Document:

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                                                                    EXHIBIT 10.8

WHEN RECORDED RETURN TO:
Katten Muchin Zavis Rosenman
525 W. Monroe
Chicago, Illinois 60661
Attn: Mark D. Wood Esq.

                     MORTGAGE, DEED OF TRUST, ASSIGNMENT OF
     PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING
                                   STATEMENT

                                      FROM

                           DOLPHIN ENERGY CORPORATION

                                       TO

                         __________________, AS TRUSTEE

                               FOR THE BENEFIT OF

                       PROMETHEAN ASSET MANAGEMENT L.L.C.

A CARBON, PHOTOGRAPHIC, FACSIMILE OR OTHER REPRODUCTION OF THIS INSTRUMENT IS
SUFFICIENT AS A FINANCING STATEMENT.

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT. IN CERTAIN STATES, A POWER
OF SALE MAY ALLOW THE TRUSTEE OR THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY
AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE
MORTGAGOR UNDER THIS INSTRUMENT.

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.

THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.

THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.

THIS INSTRUMENT COVERS MINERALS AND OTHER SUBSTANCES OF VALUE WHICH MAY BE
EXTRACTED FROM THE EARTH (INCLUDING WITHOUT LIMITATION OIL AND GAS) AND WHICH
WILL BE FINANCED AT THE WELLHEADS OF THE WELL OR WELLS LOCATED ON THE PROPERTIES
DESCRIBED IN EXHIBIT A HERETO. THIS FINANCING STATEMENT IS TO BE FILED OR FILED
FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF
THE COUNTY RECORDERS OF THE COUNTIES LISTED ON EXHIBIT A HERETO. THE MORTGAGOR
HAS AN INTEREST OF RECORD IN THE REAL ESTATE CONCERNED, WHICH INTEREST IS
DESCRIBED IN EXHIBIT A ATTACHED HERETO.

PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS WHICH ARE OR ARE TO BECOME AFFIXED
TO OR FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN EXHIBIT A HERETO. THIS
FINANCING STATEMENT IS TO BE FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES,
IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF EACH COUNTY IN WHICH SAID LAND
OR ANY PORTION THEREOF IS LOCATED. THE MORTGAGOR IS THE OWNER OF RECORD INTEREST
IN THE REAL ESTATE CONCERNED. THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX
OF FINANCING STATEMENTS.

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                         <C>
ARTICLE I

      Grant of Lien and Indebtedness Secured
      Section 1.01   Grant of Liens.......................................................   1
      Section 1.02   Grant of Security Interest...........................................   4
      Section 1.03   Indebtedness Secured.................................................   5
      Section 1.04   Fixture Filing, Etc..................................................   5
      Section 1.05   Defined Terms........................................................   5

ARTICLE II

      Assignment of Production, Accounts and Proceeds
      Section 2.01   Assignment...........................................................   5
      Section 2.02   Rights Under Certain Lien Statutes...................................   6
      Section 2.03   No Modification of Payment Obligations...............................   6
      Section 2.04   Effectuating Payment of Production Proceeds to Mortgagee.............   7
      Section 2.05   Application of Production Proceeds...................................   7
      Section 2.06   Release from Liability; Indemnification..............................   7

ARTICLE III

      Representations, Warranties and Covenants
      Section 3.01   Title................................................................   8
      Section 3.02   Defend Title.........................................................   8
      Section 3.03   Not a Foreign Person.................................................   9
      Section 3.04   Rentals Paid; Leases in Effect.......................................   9
      Section 3.05   Operation By Third Parties...........................................   9
      Section 3.06   Failure to Perform...................................................   9
      Section 3.07   Sale, Encumbrance or Removal.........................................   9
      Section 3.08   Sale of Production...................................................  10
      Section 3.09   Operation of Mortgaged Property......................................  10
      Section 3.10   Suits and Claims.....................................................  11
      Section 3.11   Environmental........................................................  11
      Section 3.12   Not Abandon Wells; Participate in Operations.........................  12
      Section 3.13   Condemnation Awards..................................................  13
      Section 3.14   Insurance............................................................  13
      Section 3.15   Compliance with Leases...............................................  13
      Section 3.16   Further Assurance....................................................  13
      Section 3.17   Name and Place of Business...........................................  14
      Section 3.18   Compliance with Laws and Agreements..................................  14
      Section 3.19   Inspection; Management...............................................  14

ARTICLE IV

      Rights and Remedies
      Section 4.01   Event of Default.....................................................  15
      Section 4.02   Foreclosure and Sale.................................................  15
      Section 4.03   Agents...............................................................  16
      Section 4.04   Judicial Foreclosure; Receivership...................................  16

</TABLE>

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<TABLE>
<S>                                                                                         <C>
      Section 4.05   Foreclosure for Installments.........................................  16
      Section 4.06   Separate Sales.......................................................  17
      Section 4.07   Possession of Mortgaged Property.....................................  17
      Section 4.08   Occupancy After Foreclosure..........................................  17
      Section 4.09   Remedies Cumulative, Concurrent and Nonexclusive.....................  17
      Section 4.10   No Release of Obligations............................................  18
      Section 4.11   Release of and Resort to Collateral..................................  18
      Section 4.12   Waiver of Redemption, Notice and Marshalling of Assets, Etc..........  18
      Section 4.13   Discontinuance of Proceedings........................................  18
      Section 4.14   Application of Proceeds..............................................  19
      Section 4.15   Resignation of Operator..............................................  19
      Section 4.16   Indemnity............................................................  19

ARTICLE V

      Trustee
      Section 5.01   Duties, Rights, and Powers of Trustee................................  20
      Section 5.02   Successor Trustee....................................................  20
      Section 5.03   Retention of Moneys..................................................  20

ARTICLE VI

      Miscellaneous
      Section 6.01   Instrument Construed as Mortgage, Etc................................  21
      Section 6.02   Release of Mortgage..................................................  21
      Section 6.03   Severability.........................................................  21
      Section 6.04   Successors and Assigns of Parties....................................  21
      Section 6.05   Satisfaction of Prior Encumbrance....................................  21
      Section 6.06   Subrogation of Trustee...............................................  21
      Section 6.07   Nature of Covenants..................................................  22
      Section 6.08   Notices..............................................................  22
      Section 6.09   Counterparts.........................................................  22
      Section 6.10   Effective as a Financing Statement...................................  22
      Section 6.11   No Impairment of Security............................................  22
      Section 6.12   Acts Not Constituting Waiver.........................................  22
      Section 6.13   Mortgagor's Successors...............................................  23
      Section 6.14   Certain Consents.....................................................  23
      Section 6.15   Governing Law........................................................  23
      Section 6.16   Exculpation Provisions...............................................  23
      Section 6.17   FINAL AGREEMENT......................................................  24
      Section 6.18   Prior Mortgages......................................................  24
</TABLE>

                                       ii

<PAGE>

                     MORTGAGE, DEED OF TRUST, ASSIGNMENT OF
          PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING
                                   STATEMENT

      This MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY
AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (this "Mortgage") is entered
into as of the effective time and date hereinafter stated (the "Effective Date")
by DOLPHIN ENERGY CORPORATION, a Nevada corporation, 1331 - 17th Street, Suite
730, Denver, Colorado 80202 ("Mortgagor"), to _________________, as Trustee,
whose address for notice is _____________________________________ ("Trustee")
for the benefit of PROMETHEAN ASSET MANAGEMENT L.L.C., a Delaware limited
liability company, 750 Lexington, 22nd Floor, New York, New York 10022, on its
own behalf and in its capacity as collateral agent (the "Collateral Agent") for
the benefit of the holders of the Notes (as defined below) ("Mortgagee").

                                R E C I T A L S:

      A.    Pursuant to that certain Securities Purchase Agreement dated as of
August 19, 2004 (as amended, restated, supplemented or otherwise modified from
time to time, the "Purchase Agreement"), between Galaxy Energy Corporation, a
Colorado corporation ("Galaxy") and the investors listed on the Schedule of
Buyers thereto, each of which is a holder of a Note (as defined below) (together
with their respective successors and assigns, the "Holders"), each initial
Holder made loans and certain other financial accommodations (collectively, the
"Loans") to Galaxy, as evidenced by those certain Senior Secured Convertible
Notes, dated as of August 19, 2004, made by Galaxy payable to each applicable
Holder in the original aggregate principal amount of up to $20,000,000 (such
notes, together with any promissory notes or other securities issued in exchange
or substitution therefor or replacement thereof, and as any of the same may be
amended, restated, modified or supplemented and in effect from time to time,
being herein referred to as the "Notes").

      B.    Mortgagor has executed and delivered to Mortgagee that certain
Guaranty dated as of the date hereof as amended, restated, supplemented or
otherwise modified from time to time, the "Guaranty"), pursuant to which
Mortgagor has guaranteed all of the "Obligations" under (and as defined in) the
Guaranty.

      C.    Mortgagor has agreed that all of the Indebtedness (as defined in
Section 1.03 hereof) is intended to be secured in part by this Mortgage and
recorded in those jurisdictions as set forth on, Schedule 1 of this Mortgage.

      D.    Each Holder has conditioned its obligation to make the Loans upon
the execution and delivery by Mortgagor of this Mortgage, and Mortgagor has
agreed to enter into this Mortgage.

      THEREFORE, in order to comply with the terms and conditions of the
Purchase Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Mortgagor hereby agrees with
Mortgagee as follows:

                                   ARTICLE I
                     Grant of Lien and Indebtedness Secured

      Section 1.01 Grant of Liens. To secure payment of the Indebtedness (as
defined in Section 1.03) and the performance of the covenants and obligations
herein contained, Mortgagor does by these presents hereby GRANT, BARGAIN, SELL,
ASSIGN, MORTGAGE, PLEDGE, HYPOTHECATE,

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TRANSFER and CONVEY unto Trustee and Trustee's successors and substitutes in
trust hereunder, WITH A POWER OF SALE, for the use and benefit of Mortgagee, the
real and personal property, rights, titles, interests and estates described in
the following paragraphs (a) through (g) (collectively called the "Mortgaged
Property"):

      (a)   All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to the oil and gas leases and/or oil, gas and other
mineral leases, other mineral properties, mineral servitudes and/or mineral
rights, "as extracted collateral" (as defined in the Applicable UCC) and other
interests and estates and the lands and premises covered or affected thereby
which are described on Exhibit A hereto without regard to any limitations as to
specific lands or depths that may be set forth in Exhibit A (collectively called
the "Hydrocarbon Property") or which Hydrocarbon Property is otherwise referred
to herein, and specifically, but without limitation, the undivided interests of
Mortgagor which are more particularly described on attached Exhibit A.

