.  Representations  and  Warranties  of  the  Borrower.  The
Borrower represents and warrants to Bancomer that:

         A. The Borrower is a corporation  duly  organized and validly  existing
under the laws of the United Mexican States.

         B. The execution, delivery and performance by the Borrower of this Loan
Agreement,  the Promissory Notes and the Trust and the Maintenance  Contract (i)
do not and will not violate any  provision of any  applicable  law of the United
Mexican States or of any political subdivision thereof; (ii) do not and will not
result in the breach of, or constitute a default  under,  or require any consent
under the charter and by-laws of the Borrower,  or any  indenture,  bank loan or
credit  agreement,  mortgage,  or other  agreement  or  instrument  to which the
Borrower is a party or by which the Borrower or any of its respective properties
may be bound or  affected,  and (iii) when duly  executed  and  delivered by the
Borrower,  will constitute the valid, binding and enforceable obligations of the
Borrower in accordance with its respective terms,  except as limited by the laws
relating to insolvency or bankruptcy.

         C. All  authorizations,  registrations  and approvals of, or filings or
registrations  with the United Mexican  States,  or of any  governmental  agency
thereof or therein  which are  necessary  or  advisable  (i) for the  execution,
delivery and  performance of this Agreement and the Promissory  Notes,  and (ii)
the  validity,  binding  effect and  enforceability  of this  Agreement  and the
Promissory  Notes have been obtained and are binding and enforceable and in full
force and effect.

         D. The  Borrower  is in  compliance  with the  payment of all taxes and
legal and contract liabilities,  which non-compliance would affect substantially
and adversely its financial standing.

         E.  There is no  action,  suit or  proceeding  at law by or before  any
governmental  agency  or  authority  now  pending  or, to the  knowledge  of the
Borrower, threatened against or affecting the Borrower, or any of its respective
properties or rights,  which if adversely  determined would substantially impair
the  right  of the  Borrower  to  carry  on its  business  substantially  as now
conducted,  or would materially  adversely affect the financial condition of the
Borrower.

         F. The audited financial  statements of the Borrower as of December 31,
1995,  reflect in an accurate and complete manner,  its financial standing as of
such  date,  were  prepared  in  accordance  with  PCGA,  and  there has been no
important  adverse  change  in its  financial  standing  since the date of those
financial statements and until the date of this Agreement.


         Section 18.  Covenants of the  Borrower.  Until  payment in full of the
Loan and the Promissory  Notes and  performance of all other  obligations of the
Borrower  hereunder and under the Promissory  Notes,  the Borrower  agrees that,
unless Bancomer shall otherwise consent in writing:

         A. To furnish  Bancomer  within sixty (60) Calendar Days  following the
end of every quarter of each accounting period,  quarterly financial  statements
(balance  sheet,  statement of profits and losses and surplus) duly certified by
its Director General and/or Finance Director.

         B. To furnish  Bancomer  within one hundred  twenty (120) Calendar Days
following the end of their respective fiscal year,  annual financial  statements
(balance sheet,  statement of profits and losses and surplus) duly audited by an
independent auditor.

         C. To provide  Bancomer  within forty five (45) Calendar Days after the
closing of each one of its accounting period, an annual  certificate  granted by
its insurance  agent  acceptable to Bancomer,  confirming  that their assets are
duly insured pursuant hereof.

         D. To provide  Bancomer within  forty-five (45) calendar days after the
end of each  quarter with a  comparison  of the actual  costs of  operation  and
administration  of the  Borrower  against the budgeted  costs of  operation  and
administration  through which the Technical  Committee  authorized  the payments
from the Trust for such matters.

         E. To provide Bancomer with prompt notice, under no circumstances later
than ten (10) days  after it has had  itself  knowledge  of,  of any event  that
represents,  or with  the  lapse  of time may  represent  an  Event of  Default,
together with a declaration  including the details of such event, and the action
proposed to be taken by the Borrower with respect thereto.

         F. Maintain its  accounting  information  and  statements in accordance
with PCGA.

         G. To provide Bancomer with all of the relevant information pursuant to
its business and financial standing as may be reasonably  requested by Bancomer,
in the  understanding  that Bancomer  might  inspect its  business,  request for
balance sheets or accounting statements, data or documents, and to make or cause
to make  appraisals  of its  assets  whenever  it deems it  necessary  to verify
compliance of the obligations of the Borrower derived hereof, the Borrower being
obligated to provide all of the facilities necessary to such effect.