      (b)   All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to (i) the properties now or hereafter pooled or
unitized with any Hydrocarbon Property; (ii) all presently existing or future
unitization, communitization, pooling agreements and designations, orders or
declarations of pooled units and the units created thereby (including, without
limitation, all units created under orders, regulations, rules or other official
acts of any Federal, State or other governmental body or agency having
jurisdiction and any units created solely among working interest owners pursuant
to operating agreements or otherwise) which may affect all or any portion of the
Hydrocarbon Property including, without limitation, those units which may be
described or referred to on attached Exhibit A; (iii) all operating agreements,
production sales or other contracts, processing agreements, transportation
agreements, gas balancing agreements, farmout agreements, farm-in agreements,
salt water disposal agreements, area of mutual interest agreements, equipment
leases and other agreements described or referred to in this Mortgage or which
relate to any of the Hydrocarbon Property or interests in the Hydrocarbon
Property described or referred to herein or on attached Exhibit A or to the
production, sale, purchase, exchange, processing, handling, storage,
transporting or marketing of the Hydrocarbons (as defined in Section 1.01(c)
hereof) from or attributable to such Hydrocarbon Property or interests; (iv) all
geological, geophysical, engineering, accounting, title, legal, and other
technical or business data concerning the Mortgaged Property, the Hydrocarbons,
or any other item of Property which are in the possession of Mortgagor or in
which Mortgagor can otherwise grant a security interest, and all books, files,
records, magnetic media, computer records, and other forms of recording or
obtaining access to such data; and (v) the Hydrocarbon Property described on
attached Exhibit A and covered by this Mortgage even though Mortgagor's
interests therein be incorrectly described or a description of a part or all of
such Hydrocarbon Property or Mortgagor's interests therein be omitted; it being
intended by Mortgagor and Mortgagee herein to cover and affect hereby all
interests which Mortgagor may now own or may hereafter acquire in and to the
Hydrocarbon Property notwithstanding that the interests as specified on Exhibit
A may be limited to particular lands, specified depths or particular types of
property interests.

      (c)   All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to all oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
therefrom and all other minerals (collectively called the "Hydrocarbons") in and
under and which may be produced and saved from or attributable to the
Hydrocarbon Property, the lands pooled or unitized therewith and Mortgagor's
interests therein, including all oil in tanks and all rents, issues, profits,
proceeds, products, revenues and other income from or attributable to the
Hydrocarbons, the Hydrocarbon Property, the lands pooled or unitized therewith
and Mortgagor's interests therein.

      (d)   All tenements, hereditaments, appurtenances and properties in
anywise appertaining, belonging, affixed or incidental to the Hydrocarbon
Property, rights, titles, interests and estates described

                                       2
<PAGE>

or referred to in paragraphs (a) and (b) above, which are now owned or which may
hereafter be acquired by Mortgagor, including, without limitation, any and all
property, real or personal, now owned or hereafter acquired and situated upon,
used, held for use, or useful in connection with the operating, working,
extraction, treatment, marketing, gathering, transmission or development of any
of such Hydrocarbon Property or the lands pooled or unitized therewith
(excluding drilling rigs, trucks, automotive equipment or other personal
property which may be taken to the premises for the purpose of drilling a well
or for other similar temporary uses) and including any and all oil wells, gas
wells, injection wells or other wells, buildings, structures, field separators,
liquid extraction plants, plant compressors, pumps, pumping units, pipelines,
sales and flow lines, gathering systems, field gathering systems, salt water
disposal facilities, tanks and tank batteries, fixtures, valves, fittings,
machinery and parts, engines, boilers, meters, apparatus, goods, inventory,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements, servitudes, licenses and
other surface and subsurface rights together with all additions, substitutions,
replacements, accessions and attachments to any and all of the foregoing
properties.

      (e)   Any property that may from time to time hereafter, by delivery or by
writing of any kind, be subjected to the lien and security interest hereof by
Mortgagor or by anyone on Mortgagor's behalf; and Trustee or Mortgagee is hereby
authorized to receive the same at any time as additional security hereunder.

      (f)   All of the rights, titles and interests of every nature whatsoever
now owned or hereafter acquired by Mortgagor in and to the Hydrocarbon Property
rights, titles, interests and estates and every part and parcel thereof,
including, without limitation, the Hydrocarbon Property rights, titles,
interests and estates as the same may be enlarged by the discharge of any
payments out of production or by the removal of any charges or Permitted
Encumbrances (as hereinafter defined in Section 3.01) to which any of the
Hydrocarbon Property rights, titles, interests or estates are subject, or
otherwise; all rights of Mortgagor to liens and security interests securing
payment of proceeds from the sale of production from the Mortgaged Property,
including, but not limited to, those liens and security interests provided in
Section 9.319 of the Applicable UCC (as defined in Section 1.02), as amended
from time to time, any other statute enacted in the jurisdiction in which the
Hydrocarbon Property is located or statute made applicable to the Hydrocarbon
Property under federal law (or some combination of federal and state law);
together with any and all renewals and extensions of any of the Hydrocarbon
Property rights, titles, interests or estates; all contracts and agreements
supplemental to or amendatory of or in substitution for the contracts and
agreements described or mentioned above; and any and all additional interests of
any kind hereafter acquired by Mortgagor in and to the Hydrocarbon Property
rights, titles, interests or estates.

      (g)   All accounts, contract rights, inventory, choses in action (i.e.,
rights to enforce contracts or to bring claims thereunder), commercial tort
claims, general intangibles, insurance contracts and insurance proceeds
(regardless of whether the same arose, and/or the events which gave rise to the
same occurred, on or before or after the date hereof) and all proceeds and
products of all such portions of the Hydrocarbon Property and payments in lieu
of production, whether such proceeds or payments are goods, money, documents,
instruments, chattel paper, securities, accounts, general intangibles, fixtures,
real property, or other assets and regardless of whether such payments accrued,
and/or the events which gave rise to such payments occurred, on or before or
after the date hereof, including, without limitation, "take or pay" payments and
similar payments, payments received in settlement of or pursuant to a judgment
rendered with respect to take or pay or similar obligations or other obligations
under a production sales contract, payments received in buyout or buydown or
other settlement of a production sales contract, and payments received under a
gas balancing or similar agreement as a result of (or received otherwise in
settlement of or pursuant to judgment rendered with respect to) rights held by
Mortgagor as a result of Mortgagor (and/or its predecessors in title) taking or
having taken less gas from lands covered by a

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<PAGE>

Hydrocarbon Property (or lands pooled or unitized therewith) than its ownership
of such Hydrocarbon Property would entitle it to receive.

      (h)   Without limitation of the generality of the foregoing, any rights
and interests of Mortgagor under any present or future hedge or swap agreements,
cap, floor, collar, exchange, forward or other hedge or protection agreements or
transactions relating to crude oil, natural gas or other Hydrocarbons, or any
option with respect to any such agreement or transaction now existing or
hereafter entered into by or on behalf of Mortgagor.

      (i)   All licenses, permits and other regulatory approvals held by
Mortgagor relating to the Mortgaged Property.

      (j)   All proceeds of all of the rights, titles and interests of Mortgagor
described in the foregoing paragraphs (a) through (i) whether such proceeds or
payments are goods, money, documents, instruments, chattel paper, securities,
accounts, payment intangibles, general intangibles, fixtures, real/immovable
property, personal/movable property or other assets.

      Any fractions or percentages specified on attached Exhibit A in referring
to Mortgagor's interests are solely for purposes of the warranties made by
Mortgagor pursuant to Sections 3.01 and 3.05 hereof and shall in no manner limit
the quantum of interest affected by this Section 1.01 with respect to any
Hydrocarbon Property or with respect to any unit or well identified on said
Exhibit A.

      TO HAVE AND TO HOLD the Mortgaged Property unto Trustee and to his
successors and assigns forever to secure the payment of the Indebtedness and to
secure the performance of the covenants, agreements, and obligations of
Mortgagor herein contained.

      Section 1.02 Grant of Security Interest. To further secure the
Indebtedness, Mortgagor hereby grants to Mortgagee a security interest in and to
the Mortgaged Property (whether now or hereafter acquired by operation of law or
otherwise) insofar as the Mortgaged Property consists of equipment, accounts,
contract rights, general intangibles, insurance contracts, insurance proceeds,
inventory, Hydrocarbons, fixtures and any and all other personal property of any
kind or character defined in and subject to the provisions of the Uniform
Commercial Code presently in effect in the jurisdiction in which the Mortgaged
Property is situated ("Applicable UCC"), including the proceeds and products
from any and all of such personal property. Upon the happening of any of the
Events of Default (as defined in Section 4.01), Mortgagee is and shall be
entitled to all of the rights, powers and remedies afforded a secured party by
the Applicable UCC with reference to the personal property and fixtures in which
Mortgagee has been granted a security interest herein, or Trustee or Mortgagee
may proceed as to both the real and personal property covered hereby in
accordance with the rights and remedies granted under this Mortgage in respect
of the real property covered hereby. Such rights, powers and remedies shall be
cumulative and in addition to those granted to Trustee or Mortgagee under any
other provision of this Mortgage or under any other security instrument. Written
notice mailed to Mortgagor as provided herein at least five (5) Business Days
(as defined in the Note) prior to the date of public sale of any part of the
Mortgaged Property which is personal property subject to the provisions of the
Applicable UCC, or prior to the date after which private sale of any such part
of the Mortgaged Property will be made, shall constitute reasonable notice.
Except as otherwise expressly provided in this Mortgage, all terms in this
Mortgage relating to the Mortgaged Property and the grant of the foregoing
security interest which are defined in the Applicable UCC shall have the
meanings assigned to them in Article 9 (or, absent definition in Article 9, in
any other Article) of the Applicable UCC, as those meanings may be amended,
revised or replaced from time to time. Notwithstanding the foregoing, the
parties intend that the terms

                                       4
<PAGE>

used herein which are defined in the Applicable UCC have, at all times, the
broadest and most inclusive meanings possible.

      Section 1.03 Indebtedness Secured. This Mortgage is executed and delivered
by Mortgagor to secure and enforce the following (the "Indebtedness"):

      (a)   Payment of and performance of any and all indebtedness, obligations
and liabilities of Mortgagor pursuant to the Guaranty including the
"Obligations" under and as defined in such Guaranty.

      (b)   Payment of and performance of any and all other indebtedness,
obligations and liabilities of Mortgagor, Galaxy and any direct or indirect
subsidiary of Galaxy (collectively, the "Galaxy Parties") pursuant to the
Purchase Agreement, the Notes, the Warrants, the Registration Rights Agreement,
the Guaranty, the other Security Documents (as defined in the Note) and all of
the other documents and instruments contemplated thereby and executed in
connection therewith including (collectively, the "Loan Documents"), including,
without limitation, (i) principal and interest (including without limitation,
interest accruing subsequent to the filing of a petition or other action
concerning bankruptcy or other similar proceeding) on the Notes, (ii)
reimbursement obligations under any letters of credit, (iii) obligations under
any hedging agreements with any Holder or their respective affiliates, and (iv)
obligations owing under any other Loan Document; and all renewals, extensions,
rearrangements and/or other modifications of any of the foregoing.

      (c)   Any sums which may be advanced or paid by Mortgagee, Trustee or any
Holder under the terms hereof or under any other Loan Document on account of the
failure of Mortgagor or any other Galaxy Party to comply with the covenants
contained herein or in any other Loan Document; and all other indebtedness of
Galaxy Parties arising pursuant to the provisions of the Loan Documents, this
Mortgage and any other documents or instruments executed in connection
therewith.

      (d)   Without limiting the generality of the foregoing, all post-petition
interest, expenses and other duties and liabilities with respect to indebtedness
or other obligations described above in this Section 1.03, which would be owed
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding.

      Section 1.04 Fixture Filing, Etc. Without in any manner limiting the
generality of any of the other provisions of this Mortgage: (i) some portions of
the goods described or to which reference is made herein are or are to become
fixtures on the land described or to which reference is made herein or on
attached Exhibit A; (ii) the security interests created hereby under applicable
provisions of the Applicable UCC will attach to Hydrocarbons (minerals including
oil and gas), as extracted collateral or the accounts resulting from the sale
thereof at the wellhead or minehead located on the land described or to which
reference is made herein; (iii) this Mortgage is to be filed of record in the
real estate records as a financing statement, and (iv) Mortgagor is the record
owner of the real estate or interests in the real estate comprised of the
Mortgaged Property.