         H. Provide to Bancomer  within  forty-five (45) calendar days after the
end of each quarter,  a Financial  Supervisor  report which indicates the manner
for  calculation  during  the  quarter  of the  corresponding  Reserve  Fund and
Financial Ratios.

         I. To preserve  and  maintain  its  corporate  status in full force and
effect,  as  well  as all  of its  rights,  licenses,  permits,  authorizations,
certifications, registrations and approvals required for the operation of all of
its business in each and every jurisdiction where it operate.

         J. To upkeep all of the necessary  assets for its business'  operations
and to procure and  provide  said  assets  with all the  services,  maintenance,
repairs,   substitutions,   additions   and/or  upgrading  deemed  necessary  or
convenient.

         K.  To   obtain   all  of  the   licenses,   authorizations,   permits,
certifications, registrations or approvals required hereinafter to allow for the
adequate performance of its obligations derived hereunder, the Promissory Notes,
and all laws, regulations,  decrees, agreements and applicable decrees issued by
any governmental authority.

         L. To pay on time  all of the  fiscal  debts  of its  business  and the
quotas of the Mexican Social  Security  Institute and of the National  Institute
for Workers  Housing  Development,  except for those that are in dispute in good
faith  by  the  Borrower,   through  the  right  procedures  and  by  previously
establishing the corresponding reserves.

         M. To duly comply with all of their respective contractual  obligations
including, without being limited to, the Maintenance Agreement.

         N. To furnish  Bancomer  with this  Agreement  duly  ratified  before a
Notary Public, within ten (10) Business Days after execution hereof.

         O. To furnish  Bancomer,  within sixty (60) calendar days following the
end of each  semester  of each and every  fiscal  year,  a letter  signed by the
Director General or Director of Finance which certifies that the Borrower is not
under breach of contract pursuant to the Maintenance Agreement.

         P. To provide Bancomer, within fifteen (15) calendar days after the end
of each calendar month,  financial information with respect to the Trust and the
business of the  Borrower,  so that  Bancomer  may  determine if the Borrower is
complying with the Financial Ratios that are referred to in Exhibit "H" hereto.

         Q. To provide to Bancomer,  within fifteen (15) calendar days after the
end of each  quarterly  financial  reporting  period,  a report  prepared by the
Technical  Supervisor  covering the progress of the Program of Construction  and
Remodeling and the services  carried out on the equipment in accordance with the
Maintenance Contract.

         R. To secure the insurance policies referred to in Section 19 hereof.

         S.  Maintain the Financial  Ratios  referred to in Exhibit "H" attached
hereto, for the periods referred in said Exhibit.


         T. Maintain the Reserve Fund,  during the entire term of the Agreement,
at an average  monthly  balance equal to the greater of (i) ten percent (10%) of
the sum of the outstanding balance of principal of the Loan and the principal of
the Eximbank Loan at the time when the Reserve Fund balance is  calculated,  and
(ii) the sum of the amounts of interest  and  principal  of the Loan and the and
Eximbank  Loan due and  payable by the  Borrower  to  Bancomer  on the  Interest
Payment Date and the  Principal  Payment Date which falls within one hundred and
fifty (150)  calendar  days after the date on which the Reserve  Fund balance is
calculated,  multiplied by one point  twenty-five  (1.25)  times;  provided that
during  the first six (6)  months  following  the last  Loan  Disbursement,  the
amounts  of the debt  service  under this  Agreement  shall be  included  in the
calculation  of the required  levels of the Reserve Fund, and that following the
end of such six (6) month  period,  such  amounts  shall not be included in this
calculation.  However, if the Borrower does not comply with the Financial Ratios
in such non-compliance is not cured within a period of thirty (30) calendar days
from the date on which  Bancomer  notifies the Borrower of such  non-compliance,
the Borrower shall be obligated to include such debt service in the  calculation
referred  to above  until the  Borrower is able to  demonstrate,  to  Bancomer's
satisfaction, that it is again in compliance with the Financial Ratios.