      Section 1.05 Defined Terms. Any capitalized term used in this Mortgage and
not defined in this Mortgage shall have the meaning assigned to such term in the
Purchase Agreement.

                                   ARTICLE II
                 Assignment of Production, Accounts and Proceeds

      Section 2.01 Assignment. Mortgagor has absolutely and unconditionally
assigned, transferred, and conveyed, and does hereby absolutely and
unconditionally assign, transfer and convey

                                       5
<PAGE>

unto Mortgagee, its successors and assigns, all of the Hydrocarbons and all
products obtained or processed therefrom, and the revenues and proceeds now and
hereafter attributable to the Hydrocarbons and said products and all accounts
arising therefrom or in connection therewith and all payments in lieu of the
Hydrocarbons such as "take or pay" payments or settlements (the "Production
Proceeds"), together with the immediate and continuing right to collect and
receive such Production Proceeds. The Hydrocarbons and products are to be
delivered into pipe lines connected with the Mortgaged Property, or to the
purchaser thereof, to the credit of Mortgagee, free and clear of all taxes,
charges, costs, and expenses; and all such Production Proceeds shall be paid
directly to a Deposit Account subject to a Bank Agency Agreement (in each case,
as defined in that certain Security Agreement of even date herewith), with no
duty or obligation of any party paying the same to inquire into the rights of
Mortgagee to receive the same, what application is made thereof, or as to any
other matter. Mortgagor directs and instructs any and all purchasers of any
Hydrocarbons to pay to such Deposit Accounts all of the Production Proceeds
accruing to Mortgagor's interest until such time as such purchasers have been
furnished with evidence that all Indebtedness has been paid and that this
Mortgage has been released. Mortgagor agrees that no purchasers of the
Hydrocarbons shall have any responsibility for the application of any funds paid
to Mortgagee. Mortgagor agrees to perform all such acts, and to execute all such
further assignments, transfer orders and division orders, and other instruments
as may be required or desired by Mortgagee or any party in order to have the
Production Proceeds paid to Mortgagee. Upon the occurrence of an Event of
Default, Mortgagee is fully authorized to receive and receipt for the Production
Proceeds; to endorse and cash any and all checks and drafts payable to the order
of Mortgagor or Mortgagee for the account of Mortgagor received from or in
connection with the Production Proceeds and to hold the Production Proceeds in a
bank account as additional collateral securing the Indebtedness; and to execute
transfer and division orders in the name of Mortgagor, or otherwise, with
warranties binding Mortgagor. All Production Proceeds received by Mortgagee
pursuant to this assignment shall be applied as provided in the other Loan
Documents. Mortgagee shall not be liable for any delay, neglect or failure to
effect collection of any Production Proceeds or to take any other action in
connection therewith or hereunder; but Mortgagee shall have the right, at its
election, in the name of Mortgagor or otherwise, to prosecute and defend any and
all actions or legal proceedings deemed advisable by Mortgagee in order to
collect such funds and to protect the interests of Mortgagee, and/or Mortgagor,
with all costs, expenses and attorneys' fees incurred in connection therewith
being paid by Mortgagor and until so paid being a part of the Indebtedness
secured by this Mortgage. Mortgagor hereby appoints Mortgagee as its
attorney-in-fact to pursue any and all rights of Mortgagor to liens on and
security interests in the Hydrocarbons securing payment of proceeds of runs
attributable to the Hydrocarbons. In addition to the rights granted to Trustee
and/or Mortgagee in Section 1.01 (f) of this Mortgage, Mortgagor hereby further
transfers and assigns to Mortgagee any and all such liens, security interests,
financing statements or similar interests of Mortgagor attributable to its
interest in the Hydrocarbons and proceeds of runs therefrom arising under or
created by any statutory provision, judicial decision or otherwise. The power of
attorney granted to Mortgagee in this Section 2.01, being coupled with an
interest, shall be irrevocable so long as the Indebtedness or any part thereof
remains unpaid.

      Section 2.02 Rights Under Certain Lien Statutes. Mortgagor hereby grants,
sells, assigns, sets over and mortgages unto Trustee, during the term hereof,
all of Mortgagor's rights and interests pursuant to the provisions of Section
9.319 of the Applicable UCC, of the Oil and Gas Owners Lien Act, 52 O.S. Section
548.2 and of any similar state or local jurisdiction statute in any state
wherein the Mortgaged Property is located, hereby vesting in Trustee all of
Mortgagor's rights as an interest owner to the continuing security interest in
and liens upon the Mortgaged Property.

      Section 2.03 No Modification of Payment Obligations. Nothing herein
contained shall modify or otherwise alter, limit or modify the absolute
obligation of Mortgagor and the other Galaxy Parties to make prompt payment of
all principal and interest owing on the Indebtedness when and as the same

                                       6
<PAGE>

become due regardless of whether the Production Proceeds are sufficient to pay
the same and the rights provided in accordance with the foregoing assignment
provision shall be cumulative of all other security of any and every character
now or hereafter existing to secure payment of the Indebtedness.

      Section 2.04 Effectuating Payment of Production Proceeds to Mortgagee. If
under any existing sales agreements, other than division orders or transfer
orders, any Production Proceeds are required to be paid by the purchaser to
Mortgagor so that under such existing agreements payment cannot be made of such
Production Proceeds to Mortgagee, Mortgagor's interest in all Production
Proceeds under such sales agreements and in all other Production Proceeds which
for any reason may be paid to Mortgagor shall, when received by Mortgagor,
constitute trust funds in Mortgagor's hands and shall be immediately paid over
to Mortgagee. Without limitation upon any of the foregoing, Mortgagor hereby
constitutes and appoints Mortgagee as Mortgagor's special attorney-in-fact (with
full power of substitution, either generally or for such periods or purposes as
Mortgagee may from time to time prescribe) in the name, place and stead of
Mortgagor to do any and every act and exercise any and every power that
Mortgagor might or could do or exercise personally with respect to all
Hydrocarbons and Production Proceeds expressly inclusive, but not limited to,
giving and granting unto said attorney-in-fact full power and authority to do
and perform any and every act and thing whatsoever necessary and requisite to be
done as fully and to all intents and purposes, as Mortgagor might or could do if
personally present; and Mortgagor shall be bound thereby as fully and
effectively as if Mortgagor had personally executed, acknowledged and delivered
any of the foregoing certificates or documents. The powers and authorities
herein conferred upon Mortgagee may be exercised by Mortgagee through any person
who, at the time of the execution of the particular instrument, is an officer of
Mortgagee. The power of attorney herein conferred is granted for valuable
consideration and hence is coupled with an interest and is irrevocable so long
as the Indebtedness, or any part thereof, shall remain unpaid. All persons
dealing with Mortgagee or any substitute shall be fully protected in treating
the powers and authorities conferred by this paragraph as continuing in full
force and effect until advised by Mortgagee that all the Indebtedness is fully
and totally paid. Mortgagee may, but shall not be obligated to, take such action
as it deems appropriate in an effort to collect the Production Proceeds and any
reasonable expenses (including reasonable attorney's fees) so incurred by
Mortgagee shall be a demand obligation of Mortgagor and shall be part of the
Indebtedness, and shall bear interest each day, from the date of such
expenditure or payment until paid, at the rate described the Note plus 2% per
annum.

      Section 2.05 Application of Production Proceeds. The Production Proceeds
received by Mortgagee during each calendar month shall be paid deposited into a
Deposit Account in accordance with Section 2.01 hereof. After an Event of
Default hereunder has occurred, all Production Proceeds from time to time in the
hands of Mortgagee shall be applied to the payment of the Indebtedness at such
times and in such manner and order as Mortgagee determines in Mortgagee's sole
and absolute discretion.

      Section 2.06 Release from Liability; Indemnification. Mortgagee and its
successors and assigns are hereby released and absolved from all liability for
failure to enforce collection of the Production Proceeds and from all other
responsibility in connection therewith, except the responsibility to account to
Mortgagor for funds actually received. Mortgagor agrees to indemnify and hold
harmless Mortgagee (for purposes of this paragraph, the term "Mortgagee" shall
include the directors, officers, partners, employees and agents of Mortgagee and
any persons or entities owned or controlled by or affiliated with Mortgagee and
any other Indemnified Party as defined in Section 4.16 hereof) from and against
all claims, demands, liabilities, losses, damages (including without limitation
consequential damages), causes of action, judgments, penalties, costs and
expenses (including without limitation reasonable attorneys' fees and expenses)
imposed upon, asserted against or incurred or paid by Mortgagee by reason of the
assertion that Mortgagee received, either before or after payment in full of the
Indebtedness, funds from the production of oil, gas, other hydrocarbons or other
minerals claimed by third

                                       7
<PAGE>

persons (and/or funds attributable to sales of production which were made in
violation of laws, rules, regulations and/or orders governing such sales), and
Mortgagee shall have the right to defend against any such claims or actions,
employing attorneys of its own selection, and if not furnished with indemnity
satisfactory to it, Mortgagee shall have the right to compromise and adjust any
such claims, actions and judgments, and in addition to the rights to be
indemnified as herein provided, all amounts paid by Mortgagee in compromise,
satisfaction or discharge of any such claim, action or judgment, and all court
costs, reasonable attorneys' fees and other expenses of every character expended
by Mortgagee pursuant to the provisions of this section shall be a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to Mortgagee and shall bear interest, from the date expended until
paid, at the interest rate described in the Note plus 2%. The foregoing
indemnities shall not terminate upon the release, foreclosure or other
termination of this Mortgage but will survive the release, foreclosure of this
Mortgage or conveyance in lieu of foreclosure, and the repayment of the
Indebtedness and the discharge and release of this Mortgage and the other
documents evidencing and/or securing the Indebtedness. WITHOUT LIMITATION, IT IS
THE INTENTION OF MORTGAGOR AND MORTGAGOR AGREES THAT THE FOREGOING RELEASES AND
INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO ALL CLAIMS,
DEMANDS, LIABILITIES, LOSSES, DAMAGES (INCLUDING WITHOUT LIMITATION
CONSEQUENTIAL DAMAGES), CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND
EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES AND EXPENSES)
WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
(AND/OR ANY OTHER) INDEMNIFIED PARTY. However, such indemnities shall not apply
to any particular indemnified party (but shall apply to the other indemnified
parties) to the extent the subject of the indemnification is caused by or arises
out of the gross negligence or willful misconduct of such particular indemnified
party.

                                  ARTICLE III
                    Representations, Warranties and Covenants

      Mortgagor hereby represents, warrants and covenants as follows:

      Section 3.01 Title. Mortgagor owns an undivided working interest in each
Mortgaged Property of not more than the working interest set forth in Exhibit A
attached hereto (to the extent the interest of Mortgagor is a working interest
as opposed to a royalty interest) and Mortgagor owns an undivided net revenue
interest or royalty interest in each Mortgaged Property of not less than the net
revenue or royalty interest set forth in Exhibit A attached hereto. Mortgagor
has defensible title to each Mortgaged Property except for: (i) the contracts,
agreements, burdens, encumbrances and other matters set forth in the
descriptions of the Mortgaged Property on Exhibit A hereto, (ii) the liens and
security interests evidenced by this Mortgage, (iii) statutory liens for taxes
which are not yet delinquent, (iv) liens under operating agreements, pooling
orders and unitization agreements, and mechanics' and materialmen's liens, with
respect to obligations which are not yet due, (v) statutory liens related to the
purchase of crude oil in the ordinary course of business, (vi) statutory liens
or privileges with respect to obligations not yet due, and (vii) other liens and
security interests (if any) in favor of Mortgagee (collectively, the "Permitted
Encumbrances").

      Section 3.02 Defend Title. This Mortgage is, and always will be kept, a
direct first lien and security interest upon the Mortgaged Property subject only
to the Permitted Encumbrances and Mortgagor will not create or suffer to be
created or permit to exist any lien, security interest or charge prior or junior
to or on a parity with the lien and security interest of this Mortgage upon the
Mortgaged Property or any part thereof or upon the rents, issues, revenues,
profits and other income therefrom. Mortgagor will

                                       8
<PAGE>

warrant and defend the title to the Mortgaged Property against the claims and
demands of all other persons whomsoever and will maintain and preserve the lien
created hereby so long as any of the Indebtedness secured hereby remains unpaid.
Should an adverse claim be made against or a cloud develop upon the title to any
part of the Mortgaged Property, Mortgagor agrees it will immediately defend
against such adverse claim or take appropriate action to remove such cloud at
Mortgagor's cost and expense, and Mortgagor further agrees that Trustee and/or
Mortgagee may take such other action as they deem advisable to protect and
preserve their interests in the Mortgaged Property, and in such event Mortgagor
will indemnify Trustee and Mortgagee against any and all cost, attorney's fees
and other expenses which they may incur in defending against any such adverse
claim or taking action to remove any such cloud.

      Section 3.03 Not a Foreign Person. Mortgagor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended (hereinafter
called the "Code"), Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident
alien, foreign corporation, foreign partnership, foreign trust or foreign estate
as those terms are defined in the Code and any regulations promulgated
thereunder).

      Section 3.04 Rentals, Taxes, Insurance and Fees Paid; Leases in Effect.
All rentals and royalties due and payable in accordance with the terms of any
leases or subleases comprising a part of the Hydrocarbon Property and all
severance and production taxes payable with respect to the production therefrom
have been duly paid or provided for and all leases or subleases comprising a
part of the Hydrocarbon Property are in full force and effect. In addition to
the foregoing, Mortgagee shall or shall cause to be paid when due, all taxes,
permits, licenses, insurance premiums and other similar amounts with respect to
the Mortgaged Property, the Hydrocarbon Property and the Hydrocarbons.

      Section 3.05 Operation By Third Parties. As to any part of the Mortgaged
Property which is not a working interest (if any), Mortgagor agrees to take all
such action and to exercise all rights and remedies as are available to
Mortgagor to cause the owner or owners of the working interest in such
properties to comply with the covenants and agreements contained herein; and as
to any part of the Mortgaged Property which is a working interest but which is
operated by a party other than Mortgagor, Mortgagor agrees to take all such
action and to exercise all rights and remedies as are reasonably available to
Mortgagor (including, but not limited to, all rights under any operating
agreement) to cause the party who is the operator of such property to comply
with the covenants and agreements contained herein.

      Section 3.06 Failure to Perform. Mortgagor agrees that if Mortgagor fails
to perform any act or to take any action which Mortgagor is required to perform
or take hereunder or pay any money which Mortgagor is required to pay hereunder,
each of Mortgagee and Trustee in Mortgagor's name or its or their own name may,
but shall not be obligated to, perform or cause to be performed such act or take
such action or pay such money, and any expenses so incurred by either of them
and any money so paid by either of them shall be a demand obligation owing by
Mortgagor to Mortgagee or Trustee, as the case may be, and each of Mortgagee and
Trustee, upon making such payment, shall be subrogated to all of the rights of
the Person receiving such payment. Each amount due and owing by Mortgagor to
each of Mortgagee and Trustee pursuant to this Mortgage shall bear interest from
the date of such expenditure or payment or other occurrence which gives rise to
such amount being owed to such Person until paid at the Post-Default Rate, and
all such amounts together with such interest thereon shall be a part of the
Indebtedness described in Section 1.03 hereof.

      Section 3.07 Sale, Encumbrance or Removal. Mortgagor will not at any time
during the existence hereof, sell, assign, transfer, mortgage, encumber, or
otherwise dispose of any Mortgaged Property, except (i) sales of Hydrocarbons in
the ordinary course of business and only then in compliance

                                       9
<PAGE>

with the terms of this Mortgage or (ii) the sale of obsolete or worn out
equipment or personal property, or Mortgagor shall not remove or permit to be
removed, any personal or other removable property at any time covered hereby
from the premises upon which the same may be situated unless moved to other
portion of the Mortgaged Property or is replaced with property of equal value
and which Lender has a first priority perfected security interest in.

      Section 3.08 Sale of Production. No Mortgaged Property is or will become
subject to any contractual or other arrangement (a) whereby payment for
production is or can be deferred for a substantial period after the month in
which such production is delivered (i.e., in the case of oil, not in excess of
sixty (60) days, and in the case of gas, not in excess of ninety (90) days) or
(b) whereby payments are made to Mortgagor other than by checks, drafts, wire
transfer advises or other similar writings, instruments or communications for
the immediate payment of money. Except for transportation agreements (or other
agreements relating to the marketing of Hydrocarbons) from time to time
disclosed to Mortgagee in writing (in connection with the Mortgaged Property to
which they relate), (i) no Mortgaged Property is or will become subject to any
contractual or other arrangement for the sale, processing or transportation of
production (or otherwise related to the marketing of Hydrocarbons) which cannot
be cancelled on ninety (90) days' (or less) notice and (ii) all contractual or
other arrangements for the sale, processing or transportation of Hydrocarbons
(or otherwise related to the marketing of Hydrocarbons) shall be bona fide arm's
length transactions with third parties not affiliated with Mortgagor and shall
be generally prevailing market prices. Mortgagor is presently receiving a price
for all production from (or attributable to) each Mortgaged Property covered by
a production sales contract disclosed in writing to Mortgagee as computed in
accordance with the terms of such contract, and is not having deliveries of
production from such Mortgaged Property curtailed substantially below such
property's delivery capacity. Neither Mortgagor, nor any of its predecessors in
title, has received prepayments (including, but not limited to, payments for gas
not taken pursuant to "take or pay" or other similar arrangements) for any
Hydrocarbons produced or to be produced from the Mortgaged Properties after the
date hereof, and Mortgagor hereby covenants not to enter into any such advance
or prepayment arrangements whereby it accepts consideration for Hydrocarbons not
yet produced. No Mortgaged Property is or will become subject to any "take or
pay" or other similar arrangement (y) which can be satisfied in whole or in part
by the production or transportation of gas from other properties or (z) as a
result of which production from the Mortgaged Properties may be required to be
delivered to one or more third parties without payment (or without full payment)
therefor as a result of payments made, or other actions taken, with respect to
other properties. There is no Mortgaged Property with respect to which
Mortgagor, or its predecessors in title, has, prior to the date hereof, taken
more ("overproduced"), or less ("underproduced"), gas from the lands covered
thereby (or pooled or unitized therewith) than its ownership interest in such
Mortgaged Property would entitle it to take. Mortgagor will not after the date
hereof become "overproduced" (as above defined) with respect to any well on the
Mortgaged Property (or on any unit in which the Mortgaged Property participate),
in an amount in excess of Mortgagor's share of gas produced from such well
during the preceding four calendar months. No Mortgaged Property is or will
become subject to a gas balancing arrangement under which one or more third
parties may take a portion of the production attributable to such Mortgaged
Property without payment (or without full payment) therefor as a result of
production having been taken from, or as a result of other actions or inactions
with respect to, other properties. No Mortgaged Property is subject at the
present time to any regulatory refund obligation and, to the best of Mortgagor's
knowledge, no facts exist which might cause the same to be imposed.

      Section 3.09 Operation of Mortgaged Property. Each Mortgaged Property (and
properties unitized therewith) is being (and, to the extent the same could
adversely affect the ownership or operation of such Mortgaged Property after the
date hereof, have in the past been), and hereafter will be, maintained, operated
and developed in a good and workmanlike manner, in accordance with prudent

                                       10
<PAGE>

industry standards and in conformity with all applicable laws and all rules,
regulations and orders of all duly constituted authorities having jurisdiction
and in substantial conformity with all oil, gas and/or other mineral leases and
other contracts and agreements forming a part of the Mortgaged Property and in
conformity with the Permitted Encumbrances; specifically in this connection, (i)
no Mortgaged Property is subject to having allowable production after the date
hereof reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same
was permissible at the time) prior to the date hereof and (ii) none of the wells
located on the Mortgaged Property (or properties unitized therewith) are or will
be deviated from the vertical more than the maximum permitted by applicable
laws, regulations, rules and orders, and such wells are, and will remain,
bottomed under and producing from, with the well bores wholly within, the
Mortgaged Property (or, in the case of wells located on properties unitized
therewith, such unitized properties). There are no dry holes, or otherwise
inactive wells, located on the Mortgaged Property or on lands pooled or unitized
therewith, except for wells that have been properly plugged and abandoned.
Mortgagor has, and will have in the future, all governmental and agency licenses
and permits necessary or appropriate to own and operate each Mortgaged Property;
Mortgagor has not received notice of any violations in respect of any such
licenses or permits.

      Section 3.10 Suits and Claims. There are no suits, actions, claims,
investigations, inquiries, proceedings or demands pending (or, to Mortgagor's
knowledge, threatened) which affect the Mortgaged Property (including, without
limitation, any which challenge or otherwise pertain to Mortgagor's title to the
Mortgaged Property) and no judicial or administrative actions, suits or
proceedings pending (or, to Mortgagor's knowledge, threatened) against
Mortgagor.

      Section 3.11 Environmental.

      (a)   Current Status. The Mortgaged Property and Mortgagor are not in
violation of Applicable Environmental Laws (as hereinafter defined), or subject
to any existing, pending or, to the best knowledge of Mortgagor, threatened
investigation or inquiry by any governmental authority or any other person under
or with respect to Applicable Environmental Laws, or subject to any remedial
obligations under Applicable Environmental Laws, and are in compliance with all
permits and licenses required under Applicable Environmental Laws, and to the
best knowledge of Mortgagor, this representation will continue to be true and
correct following disclosure to the applicable governmental authorities of all
relevant facts, conditions and circumstances, if any, pertaining to the
Mortgaged Property and Mortgagor. "Applicable Environmental Laws" shall mean any
applicable laws, orders, rules, or regulations pertaining to safety, health or
the environment, as such laws, orders, rules or regulations now exist or are
hereafter enacted and/or amended (including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended,
hereinafter called "CERCLA"), the Resource Conservation and Recovery Act of
1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal
Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended, hereinafter called "RCRA") and applicable state and local law).
Mortgagor undertook, at the time of acquisition of the Mortgaged Property, all
appropriate inquiry into the previous ownership and uses of the Mortgaged
Property consistent with good commercial or customary practice. Mortgagor has
taken reasonable steps necessary to determine and has determined that no
hazardous substances or solid wastes have been disposed of or otherwise released
at, into, upon or under the Mortgaged Property. The use which Mortgagor makes
and intends to make of the Mortgaged Property will not result in the use,
treatment, storage or disposal or other release of any hazardous substance or
solid waste at, into, upon or under the Mortgaged Property, except such usage,
and temporary storage in anticipation of usage, as is in the ordinary course of
business and in compliance with Applicable Environmental Laws. The terms
"hazardous substance" and "release" as used in this Mortgage shall have the
meanings specified in

                                       11
<PAGE>

CERCLA, and the terms "solid waste" and "disposal" (or "disposed") shall have
the meanings specified in RCRA; provided, in the event either CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and
provided further, to the extent that the laws of the states in which the
Mortgaged Properties are located establish a meaning for "hazardous substance,"
"release," "solid waste," or "disposal" which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply. The "Associated
Property" (as such term is hereinafter defined) is not in violation of any
Applicable Environmental Laws for which Mortgagor or its predecessors in title
to the Mortgaged Property would be responsible. The term "Associated Property"
as used in this Mortgage shall mean any and all interests in and to (and or
carved out of) the lands which are described or referred to in Exhibit A hereto,
or which are otherwise described in any of the oil, gas and/or mineral leases or
other instruments described in or referred to in such Exhibit A, whether or not
such property interests are owned by Mortgagor.