         U. Commit to the Trust Additional  Income within five (5) calendar days
after the date that Bancomer  notifies the  Borrower,  in case that, at whatever
time during the term of this  Agreement,  the Borrower  does not comply with the
financial  ratios that are referred to in paragraph S of Section 18, or does not
comply with the maintenance of the Reserve Fund minimum  balance  referred to in
paragraph T of Section 18.

         V. Comply with the  obligations  relating to the  utilization  of goods
financed  under this  Agreement as may be specified by CIBC and requested of the
Borrower by Bancomer.

         W.       To refrain from:

                    (i) paying  dividends,  without the prior written consent of
               Bancomer.

                    (ii) making  payments of whatever amount with respect to the
               MK Rail Debt without the prior written consent of Bancomer.

                    (iii) reducing its capital stock.

                    (iv)  modifying its corporate  purpose or change its line of
               business.

                    (v) filing for liquidation or dissolution.

                    (vi) performing, or refraining from any action, whenever the
               consequence  of it is to  waive  in  advance  the  term  for  the
               fulfillment of any of its contract liabilities.

                    (vii)  incurring  Debt for its charge  for (i) an  aggregate
               amount  greater than  US$1,000,000  (One Million  Dollars) or its
               equivalent in any other currency,  or (ii) terms greater than one
               (1) year,  without the prior written consent of Bancomer,  except
               for  indebtedness  mandated  by law or in the  normal  course  of
               business.

                    (viii) agree to any amendment to or  modification  of, waive
               any material right under, or terminate the Maintenance  Agreement
               and/or the Trust,  without  the prior  written  authorization  of
               Bancomer, which authorization shall not be unreasonably denied.

                    (ix) setoff in any way any amount  which is owed to it under
               the  Maintenance  Agreement;  provided that (i) if  Ferrocarriles
               shall make a setoff against any of the Borrower's invoices for an
               amount  greater  than  ten  percent  (10%) of such  invoice,  the
               Borrower  shall obtain from Bancomer  within thirty (30) calendar
               days after the date on which such setoff has occurred, Bancomer's
               approval in writing  for this  setoff,  and (ii) if the  Borrower
               shall not obtain the  authorization  from  Bancomer  specified in
               clause (i) above  within such  period,  Bancomer  may declare the
               existence of an Event of Acceleration."


         X. Maintain a commercial  credit account with MK Rail,  with respect to
         the  purchase of  materials  and  equipment  from MK Rail or any of its
         subsidiaries or affiliates, with a minimum balance equal to the greater
         of (i) the sum of U.S. $1,500,000.00 (One Million Five Hundred Thousand
         and 00/100 Dollars), and (ii) the amount which corresponds to purchases
         of  material  and  equipment  from MK Rail in the normal  course of its
         operation  during a period of 45 (forty-five)  calendar days;  provided
         however that if the minimum  balance in this  account  shall be reduced
         for any purpose  then the  Borrower  shall be obligated to increase the
         minimum  balance in the reserve  fund up to the amount equal to the sum
         of amounts of principal and interest  under the Loan due and payable to
         the Borrower to Bancomer on the Interest  Payment  Dates and  Principal
         Payment  Dates,  multiplied  by one point five (1.5)  times;  provided,
         however,  that the commercial credit account shall not be considered as
         part of the MK Rail Debt."


         Section 19.  Insurance.

         A. The Borrower shall evidence to Bancomer, to Bancomer's satisfaction,
within a thirty (30) Calendar Day term as from the date of this Agreement,  that
the Borrower has secured the insurance  policies  referred to in the Maintenance
Agreement, and that such insurance policies are in full force and effect.

         B. The  Borrower  shall  evidence to the  satisfaction  of Bancomer the
payment of the premiums for such  insurance with the  corresponding  receipts of
payment,   within  two  (2)  Business   Days  after  the  day  it  receives  the
corresponding request from Bancomer.