      (b)   Future Performance. Mortgagor will not cause or permit the Mortgaged
Property or the Associated Property or Mortgagor to be in violation of, or do
anything or permit anything to be done which will subject the Mortgaged Property
or the Associated Property to any remedial obligations under, or result in
noncompliance with applicable permits and licenses under, any Applicable
Environmental Laws, assuming disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Mortgaged Property or the Associated Property and Mortgagor
will promptly notify Mortgagee in writing of any existing, pending or, to the
best knowledge of Mortgagor, threatened investigation, claim, suit or inquiry by
any governmental authority or any person in connection with any Applicable
Environmental Laws. Mortgagor will take steps necessary to determine that no
hazardous substances or solid wastes have been disposed of or otherwise released
on or to the Mortgaged Property or the Associated Property. Mortgagor will not
cause or permit the disposal or other release of any hazardous substance or
solid waste at, into, upon or under the Mortgaged Property or the Associated
Property and covenants and agrees to keep or cause the Mortgaged Property and/or
the Associated Property to be kept free of any hazardous substance or solid
waste (except such use, and temporary storage in anticipation of use, as is
required in the ordinary course of business, all while in compliance with
Applicable Environmental Laws), and to remove the same (or if removal is
prohibited by law, to take whatever action is required by law), promptly upon
discovery at its sole expense. Upon Mortgagee's reasonable request, at any time
and from time to time during the existence of this Mortgage, but not more often
than once every six (6) months (so long as no Event of Default or Triggering
Event has occurred), Mortgagor will provide at Mortgagor's sole expense an
inspection or audit of the Mortgaged Property and the Associated Property from
an engineering or consulting firm approved by Mortgagee, indicating the presence
or absence of hazardous substances and solid waste on the Mortgaged Property
and/or the Associated Property and compliance with Applicable Environmental
Laws.

      Section 3.12 Not Abandon Wells; Participate in Operations. Mortgagor will
not, without prior written consent of Mortgagee, abandon, or consent to the
abandonment of, any well producing from the Mortgaged Property (or properties
unitized therewith) so long as such well is capable (or is subject to being made
capable through drilling, reworking or other operations which it would be
commercially feasible to conduct) of producing oil, gas, or other hydrocarbons
or other minerals in commercial quantities (as determined without considering
the effect of this Mortgage). Mortgagor will not, without prior written consent
of Mortgagee, elect not to participate in a proposed operation on the Mortgaged
Property where the effect of such election would be the forfeiture either
temporarily (i.e. until a certain sum of money is received out of the forfeited
interest) or permanently of any interest in the Mortgaged Property.

                                       12
<PAGE>

      Section 3.13 Condemnation Awards. If at any time all or any portion of the
Mortgaged Property shall be taken or damaged under the power of eminent domain,
the award received by condemnation proceedings for any property so taken or any
payment received in lieu of such condemnation proceedings shall be paid directly
to Mortgagee as agent for Mortgagor and all or any portion of such award or
payment, at the option of Mortgagee, shall be applied to the Secured
Indebtedness in payment of the last maturing installments of the Secured
Indebtedness or paid over, wholly or in part, to Mortgagor for any purpose or
object satisfactory to Mortgagee; provided that Mortgagee shall not be obligated
to see to the application of any amount paid over to Mortgagor. Mortgagor
immediately upon obtaining knowledge of the institution of any proceedings or
negotiations for the condemnation of the Mortgaged Property, or any portion
thereof, will notify Mortgagee of the pendency of such negotiations or
proceedings. Mortgagee may participate in any such negotiations or proceedings,
and Mortgagor from time to time will execute and deliver to Mortgagee all
instruments requested by Mortgagee to permit such participation.

      Section 3.14 Insurance. Mortgagor will maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event general
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business and in any case no less comprehensive
in scope than that maintained by the Mortgager as of the date hereof. In the
event of any loss under any insurance policies so carried by Mortgagor,
Mortgagee shall have the right (but not the obligation) to make proof of loss
and collect the same, and all amounts so received shall be applied toward costs,
charges and expenses (including reasonable attorneys' fees), if any, incurred in
the collection thereof, then to the payment, in the order determined by
Mortgagee in its own discretion, of the Indebtedness, and any balance remaining
shall be subject to the order of Mortgagor. Mortgagee is hereby authorized but
not obligated to enforce in its name or in the name of Mortgagor payment of any
or all of said policies or settle or compromise any claim in respect thereof,
and to collect and make receipts for the proceeds thereof and Mortgagee is
hereby appointed Mortgagor's agent and attorney-in-fact to endorse any check or
draft payable to Mortgagor in order to collect the proceeds of insurance. In the
event of foreclosure of this Mortgage, or other transfer of title to the
Mortgaged Property in extinguishment in whole or in part of the Indebtedness,
all right, title and interest of Mortgagor in and to such policies then in force
concerning the Mortgaged Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or other transferee in the
event of such other transfer of title.

      Section 3.15 Compliance with Leases. Mortgagor will observe and comply
with all of the terms and provisions, express or implied, of the oil, gas and
mineral leases covered by this Mortgage, and any other agreements or instruments
applicable thereto; and, except with the prior written consent of Mortgagee,
will not amend or terminate any of such agreements or surrender, abandon or
release any of such leases in whole or in part so long as any well situated
thereon, or located on any unit containing all or any part of such leases, is
capable of producing oil, gas, casinghead gas or other hydrocarbons in paying
quantities. Mortgagor will cause all obligations to the holders of royalty
interests and all other interests in the Mortgaged Properties to be promptly
discharged and all covenants and conditions, express or implied, imposed upon
the original lessee or his assigns by every such lease and every other agreement
relative thereto to be fully and promptly performed and to cause all acts
necessary or proper to accomplish the foregoing and prevent the breach or
forfeiture of any such lease to be fully and promptly performed. Mortgagor will
furnish to Mortgagee, at least fifteen (15) days in advance of the day upon
which any delay rentals may become due under any such lease, a report evidencing
that the same have been paid.

      Section 3.16 Further Assurance. Mortgagor will, on request of Mortgagee,
(i) promptly correct any defect, error or omission which may be discovered in
the contents of this Mortgage, or in any

                                       13
<PAGE>

other document or instrument executed in connection with any of the Loan
Documents, or in the execution or acknowledgment of this Mortgage or any other
document; (ii) execute, acknowledge, deliver and record and/or file such further
instruments (including, without limitation, further deeds of trust, mortgages,
security agreements, financing statements, continuation statements, and
assignments of production, accounts, funds, contract rights, general
intangibles, and proceeds) and do such further acts as may be necessary,
desirable or proper to carry out more effectively the purposes of this Mortgage
and to more fully identify and subject to the liens and security interests
hereof any property intended to be covered hereby, including specifically, but
without limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Mortgaged Property; and (iii) execute, acknowledge,
deliver, and file and/or record any document or instrument (including
specifically any financing statement) desired by Mortgagee to protect the lien
or the security interest hereunder against the rights or interests of third
persons. Mortgagor shall pay all costs connected with any of the foregoing.

      Section 3.17 Name and Place of Business. Except as disclosed in writing to
Mortgagee, Mortgagor has not during the preceding five (5) years been known by
or used any other corporate or partnership, trade or fictitious name. Mortgagor
will not cause or permit any change to be made in its name, identity, state of
formation or corporate or partnership structure, or its federal employer
identification number unless Mortgagor shall have notified Mortgagee of such
change at least thirty (30) days prior to the effective date of such change, and
shall have first taken all action required by Mortgagee for the purpose of
further perfecting or protecting the liens and security interests in the
Mortgaged Property created hereby. Mortgagor's exact name is the name set forth
in this Mortgage. Mortgagor is a registered organization which is organized
under the laws of one of the states comprising the United States (e.g.
corporation, limited partnership, registered limited liability partnership or
limited liability company). Mortgagor is located (as determined pursuant to the
UCC) in the state under which it is organized, which is Nevada. Mortgagor's
principal place of business and chief executive office, and the place where
Mortgagor keeps its books and records concerning the Mortgaged Property
(including, particularly, the records with respect to Production Proceeds from
the Mortgaged Property) has for the preceding four months, been, and will
continue to be (unless Mortgagor notifies Mortgagee of any change in writing at
least thirty (30) days prior to the date of such change), the address set forth
on the signature page of this Mortgage.

      Section 3.18 Compliance with Laws and Agreements. Mortgagor is in
compliance with all governmental requirements applicable to it or its property,
including, without limitation, all FERC regulations and the USA Patriot Act, and
all indentures, agreements and other instruments binding upon it or its
property. The execution and performance of the Loan Documents, this Mortgage and
the other documents and instruments contemplated hereby and thereby will not
violate the Trading with the Enemy Act, as amended, any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, the Executive Order referred to in the following sentence or
the U.S. Bank Secrecy Act (31 U.S.C. Sections 5311 et seq.). Mortgagor is not a
Person described by section 1 of Executive Order 13224 of September 24, 2001
entitled Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 Fed. Reg. 49,079 (2001), as amended,
and Mortgagor does not engage in any transactions or dealings, or is otherwise
associated with any such Persons. Mortgagor is not bound by any agreement,
document, instrument, judgment, decree, order, statute, law, rule or regulation
that limits or could reasonably be expected to limit its performance under the
Loan Documents or this Mortgage.

      Section 3.19 Inspection; Management. Mortgagee and any persons authorized
by Mortgagee shall have the right to enter and inspect the Mortgaged Property at
all reasonable times. If, at any time after an Event of Default by Mortgagor,
the management or maintenance of the Mortgaged Property is

                                       14
<PAGE>

determined by Mortgagee to be unsatisfactory and is not corrected within thirty
(30) days after notice to Mortgagor, Mortgagor will, to the extent Mortgagor is
entitled under third party agreements affecting the same, employ, for the
duration of such Event of Default, as managing agent of the Mortgaged Property,
any person from time to time designated or approved by Mortgagee.

                                   ARTICLE IV
                               Rights and Remedies

      Section 4.01 Event of Default. As used in this Mortgage, an "Event of
Default" means the failure by Mortgagor for ten (10) days from the date
Mortgagor knew or should have known of such failure to comply with any covenant,
agreement, warranty or condition herein required to be observed, kept or
performed or the occurrence of an "Event of Default" or Triggering Event, each
as defined under the Note.

      Section 4.02 Foreclosure and Sale.

      (a)   If an Event of Default shall occur and be continuing, Mortgagee
shall have the right and option to proceed with foreclosure by directing
Trustee, or his successors or substitutes in trust, to proceed with foreclosure
and to sell, to the extent permitted by law, all or any portion of the Mortgaged
Property at one or more sales, as an entirety or in parcels, at such place or
places in otherwise such manner and upon such notice as may be required by law,
or, in the absence of any such requirement, as Mortgagee may deem appropriate,
and to make conveyance to the purchaser or purchasers. Where the Mortgaged
Property is situated in more than one jurisdiction, notice as above provided
shall be posted and filed in all such jurisdictions (if such notices are
required by law), and all such Mortgaged Property may be sold in any such
jurisdiction and any such notice shall designate the jurisdiction where such
Mortgaged Property is to be sold. Nothing contained in this Section 4.02 shall
be construed so as to limit in any way Trustee's rights to sell the Mortgaged
Property, or any portion thereof, by private sale if, and to the extent that,
such private sale is permitted under the laws of the applicable jurisdiction or
by public or private sale after entry of a judgment by any court of competent
jurisdiction so ordering. Mortgagor hereby irrevocably appoints Trustee to be
the attorney of Mortgagor and in the name and on behalf of Mortgagor to execute
and deliver any deeds, transfers, conveyances, assignments, assurances and
notices which Mortgagor ought to execute and deliver and do and perform any and
all such acts and things which Mortgagor ought to do and perform under the
covenants herein contained and generally, to use the name of Mortgagor in the
exercise of all or any of the powers hereby conferred on Trustee. At any such
sale: (i) whether made under the power herein contained or any other legal
enactment, or by virtue of any judicial proceedings or any other legal right,
remedy or recourse, it shall not be necessary for Trustee to have physically
present, or to have constructive possession of, the Mortgaged Property
(Mortgagor hereby covenanting and agreeing to deliver to Trustee any portion of
the Mortgaged Property not actually or constructively possessed by Trustee
immediately upon demand by Trustee) and the title to and right of possession of
any such property shall pass to the purchaser thereof as completely as if the
same had been actually present and delivered to purchaser at such sale, (ii)
each instrument of conveyance executed by Trustee shall contain a general
warranty of title, binding upon Mortgagor and its successors and assigns, (iii)
each and every recital contained in any instrument of conveyance made by Trustee
shall conclusively establish the truth and accuracy of the matters recited
therein, including, without limitation, nonpayment of the Indebtedness,
advertisement and conduct of such sale in the manner provided herein and
otherwise by law and appointment of any successor Trustee hereunder, (iv) any
and all prerequisites to the validity thereof shall be conclusively presumed to
have been performed, (v) the receipt of Trustee or of such other party or
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers for its purchase money and no such purchaser or purchasers, or its
assigns or personal representatives, shall

                                       15
<PAGE>

thereafter be obligated to see to the application of such purchase money, or be
in any way answerable for any loss, misapplication or nonapplication thereof,
(vi) to the fullest extent permitted by law, Mortgagor shall be completely and
irrevocably divested of all of its right, title, interest, claim and demand
whatsoever, either at law or in equity, in and to the property sold and such
sale shall be a perpetual bar both at law and in equity against Mortgagor, and
against any and all other persons claiming or to claim the property sold or any
part thereof, by, through or under Mortgagor, and (vii) to the extent and under
such circumstances as are permitted by law, Mortgagee may be a purchaser at any
such sale, and shall have the right, after paying or accounting for all costs of
said sale or sales, to credit the amount of the bid upon the amount of the
Indebtedness (in the order of priority set forth in Section 4.14 hereof) in lieu
of cash payment.

      (b)   With respect to that portion, if any, of the Mortgaged Property
situated in the State of Wyoming, this instrument may be foreclosed by
advertisement and sale as provided by applicable Wyoming statutes.

      Section 4.03 Agents. Trustee or his successor or substitute may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale held by Trustee, including the posting of notices and
the conduct of sale, but in the name and on behalf of Trustee, his successor or
substitute. If Trustee or his successor or substitute shall have given notice of
sale hereunder, any successor or substitute trustee thereafter appointed may
complete the sale and the conveyance of the property pursuant thereto as if such
notice had been given by the successor or substitute trustee conducting the
sale.

      Section 4.04 Judicial Foreclosure; Receivership. If any of the
Indebtedness shall become due and payable and shall not be promptly paid,
Trustee or Mortgagee shall have the right and power to proceed by a suit or
suits in equity or at law, whether for the specific performance of any covenant
or agreement herein contained or in aid of the execution of any power herein
granted, or for any foreclosure hereunder or for the sale of the Mortgaged
Property under the judgment or decree of any court or courts of competent
jurisdiction or for the enforcement of any other appropriate legal or equitable
remedy. In addition to all other remedies herein provided for, Mortgagor agrees
that, upon the occurrence of an Event of Default or any event or circumstance
which, with the lapse of time or the giving of notice, or both, would constitute
an Event of Default hereunder, Mortgagee shall as a matter of right be entitled
to the appointment of a receiver or receivers for all or any part of the
Mortgaged Property, whether such receivership be incident to a proposed sale (or
sales) of such property or otherwise, and without regard to the value of the
Mortgaged Property or the solvency of any person or persons liable for the
payment of the Indebtedness secured hereby, and Mortgagor does hereby consent to
the appointment of such receiver or receivers, waives any and all defenses to
such appointment, and agrees not to oppose any application therefor by
Mortgagee, and agrees that such appointment shall in no manner impair, prejudice
or otherwise affect the rights of Mortgagee under Article II hereof. Mortgagor
expressly waives notice of a hearing for appointment of a receiver and the
necessity for bond or an accounting by the receiver. Nothing herein is to be
construed to deprive Mortgagee of any other right, remedy or privilege it may
now or hereafter have under the law to have a receiver appointed. Any money
advanced by Trustee and/or Mortgagee in connection with any such receivership
shall be a demand obligation (which obligation Mortgagor hereby expressly
promises to pay) included in the Indebtedness owing by Mortgagor to the Trustee
and/or Mortgagee and shall bear interest from the date of making such advance by
Trustee and/or Mortgagee until paid at the then applicable interest rate under
the Note (the "Applicable Rate").

      Section 4.05 Foreclosure for Installments. Mortgagee shall also have the
option to proceed with foreclosure in satisfaction of any installments of the
Indebtedness which have not been paid when due either through the courts or by
directing Trustee or his successors in trust to proceed with foreclosure

                                       16
<PAGE>

in satisfaction of the matured but unpaid portion of the Indebtedness as if
under a full foreclosure, conducting the sale as herein provided and without
declaring the entire principal balance and accrued interest due; such sale may
be made subject to the unmatured portion of the Indebtedness, and any such sale
shall not in any manner affect the unmatured portion of the Indebtedness, but as
to such unmatured portion of the Indebtedness this Mortgage shall remain in full
force and effect just as though no sale had been made hereunder. It is further
agreed that several sales may be made hereunder without exhausting the right of
sale for any unmatured part of the Indebtedness, it being the purpose hereof to
provide for a foreclosure and sale of the security for any matured portion of
the Indebtedness without exhausting the power to foreclose and sell the
Mortgaged Property for any subsequently maturing portion of the Indebtedness.

      Section 4.06 Separate Sales. The Mortgaged Property may be sold in one or
more parcels and in such manner and order as Mortgagee, in its sole discretion,
may elect, it being expressly understood and agreed that the right of sale
arising out of any Event of Default shall not be exhausted by any one or more
sales.

      Section 4.07 Possession of Mortgaged Property. Mortgagor agrees to the
full extent that it lawfully may, that, in case one or more of the Events of
Default shall have occurred and shall not have been remedied, then, and in every
such case, Trustee or Mortgagee shall have the right and power to enter into and
upon and take possession of all or any part of the Mortgaged Property in the
possession of Mortgagor, its successors or assigns, or its or their agents or
servants, and may exclude Mortgagor, its successors or assigns, and all persons
claiming under Mortgagor, and its or their agents or servants wholly or partly
therefrom; and, holding the same, Trustee may use, administer, manage, operate
and control the Mortgaged Property and conduct the business thereof to the same
extent as Mortgagor, its successors or assigns, might at the time do and may
exercise all rights and powers of Mortgagor, in the name, place and stead of
Mortgagor, or otherwise as Trustee shall deem best. All costs, expenses and
liabilities of every character incurred by Trustee and/or Mortgagee in
administering, managing, operating, and controlling the Mortgaged Property shall
constitute a demand obligation (which obligation Mortgagor hereby expressly
promises to pay) owing by Mortgagor to Trustee and/or Mortgagee and shall bear
interest from date of expenditure until paid at the Applicable Rate, all of
which shall constitute a portion of the Indebtedness and shall be secured by
this Mortgage and all other security instruments.

      Section 4.08 Occupancy After Foreclosure. In the event there is a
foreclosure sale hereunder and at the time of such sale Mortgagor or Mortgagor's
representatives, successors or assigns or any other person claiming any interest
in the Mortgaged Property by, through or under Mortgagor, are occupying or using
the Mortgaged Property or any part thereof, each and all shall immediately
become the tenant of the purchaser at such sale, which tenancy shall be a
tenancy from day to day, terminable at the will of either the landlord or
tenant, or at a reasonable rental per day based upon the value of the property
occupied, such rental to be due daily to the purchaser; to the extent permitted
by applicable law, the purchaser at such sale shall, notwithstanding any
language herein apparently to the contrary, have the sole option to demand
immediate possession following the sale or to permit the occupants to remain as
tenants at will. In the event the tenant fails to surrender possession of said
property upon demand, the purchaser shall be entitled to institute and maintain
a summary action for possession of the Mortgaged Property (such as an action for
forcible entry and detainer) in any court having jurisdiction.

      Section 4.09 Remedies Cumulative, Concurrent and Nonexclusive. Every
right, power and remedy herein given to Trustee or Mortgagee shall be cumulative
and in addition to every other right, power and remedy herein specifically given
or now or hereafter existing in equity, at law or by statute (including
specifically those granted by the Applicable UCC in effect and applicable to the
Mortgaged Property or any portion thereof) each and every right, power and
remedy whether specifically herein

                                       17
<PAGE>

given or otherwise existing may be exercised from time to time and so often and
in such order as may be deemed expedient by Trustee or Mortgagee, and the
exercise, or the beginning of the exercise, of any such right, power or remedy
shall not be deemed a waiver of the right to exercise, at the same time or
thereafter any other right, power or remedy. No delay or omission by Trustee or
Mortgagee in the exercise of any right, power or remedy shall impair any such
right, power or remedy or operate as a waiver thereof or of any other right,
power or remedy then or thereafter existing.

      Section 4.10 No Release of Obligations. Neither Mortgagor, any guarantor
nor any other person hereafter obligated for payment of all or any part of the
Indebtedness shall be relieved of such obligation by reason of (a) the failure
of Trustee to comply with any request of Mortgagor, or any guarantor or any
other person so obligated to foreclose the lien of this Mortgage or to enforce
any provision hereunder or under the any of the Loan Documents; (b) the release,
regardless of consideration, of the Mortgaged Property or any portion thereof or
interest therein or the addition of any other property to the Mortgaged
Property; (c) any agreement or stipulation between any subsequent owner of the
Mortgaged Property and Mortgagee extending, renewing, rearranging or in any
other way modifying the terms of this Mortgage without first having obtained the
consent of, given notice to or paid any consideration to Mortgagor, any
guarantor or such other person, and in such event Mortgagor, guarantor and all
such other persons shall continue to be liable to make payment according to the
terms of any such extension or modification agreement unless expressly released
and discharged in writing by Mortgagee; or (d) by any other act or occurrence
save and except the complete payment of the Indebtedness and the complete
fulfillment of all obligations hereunder or under the Loan Documents.