         C.  Notwithstanding the provisions of Section 20 of this Agreement,  in
the event  that for any  reason  the  Borrower  fails to comply  with any of its
obligations  established  under  this  Section,   Bancomer  shall  be  expressly
authorized to contract such insurance on behalf of the Borrower, and pay for all
of the  amounts  required to keep in effect  said  insurance,  in which case the
Borrower  shall pay,  on demand,  for the  amounts  spent by  Bancomer  for such
concepts,  in the  understanding  that such amounts shall cause  interest at the
Default  Interest Rate  calculated at the CPP rate multiplied by three (3), from
the date such  payment is made by Bancomer  and until such payment when they are
totally  paid for;  provided,  however,  that the  authorization  to Bancomer to
contract  insurance as set forth in this Section is not an obligation and in the
case  that  such   insurance  is  not   contracted,   Bancomer   shall  have  no
responsibility  therefore. In any case, Bancomer shall notify the Borrower as to
any  contraction  of  insurance  referred  to in this  Section  within  five (5)
Business Days after such insurance has been contracted for.

         For the  purposes of this  Paragraph C of this  Section 19,  "Tasa CPP"
shall mean the last Costo  Percentual  Promedio de Captacion for purposes of the
rate and, in its turn,  the spread of interest  on the  liabilities  in national
currency  corresponding  to loans to companies  and  individuals,  deposited for
terms (except savings), as if appropriate, bank bonds issued by the Central Bank
of Mexico that the Central Bank of Mexico publishes in the Official Diary of the
Federation  with a date  prior to when the  Borrower  fails to make its  payment
obligation that is referred to in the previous paragraph; with the understanding
that if at any time the  Central  Bank of Mexico  does not  publish  said  Costo
Porcentual  Promedio de Captacion,  then the last Costo  Porcentual  Promedio de
Captacion  published by the Central Bank of Mexico in the Official  Diary of the
Mexican Federation will be used or the index which replaces it.


         Section 20. Events of Default. Bancomer may declare an event of default
during the term of the payment of the Loan,  its principal,  ordinary  interest,
commissions,  costs  and  expenses  and  whatever  amount  is to be  paid by the
Borrower to Bancomer in accordance with this Agreement and the Promissory Notes,
without demand,  presentment,  notice of dishonor and protest, in which case all
such  amounts will be due and payable on demand if any of the  following  events
(identified in this Agreement as "Events of Default") shall occur and any curing
period  available  to  the  Borrower  to  remedy  such  Events  of  Default  has
transpired:

         A. Default by the Borrower in the payment, when due, of any installment
of principal  or interest or any  commissions  whatsoever,  costs or expenses in
connection with the Loan or the Promissory Notes, and such event is not remedied
within a term of five (5)  calendar  days as from the date any such  payment  is
due.

         B. If the  Borrower  shall  fail to comply  with any of its  respective
obligations  derived hereunder,  under the Agreement,  Promissory Notes or under
the Trust,  including  those set forth in this  Section or in Section 18 of this
Agreement  within a term of forty-five  (45) Business Days following the date on
which Bancomer notifies the Borrower of such noncompliance.

         C.  If  any  of  the  representation   and/or  warranties  of,  or  any
information  provided  to  Bancomer  by the  Borrower  under  the  terms of this
Agreement shall prove to be untrue, incorrect or incomplete.

         D. If the  Loan's  proceeds  shall  totally  or  partially  be used for
purposes  different  to  those  established  under  this  Agreement,  or if  the
Borrower's fixed assets shall be disposed in any way different to those provided
under this Agreement.

         E. If fixed assets of the Borrower, with a value equal or higher to ten
percent  (10%) of the  total  value of its  respective  fixed  assets,  shall be
condemned, seized or appropriated in full or in part by legal, administrative or
any  other  authorities,  except  for when such  seizure  or  appropriation,  in
Bancomer's  sole  judgment,  is contrary to law,  or could be  contested  by the
Borrower  in  good  faith  with   possibilities  for  success  through  rightful
procedures.

         F. If the  Borrower's  fixed  assets are not insured as provided for in
this  Agreement,  or if the Borrower fails to comply with any of its obligations
under Section 19 of this Agreement.

         G. If the Borrower  shall fail to pay without  cause any fiscal debt of
its respective business or the corresponding fees to the Mexican Social Security
Institute or the Institute for Workers National Housing  Development,  or if the
business of the  Borrower  shall be  disrupted  or shall  present  conflicts  or
conditions of any sort that in Bancomer's  reasonable  sole judgment  affect the
good performance of the business of the Borrower or put in danger its respective
economic or financial standing.