      Section 4.11 Release of and Resort to Collateral. Mortgagee may release,
regardless of consideration, any part of the Mortgaged Property without, as to
the remainder, in any way impairing, affecting, subordinating or releasing the
lien or security interest created in or evidenced by this Mortgage or its
stature as a first and prior lien and security interest in and to the Mortgaged
Property, and without in any way releasing or diminishing the liability of any
person or entity liable for the repayment of the Indebtedness. For payment of
the Indebtedness, Mortgagee may resort to any other security therefor held by
Mortgagee or Trustee in such order and manner as Mortgagee may elect.

      Section 4.12 Waiver of Redemption, Notice and Marshalling of Assets, Etc.
To the fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefits that might accrue to
Mortgagor by virtue of any present or future moratorium law or other law
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; provided, however,
that if the laws of any state do not permit the redemption period to be waived,
the redemption period is specifically reduced to the minimum amount of time
allowable by statute; (b) all notices of any Event of Default or of Mortgagee's
intention to accelerate maturity of the Indebtedness or of Trustee's election to
exercise or his actual exercise of any right, remedy or recourse provided for
hereunder or under the Loan Documents; and (c) any right to a marshalling of
assets or a sale in inverse order of alienation. If any law referred to in this
Mortgage and now in force, of which Mortgagor or its successor or successors
might take advantage despite the provisions hereof, shall hereafter be repealed
or cease to be in force, such law shall thereafter be deemed not to constitute
any part of the contract herein contained or to preclude the operation or
application of the provisions hereof.

      Section 4.13 Discontinuance of Proceedings. In case Mortgagee shall have
proceeded to invoke any right, remedy or recourse permitted hereunder or under
the Loan Documents and shall thereafter elect to discontinue or abandon same for
any reason, Mortgagee shall have the unqualified right so to do and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Indebtedness, this Mortgage, the Loan Documents, the Mortgaged
Property and otherwise,

                                       18
<PAGE>

and the rights, remedies, recourses and powers of Mortgagee shall continue as if
same had never been invoked.

      Section 4.14 Application of Proceeds. The proceeds of any sale of the
Mortgaged Property or any part thereof and all other monies received by Trustee
or Mortgagee in any proceedings for the enforcement hereof or otherwise, whose
application has not elsewhere herein been specifically provided for, shall be
applied:

      (a)   first, to the payment of all costs and expenses incurred by Trustee
or Mortgagee incident to the enforcement of this Mortgage, the Loan Documents or
any of the Indebtedness (including, without limiting the generality of the
foregoing, expenses of any entry or taking of possession, of any sale, of
advertisement thereof, and of conveyances, and court costs, compensation of
agents and employees, legal fees and a reasonable commission to Trustee acting),
and to the payment of all other charges, expenses, liabilities and advances
incurred or made by Trustee or Mortgagee under this Mortgage or in executing any
trust or power hereunder;

      (b)   second, to payment of the Indebtedness in such order and manner as
Mortgagee may elect in Mortgagee's sole discretion; and

      (c)   third, to Mortgagor or such other persons as may be entitled thereto
by law or as otherwise required by any Governmental Requirement.

      Section 4.15 Resignation of Operator. In addition to all rights and
remedies under this Mortgage, at law and in equity, if any Event of Default
shall occur and Trustee or Mortgagee shall exercise any remedies under this
Mortgage with respect to any portion of the Mortgaged Property (or Mortgagor
shall transfer any Mortgaged Property "in lieu of" foreclosure), Mortgagee or
Trustee shall have the right to request that any operator of any Mortgaged
Property which is either Mortgagor or any affiliate of Mortgagor to resign as
operator under the joint operating agreement applicable thereto, and no later
than 60 days after receipt by Mortgagor of any such request, Mortgagor shall
resign (or cause such other party to resign) as operator of such Mortgaged
Property.

Section 4.16 INDEMNITY. IN CONNECTION WITH ANY ACTION TAKEN BY TRUSTEE AND/OR
MORTGAGEE PURSUANT TO THIS MORTGAGE, TRUSTEE AND/OR MORTGAGEE AND THEIR
OFFICERS, DIRECTORS, PARTNERS, MEMBERS, INVESTORS, EQUITY HOLDERS, EMPLOYEES,
REPRESENTATIVES, AGENTS, ADVISORS, ATTORNEYS, ACCOUNTANTS AND EXPERTS AND ANY
PERSONS OR ENTITIES OWNED OR CONTROLLED BY TRUSTEE, OR MORTGAGEE OR ANY SUCH
OTHER PERSON OR ENTITY ("INDEMNIFIED PARTIES") SHALL NOT BE LIABLE FOR ANY LOSS
SUSTAINED BY MORTGAGOR RESULTING FROM AN ASSERTION THAT MORTGAGEE HAS RECEIVED
FUNDS FROM THE PRODUCTION OF HYDROCARBONS CLAIMED BY THIRD PERSONS OR ANY ACT OR
OMISSION OF ANY INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR
CONTROLLING THE MORTGAGED PROPERTY INCLUDING SUCH LOSS WHICH MAY RESULT FROM THE
ORDINARY NEGLIGENCE OF AN INDEMNIFIED PARTY UNLESS SUCH LOSS IS CAUSED BY THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNIFIED PARTY, NOR SHALL
TRUSTEE AND/OR MORTGAGEE BE OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION,
DUTY OR LIABILITY OF MORTGAGOR. MORTGAGOR SHALL AND DOES HEREBY AGREE TO
INDEMNIFY EACH INDEMNIFIED PARTY FOR, AND TO HOLD EACH INDEMNIFIED PARTY
HARMLESS FROM, ANY AND ALL LIABILITY, LOSS OR DAMAGE WHICH MAY OR MIGHT BE
INCURRED BY ANY INDEMNIFIED PARTY BY REASON OF THIS MORTGAGE OR THE EXERCISE OF
RIGHTS OR REMEDIES HEREUNDER; SHOULD TRUSTEE AND/OR MORTGAGEE MAKE ANY
EXPENDITURE ON ACCOUNT OF ANY SUCH LIABILITY, LOSS OR DAMAGE, THE AMOUNT
THEREOF, INCLUDING COSTS, EXPENSES AND REASONABLE ATTORNEYS' FEES, SHALL BE A
DEMAND OBLIGATION (WHICH OBLIGATION MORTGAGOR HEREBY EXPRESSLY PROMISES TO PAY)
OWING

                                       19
<PAGE>

BY MORTGAGOR TO TRUSTEE AND/OR MORTGAGEE AND SHALL BEAR INTEREST FROM THE DATE
EXPENDED UNTIL PAID AT THE POST-DEFAULT RATE, SHALL BE A PART OF THE
INDEBTEDNESS AND SHALL BE SECURED BY THIS MORTGAGE AND ANY OTHER SECURITY
INSTRUMENT. MORTGAGOR HEREBY ASSENTS TO, RATIFIES AND CONFIRMS ANY AND ALL
ACTIONS OF TRUSTEE AND/OR MORTGAGEE WITH RESPECT TO THE MORTGAGED PROPERTY TAKEN
UNDER THIS MORTGAGE. THE LIABILITIES OF MORTGAGOR AS SET FORTH IN THIS SECTION
4.16 SHALL SURVIVE THE TERMINATION OF THIS MORTGAGE.

                                   ARTICLE V
                                    Trustee

      Section 5.01 Duties, Rights, and Powers of Trustee. It shall be no part of
the duty of Trustee to see to any recording, filing or registration of this
Mortgage or any other instrument in addition or supplemental thereto, or to give
any notice thereof, or to see to the payment of or be under any duty in respect
of any tax or assessment or other governmental charge which may be levied or
assessed on the Mortgaged Property, or any part thereof, or against Mortgagor,
or to see to the performance or observance by Mortgagor of any of the covenants
and agreements contained herein. Trustee shall not be responsible for the
execution, acknowledgment or validity of this Mortgage or of any instrument in
addition or supplemental hereto or for the sufficiency of the security purported
to be created hereby, and makes no representation in respect thereof or in
respect of the rights of Mortgagee. Trustee shall have the right to advise with
counsel upon any matters arising hereunder and shall be fully protected in
relying as to legal matters on the advice of counsel. Trustee shall not incur
any personal liability hereunder except for Trustee's own willful misconduct;
and Trustee shall have the right to rely on any instrument, document or
signature authorizing or supporting any action taken or proposed to be taken by
him hereunder, believed by him in good faith to be genuine.

      Section 5.02 Successor Trustee. Trustee may resign by written notice
addressed to Mortgagee or be removed at any time with or without cause by an
instrument in writing duly executed on behalf of Mortgagee. In case of the
death, resignation or removal of Trustee, a successor trustee may be appointed
by Mortgagee by instrument of substitution complying with any applicable
requirements of law, or, in the absence of any such requirement, without other
formality than appointment and designation in writing. Written notice of such
appointment and designation shall be given by Mortgagee to Mortgagor, but the
validity of any such appointment shall not be impaired or affected by failure to
give such notice or by any defect therein. Such appointment and designation
shall be full evidence of the right and authority to make the same and of all
the facts therein recited, and, upon the making of any such appointment and
designation, this Mortgage shall vest in the successor trustee all the estate
and title in and to all of the Mortgaged Property, and the successor trustee
shall thereupon succeed to all of the rights, powers, privileges, immunities and
duties hereby conferred upon Trustee named herein, and one such appointment and
designation shall not exhaust the right to appoint and designate a successor
trustee hereunder but such right may be exercised repeatedly as long as any
Indebtedness remains unpaid hereunder. To facilitate the administration of the
duties hereunder, Mortgagee may appoint multiple trustees to serve in such
capacity or in such jurisdictions as Mortgagee may designate.

      Section 5.03 Retention of Moneys. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by law), and Trustee shall be under
no liability for interest on any moneys received by him hereunder.

                                       20
<PAGE>

                                   ARTICLE VI
                                  Miscellaneous

      Section 6.01 Instrument Construed as Mortgage, Etc. With respect to any
portions of the Mortgaged Property located in any state or other jurisdiction
the laws of which do not provide for the use or enforcement of a deed of trust
or the office, rights and authority of Trustee as herein provided, the general
language of conveyance hereof to Trustee is intended and the same shall be
construed as words of mortgage unto and in favor of Mortgagee and the rights and
authority granted to Trustee herein may be enforced and asserted by Mortgagee in
accordance with the laws of the jurisdiction in which such portion of the
Mortgaged Property is located and the same may be foreclosed at the option of
Mortgagee as to any or all such portions of the Mortgaged Property in any manner
permitted by the laws of the jurisdiction in which such portions of the
Mortgaged Property is situated. This Mortgage may be construed as a mortgage,
deed of trust, chattel mortgage, conveyance, assignment, security agreement,
pledge, financing statement, hypothecation or contract, or any one or more of
them, in order fully to effectuate the lien hereof and the purposes and
agreements herein set forth.