         H. If any  Event of  Default  occurs on any other  loan  authorized  by
Bancomer for the Borrower, including the Loan authorized under the Eximbank Loan
Agreement,  or if there is an Event of Default  authorized by any other creditor
to the Borrower in an amount equal to or greater to US$500,000 (U.S. Dollar Five
Hundred Dollars), or its equivalent in any other currency.

         I. If the Borrower shall pay dividends,  make a payment with respect to
the MK Rail debt,  decrease its respective capital stock,  modify its respective
corporate  purpose  or  change  its  respective  line  of  business,   file  for
dissolution or liquidation, or merge with another corporation, without the prior
written authorization of Bancomer.

         J. If there shall be instituted a judicial  procedure  for  involuntary
bankruptcy  against the Borrower or if any judicial  authority shall designate a
custodian,  under  the  applicable  provisions  of any  bankruptcy  law and such
proceeding or designation is not declared  improper within the periods which are
applicable under the respective laws or judicial procedures.

         K. If the Borrower  begins  voluntary  proceedings in order to obtain a
suspension of payments,  in accordance  with any applicable law on such matters,
or consents to institute or proceed with the  declaration  of the  suspension of
payments that would lead to any cessation of any substantial  part of its assets
for the  benefit of  creditors  or does not comply in a general  manner with any
payment of its debts or obligations,  or takes any action that would lead to any
of the above mentioned situations.

         L. If the shareholders of the Borrower, which on the date hereof owning
more than fifty  percent  (50%) of the voting  shares of the Borrower and having
the capacity to appoint the majority of the members of the Board of Directors of
the Borrower,  shall change or cease to hold direct control over the majority of
the stock with right to vote and/or would cease to have the right to appoint the
majority of the members of the Board of Directors of the Borrower, except if any
of the above causes shall occur with the prior written approval of Bancomer.

         M. If the  Borrower  shall  fail to comply to  maintain  the  Financial
Ratios  and/or the  balance in the Reserve  Fund as  provided in  paragraph S of
Section 18 hereof for a term of three (3) successive calendar months or during a
term that in total sums six (6) months during any calendar year.

         N. If  Ferrocarriles  shall early  terminate or rescind the Maintenance
Agreement, in accordance with the provisions thereof.

         O. If  deviations  with  respect to the  Investment  Program of fifteen
percent (15%) with respect to the advancement of investments  plus costs, as set
forth in the Investment  Program,  calculated on a quarterly  basis,  and if the
same are not clarified by the Borrower  within a period of fifteen (15) Business
Days  following  a  request  is made by  Bancomer  for this  purpose;  provided,
however,  that if  Ferrocarriles  shall accept these deviations for a difference
percentage then such percentage  shall be accepted by Bancomer  provided that it
should not be greater than fifteen percent (15%)."


         P. If the  Borrower  shall  incur in  indebtedness  without  the  prior
written  consent of Bancomer for (i) an amount greater than  US$1,000,000  (U.S.
Dollar One Million) in  individual  or in  aggregate,  or its  equivalent in any
other  currency,  or (ii)  terms  greater  than one (1) year,  except  for those
indebtedness  generated  by legal  mandate or during  the  normal  course of its
business transactions.

         Q. If  Ferrocarriles  shall fail to make the payments  corresponding to
the Right to Collection for more than two (2) consecutive occasions.

         R. If the  Borrower  (i) shall fail to comply with its  obligations  to
maintain the "availability  factor" in accordance with the Maintenance Agreement
or (ii) fails to comply with any other of its obligations  under the Maintenance
Agreement  for a term of  two(2)  successive  months,  in such a way that in the
opinion of the Technical  Committee,  the noncompliance could give Ferrocarriles
the right to terminate or rescind the Maintenance Agreement.

         S. If the Technical Assistance Agreement is terminated for any reason.

         T. If the Trust and/or Maintenance  Agreement shall cease to be in full
force and effect  for any reason  whatsoever  or if the  Borrower  agrees to any
amendment to or modification  of, waives any material right under, or terminates
the Maintenance  Agreement,  without the prior written authorization of Bancomer
which consent shall not be unreasonably withheld by Bancomer.

         U. If the  Borrower  does not comply with the Reserve Fund balance that
is referred to paragraph T of Section 18 of this Agreement.

         V. If the Borrower fails to give to the Trust Additional  Income within
the term established in paragraph U of Section 18, or if MK Rail does not comply
with its obligations established in the Comfort Letter within a term of five (5)
calendar days following the date on which Bancomer notifies them of its request.

         W. If the Borrower  does not pay on time the expenses that are referred
to in Section 30 of this Agreement.

         X. Under all those other cases  contemplated  in this  Agreement and by
the applicable laws.

         Y. If CIBC requires Bancomer for any reason beyond  Bancomer's  control
to pay any amount with respect to any disbursement of the Loan.

         Z. If the funding of the Line of Credit is suspended for any reason not
attributable  to Bancomer for a period greater than sixty (60) calendar days, in
which case the provisions of the first paragraph of Section 12 of this Agreement
shall also be applicable.

         AA. If the Borrower does not comply with its  obligation to immediately
increase the balance in the Reserve  Fund  referred to in Paragraph X of Section
18 of this Agreement.

         BB. If the Borrower  does not comply with its  obligation to obtain the
written  authorization  of Bancomer as provided in clause (ix) of Paragraph W of
Section 18 of this Agreement.

         CC. If  Ferrocarriles  shall make a setoff of any amount which it is to
pay under the Maintenance  Agreement  against any amount owed in its favor under
any other  obligation  of the  Borrower  apart  from  those  resulting  from the
Maintenance Agreement."


         Section 21. Trust Guaranty.  In order to guarantee the punctual payment
when due of each and every one of the  obligations  of the  Borrower  hereunder,
under the Eximbank  Loan  Agreement,  under the  Promissory  Notes and under the
Promissory  Notes executed in accordance with this Agreement,  the Eximbank Loan
Agreement,  and  especially  to guarantee  the punctual  payment when due of the
Loan, the Eximbank Loan,  its principal,  both ordinary and default  interest as
well as commissions,  costs and expenses,  and any and all other amounts payable
by the Borrower to Bancomer including court costs and expenses,  if any, and all
other legal consequences and accessories  thereon,  the Trust is incorporated by
the Borrower in accordance with which contributes the Rights for Collection,  in
order to apply such resources to the punctual payment when due of each and every
one of the obligations of the Borrower hereunder and under the Promissory Notes,
and  especially  to  guarantee  the punctual  payment when due of the Loan,  the
Eximbank  Loan,  its  principal,  both ordinary and default  interest as well as
commissions,  costs and expenses interest, and any and all other amounts payable
by the Borrower to  Bancomer,  court costs and  expenses,  if any, and all other
legal consequences and accessories thereon.

         Section 22.  Monetary Conversion.

         A. If for the  purpose  of  obtaining  a  judgment  in any  court it is
necessary  to convert  any amount of Dollars  owed under this  Agreement  or the
Promissory Notes into any other currency,  the rate of exchange to be used shall
be that which, in accordance with normal banking practices, Bancomer may acquire
Dollars with such currency on the Business Day immediately  preceding the day on
which the judgment is obtained.

         B. The payment  obligations  of the Borrower with respect to any amount
owed by the  Borrower  to  Bancomer  under  the  Loan in  accordance  with  this
Agreement  and  the  Promissory  Notes  will be  complied  with  and  satisfied,
notwithstanding  any judgment in any other currency,  only to the extent that on
the Business Day succeeding the day on which Bancomer  receives any amount which
has been  declared due and payable in any other  currency  under the  respective
judgment,  Bancomer may acquire  Dollars with such other  currency  under normal
banking practices. If the amount of Dollars acquired in this manner is less than
the amount  originally  owed to Bancomer by the Borrower in accordance with this
Agreement and the  Promissory  Notes,  the Borrower  shall be obligated to, as a
separate  obligation  independent and  irrespective  of any judgment,  indemnify
Bancomer for any loss which it may have  incurred as a result of the  Borrower's
obligations under this Agreement and the Promissory Notes.

         Section 23.  Restriction.  In accordance with the provisions of article
294 of the General Law of Securities and Credit Operations of the United Mexican
States,  the parties may agree,  that  Bancomer  may be entitled to restrict the
disbursement  period of the Loan and the  principal  amount of the Loan, or such
disbursement period of the Loan and the principal amount of the Loan at the same
time due to force majeure.


         Section 24. Successors and Assigns. The Borrower cannot seed its rights
or obligations under this Agreement or the Promissory Notes.

         Bancomer  may  at  any  time  grant  to  one or  more  banks  or  other
institutions  (each  a  "Participant")  participating  interests  in  the  Loan;
provided  however,  that  Bancomer  cannot grant  interest  participations  with
respect to the Loan (i) to any person or entity that competes in the same market
of goods or services as the Borrower, or (ii) when so prohibited by CIBC. In the
event  of  any  such  grant  by  Bancomer  of  a  participating  interest  to  a
Participant,  whether or not upon notice to the  Borrower,  (i)  Bancomer  shall
remain  responsible for negotiating,  discounting or any other form of assigning
the Promissory  Notes and will continue to act under this Agreement as holder of
the  Promissory  Notes;  (ii) the  Participant(s)  will be obliged to assume the
obligations  of  Bancomer  in  writing  that arise  from this  Agreement;  (iii)
Bancomer will remain  responsible for complying with its obligations  under this
Agreement  and the Borrower  will  continue to deal  directly with Bancomer with
respect to the rights and obligations of Bancomer under this Agreement, and (iv)
the  Borrower  will  continue to be obligated  to give  Bancomer  the  necessary
materials to review the  investment of the Funds  provided under the Loan and to
care for the authorized warranties granted by the Borrower.


         Section 25. No Waiver.  No failure on the part of Bancomer to exercise,
and no delay in exercising,  any right  hereunder or under the Promissory  Notes
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right hereunder or under the Promissory Notes, preclude any other or further
exercise thereof or the exercise of any other right.


         Section 26.  Amendments.  No amendment or waiver to any provision under
this  Agreement or under the  Promissory  Notes,  and no consent  granted to the
Borrower to divert from the terms and  conditions  of this  Agreement  or of the
Promissory  Notes,  shall  have  any  effect  unless  it is in  writing  and  is
subscribed by Bancomer and, even in such an event,  such waiver or consent shall
have  effect  only in the event and for the  specific  purpose  for which it was
granted.


         Section  27.  Notices.  For  purposes  of this  Agreement,  each of the
Parties  provides as its principle  headquarters  for the receipt of any kind of
notice, the following:

 If to Bancomer:

         Bancomer, S.A.
         Direccion Regional
         Banca Impresarial
         A.Los Torres #113
         Colonia El Paseo
         San Luis Potosi, San Luis Potosi
         MExico

         Attention:        Regional Director

         Fax #:            (48) 18-74-05

                  with a copy to:

         Bancomer, S.A.
         Direccion
         Banca Corporativa
         Proyectos e Infraestructura
         Bancomer, S.A.
         Montes Urales 470 - 2 Piso
         Lomas de Chapultepec
         11000 MExico, D.F.

         Attention:        Director
         Fax#:             226-9276

 Borrower:

         MK Gain, S.A. de C.V.
         Av. 20 de Noviembre
         No. 1200
         78030 San Luis Potosi, San Luis Potosi

         Attention:        Director of Finance
         Fax#:             (48) 12-6699


 All  notices,  requests  and  demands  shall be given in writing and (except as
otherwise  expressly  specified herein) by telegram,  telex,  facsimile or other
similar means of communication or through  certified or registered mail and must
be directed to the addresses  given above.  It is understood  that a notice will
have  been  given if it has been sent by  telegram,  telex,  facsimile  or other
similar means of communication with confirmation on the date that the notice was
sent and if it is sent by  certified  or  registered  mail on the date  that the
notice was received. Even if the parties do not notify in writing of a change in
address in accordance  with this Section,  the notices and judicial  proceedings
that are sent to the addresses indicated will be in full force and effect.


         Section 28.  Governing  Law. This  Agreement is registered  and will be
interpreted in accordance with the laws of the United Mexican States.


         Section  29.  Jurisdiction.  In  case  of any  judicial  proceeding  in
relation  to any  matter  arising  under  this  Agreement,  the  parties  hereto
irrevocably  agree that any such  matter may be adjudged  or  determined  in any
court or courts of  competent  jurisdiction  sitting  in  Mexico  City,  Federal
District,  United  Mexican  States,  or in any  court  or  courts  of  competent
jurisdiction sitting in San Luis Potosi, San Luis Potosi, United Mexican States,
and the parties hereto irrevocably  submit generally and  unconditionally to the
jurisdiction  of such  courts and of any of them in  relation  to such  matters,
expressly waiving any other jurisdiction to which they may be entitled by reason
of present or future domicile or otherwise.


         Section 30.  Costs and Expenses.

         A. The  Borrower  will pay to Bancomer  without  notice  from  Bancomer
within thirty (30) calendar days within the signing of this  Agreement up to the
amount of US$20,000.00  (Twenty  Thousand  Dollars) in respect of legal fees and
expenses  incurred by Bancomer in connection with the  negotiation,  preparation
and documentation of this Agreement and the Promissory Notes.

         B. The  Borrower  will pay to Bancomer  without  notice  from  Bancomer
within thirty (30) calendar days within the signing of this  Agreement up to the
amount of  US$3,000.00  (Three  Thousand  Dollars)  in respect of legal fees and
expenses incurred by Bancomer in connection with modification of the Trust.

         C. The  Borrower  will pay to Bancomer  without  notice  from  Bancomer
within thirty (30) calendar days within the signing of this  Agreement up to the
amount of US$35,000.00 (Thirty Five Thousand Dollars) in respect of expenses for
issuance  of the  Technical  Supervisor's  Certificate  in  accordance  with the
provisions of Sections 7 and 8 of this Agreement.

         The  Borrower  agrees that it will pay  punctually  for all the amounts
that are  discussed and the costs and expenses that are referred in this Section
on the date when they are due and payable in  accordance  with the terms of this
Section, and any amounts not paid will incur default interest from the date that
they are due up to the time  that they are paid in full on sight  including  the
default interest rate.

         Section 31.  Condition Precedent for Validity of this Agreement.

         This  Agreement  shall  have no effect  until the  Borrower  shall have
received from Bancomer written notice that (i) it has contracted for the Line of
Credit under terms and  conditions  which do not change the terms and conditions
for the Loan, or (ii) it has contracted for an alternative  line of credit which
permits  Bancomer  to extend  the Loan in terms  which are  satisfactory  to the
Borrower;  provided,  however,  that (y) if Bancomer does not deliver  either of
these  confirmations in writing no later than December 29, 1996, or the Borrower
does not accept the  confirmation  mentioned in sub clause (ii) of this Section,
then this Agreement  shall  terminate on such date,  without any requirement for
notification and with no  responsibility  for either of the parties,  and (z) if
Bancomer  confirms to  Borrower  that it has  contracted  for the Line of Credit
under terms and conditions  equal to those set forth in this Agreement,  then it
is agreed that this Agreement shall enter into effect  automatically of the date
on which Bancomer issues such confirmation.

         In witness whereof, the parties hereto have caused this Agreement to be
executed by their duly authorized  officers and  representatives  as of the date
first written above.

Bancomer:
Bancomer, S.A., Institucion de Banca Multiple,
Grupo Financiero Bancomer



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By:
Position:



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By:
Position:


The Borrower:
MK GAIN, S.A. DE C.V.




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By:
Position:



<PAGE>













                                   EXHIBIT "A"


                            FERROCARRILES' AGREEMENT





                                     <PAGE>





                                   EXHIBIT "B"


                                 COMFORT LETTER



                                     <PAGE>



                                   EXHIBIT "C"


                   FORM OF TECHNICAL SUPERVISOR'S CERTIFICATE



<PAGE>



                                   EXHIBIT "D"


                             SUBORDINATION AGREEMENT



                                     <PAGE>



                                   EXHIBIT "E"


                                      TRUST


                                     <PAGE>



                                   EXHIBIT "F"


                                FINANCIAL RATIOS


                                     <PAGE>



                                   EXHIBIT "G"


                             FORM OF PROMISSORY NOTE


                                     <PAGE>



                                   EXHIBIT "H"


                      CONSTRUCTION AND REFURBISHING PROGRAM


                                     <PAGE>


                                   EXHIBIT "I"


                             AMOUNT OF INSTALLMENTS


                                     <PAGE>



                                   EXHIBIT "J"


                   AMENDMENT TO THE FNM MAINTENANCE AGREEMENT
<PAGE>