      Section 6.02 Release of Mortgage. If all Indebtedness secured hereby shall
be paid and the Loan Documents terminated, Mortgagee shall forthwith cause
satisfaction and discharge of this Mortgage to be entered upon the record at the
expense of Mortgagor and shall execute and deliver or cause to be executed and
delivered such instruments of satisfaction and reassignment as may be
appropriate. Otherwise, this Mortgage shall remain and continue in full force
and effect. In addition to the foregoing, upon the request of Mortgagor,
Mortgagee may, in its sole and absolute discretion, release any part of the
Mortgaged Property (including, without limitation, any Hydrocarbon Property)
from the lien of this Mortgage and upon such release, Mortgagor and Mortgagee
shall enter into an amendment to this Mortgage, and to the extent necessary
Exhibit A hereto, to reflect such release of lien.

      Section 6.03 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of Trustee and Mortgagee in order to
effectuate the provisions hereof, and the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of any such provision in any other jurisdiction.

      Section 6.04 Successors and Assigns of Parties. The term "Mortgagee" as
used herein shall mean and include any legal owner, holder, assignee or pledgee
of any of the Indebtedness secured hereby. The terms used to designate Trustee,
Mortgagee and Mortgagor shall be deemed to include the respective heirs, legal
representatives, successors and assigns of such parties.

      Section 6.05 Satisfaction of Prior Encumbrance. To the extent that
proceeds of the Notes are used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance against the Mortgaged
Property, such proceeds have been advanced by Mortgagee at Mortgagor's request,
and Mortgagee shall be subrogated to any and all rights, security interests and
liens owned by any owner or holder of such outstanding liens, security
interests, charges or encumbrances, irrespective of whether said liens, security
interests, charges or encumbrances are released, and it is expressly understood
that, in consideration of the payment of such other indebtedness by Mortgagee,
Mortgagor hereby waives and releases all demands and causes of action for
offsets and payments to, upon and in connection with the said indebtedness.

      Section 6.06 Subrogation of Trustee. This Mortgage is made with full
substitution and subrogation of Trustee and his successors in this trust and his
and their assigns in and to all covenants and warranties by others heretofore
given or made in respect of the Mortgaged Property or any part thereof.

                                       21
<PAGE>

      Section 6.07 Nature of Covenants. The covenants and agreements herein
contained shall constitute covenants running with the land and interests covered
or affected hereby and shall be binding upon the heirs, legal representatives,
successors and assigns of the parties hereto.

      Section 6.08 Notices. All notices, requests, consents, demands and other
communications required or permitted hereunder shall be given or furnished in
Section 9(f) of the Purchase Agreement.

      Section 6.09 Counterparts. This Mortgage is being executed in several
counterparts, all of which are identical, except that to facilitate recordation,
if the Mortgaged Property is situated in more than one jurisdiction,
descriptions of only those portions of the Mortgaged Property located in, and
descriptions of the Prior Mortgages for, the jurisdiction in which a particular
counterpart is recorded shall be attached as Exhibit A and Schedule I,
respectively, thereto. An Exhibit A containing a description of all Mortgaged
Property wheresoever situated will be attached to that certain counterpart to be
attached to a Financing Statement and filed with the Secretary of State of
Wyoming in the Uniform Commercial Code Records. Each of such counterparts shall
for all purposes be deemed to be an original and all such counterparts shall
together constitute but one and the same instrument provided that a facsimile
signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.

      Section 6.10 Effective as a Financing Statement. This Mortgage, among
other things, covers goods which are or are to become fixtures on the real
property described herein and covers as-extracted collateral related to the
real/immovable property described herein. This Mortgage shall be effective as a
financing statement (i) filed as a fixture filing with respect to all fixtures
included within the Mortgaged Property, (ii) covering as-extracted collateral
with respect to all as-extracted collateral included within the Mortgaged
Property (including, without limitation, all oil, gas, other minerals and other
substances of value which may be extracted from the earth at the wellhead or
minehead) and (iii) covering all other Mortgaged Property. This Mortgage is to
be filed for record in the real/immovable property records of each county or
parish where any part of the Mortgaged Property is situated and may also be
filed in the offices of the Bureau of Land Management or the Minerals Management
Service or any relevant state agency (or any successor agencies). The mailing
address of Mortgagor is the address of Mortgagor set forth at the end of this
Mortgage and the address of Mortgagee from which information concerning the
security interests hereunder may be obtained is the address of Mortgagee set
forth at the end of this Mortgage. Nothing contained in this paragraph shall be
construed to limit the scope of this Mortgage nor its effectiveness as a
financing statement covering any type of property. A carbon, photographic,
facsimile or other reproduction of this Mortgage or of any financing statement
relating to this Mortgage shall be sufficient as a financing statement for any
of the purposes referred to this Section. Without limiting any other provision
herein, Mortgagor hereby authorizes Mortgagee to file, in any filing or
recording office, one or more financing statements and any renewal or
continuation statements thereof.

      Section 6.11 No Impairment of Security. To the extent allowed by
applicable law, the lien, privilege, security interest and other security rights
hereunder shall not be impaired by any indulgence, moratorium or release which
may be granted including, but not limited to, any renewal, extension or
modification which may be granted with respect to any secured obligations, or
any surrender, compromise, release, renewal, extension, exchange or substitution
which may be granted in respect of the Mortgaged Property (including without
limitation Production Proceeds), or any part thereof or any interest therein, or
any release or indulgence granted to any borrower, endorser, guarantor or surety
of any Indebtedness.

      Section 6.12 Acts Not Constituting Waiver. Any Event of Default may be
waived without waiving any other prior or subsequent Event of Default. Any Event
of Default may be remedied without

                                       22
<PAGE>

waiving the Event of Default remedied. Neither failure to exercise, nor delay in
exercising, any right, power or remedy upon any Event of Default shall be
construed as a waiver of such Event of Default or as a waiver of the right to
exercise any such right, power or remedy at a later date. No single or partial
exercise of any right, power or remedy hereunder shall exhaust the same or shall
preclude any other or further exercise thereof, and every such right, power or
remedy hereunder may be exercised at any time and from time to time. No
modification or waiver of any provision hereof nor consent to any departure by
Mortgagor therefrom shall in any event be effective unless the same shall be in
writing and signed by Mortgagee and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given and to
the extent therein specified. No notice nor demand on Mortgagor in any case
shall of itself entitle Mortgagor to any other or further notice or demand in
similar or other circumstances. Acceptance of any payment in an amount less than
the amount then due on any Indebtedness shall be deemed an acceptance on account
only and shall not in any way excuse the existence of an Event of Default
hereunder.

      Section 6.13 Mortgagor's Successors. In the event the ownership of any
Mortgaged Property or any part thereof becomes vested in a person other than
Mortgagor, then, without notice to Mortgagor, such successor or successors in
interest may be dealt with, with reference to this Mortgage and to the
obligations secured hereby, in the same manner as with Mortgagor, without in any
way vitiating or discharging Mortgagor's liability hereunder or for the payment
of the Indebtedness or performance of the obligations secured hereby. No
transfer of any Mortgaged Property, no forbearance, and no extension of the time
for the payment of any Indebtedness secured hereby, shall operate to release,
discharge, modify, change or affect, in whole or in part, the liability of
Mortgagor hereunder or for the payment of the Indebtedness or performance of the
obligations secured hereby, or the liability of any other person hereunder or
for the payment of the Indebtedness.

      Section 6.14 Certain Consents. Except where otherwise expressly provided
herein, in any instance hereunder where the approval, consent or the exercise of
judgment of Mortgagee is required, the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion of
Mortgagee, and Mortgagee shall not, for any reason or to any extent, be required
to grant such approval or consent or exercise such judgment in any particular
manner, regardless of the reasonableness of either the request or the judgment
of such party.

      Section 6.15 GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WYOMING WITHOUT GIVING
EFFECT TO ITS LAWS RELATING TO CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE
LAWS OF ANY OTHER JURISDICTION MANDATORILY GOVERN THE ATTACHMENT, CREATION
VALIDITY, PRIORITY, PERFECTION OR MANNER OR PROCEDURE FOR ENFORCEMENT OF THE
LIENS OR SECURITY INTERESTS CREATED BY THIS MORTGAGE; PROVIDED, HOWEVER, ANY
REMEDIES PROVIDED IN THIS MORTGAGE WHICH ARE VALID UNDER THE LAWS OF THE
JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT OF THIS MORTGAGE ARE TAKEN
SHALL NOT BE AFFECTED BY ANY INVALIDITY UNDER THE LAWS OF THE STATE OF WYOMING.

      Section 6.16 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT
IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS
IN FACT READ THIS MORTGAGE AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS MORTGAGE; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE; AND HAS RECEIVED THE
ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS MORTGAGE RESULT IN ONE PARTY ASSUMING THE
LIABILITY INHERENT

                                       23
<PAGE>

IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS MORTGAGE ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."

      Section 6.17 FINAL AGREEMENT. THE LOAN DOCUMENTS, THIS MORTGAGE AND THE
SECURITY DOCUMENTS AND THE OTHER WRITTEN DOCUMENTS EXECUTED IN CONNECTION
THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      Section 6.18 Prior Mortgages. Mortgagor and Mortgagee acknowledge that
this Mortgage amends, restates and consolidates the Prior Mortgages, and all
liens, claims, rights, titles, interests and benefits created and granted by the
Prior Mortgages shall continue to exist, remain valid and subsisting, shall not
be impaired or released hereby, shall remain in full force and effect and are
hereby renewed, extended, carried forward and conveyed as security for the
Indebtedness.

                                       24
<PAGE>

      WITNESS THE EXECUTION HEREOF, this 19th day of August, 2004, to be
effective as of _____________, 2004 (the "Effective Date").

                                            MORTGAGOR:

                                            ____________________________________

                                            By:_________________________________
                                               Name:
                                               Title:

The name and address of the Debtor/Mortgagor is

            Dolphin Energy Corporation
            1331 - 17th Street, Suite 730
            Denver, Colorado 80202

The name and address of the Secured Party/Mortgagee is:

            Promethean Asset Management L.L.C.
            750 Lexington, 22nd Floor
            New York, New York 10022

                                       25
<PAGE>

STATE OF COLORADO                           )
                                            )
CITY AND COUNTY OF DENVER                   )

      The foregoing instrument was acknowledged before me this ____ day of
      August, 2004, by __________________ as _______________________ of Dolphin
      Energy Corporation, a Nevada corporation, on behalf of said corporation.

      Witness my hand and official seal.

      My Commission Expires: _______________________________

                                            ____________________________
                                            Notary PublicExhibit 4.11

Grupo TMM, S.A.,

as Issuer

The
Guarantors Named Herein,

as Guarantors

and

The Bank of New York,

as Trustee

Indenture

Dated as of August 11, 2004

Senior
Secured Notes due 2007

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ONE
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  	
  1

  
	
   

  	
  SECTION 1.01

  	
  DEFINITIONS

  	
  1

  
	
   

  	
  SECTION 1.02

  	
  COMPLIANCE
  CERTIFICATES AND OPINIONS

  	
  25

  
	
   

  	
  SECTION 1.03

  	
  FORM OF
  DOCUMENTS DELIVERED TO TRUSTEE

  	
  26

  
	
   

  	
  SECTION 1.04

  	
  NOTICES, ETC. TO TRUSTEE AND COMPANY

  	
  27

  
	
   

  	
  SECTION 1.05

  	
  NOTICE TO
  HOLDERS; WAIVER

  	
  27

  
	
   

  	
  SECTION 1.06

  	
  CONFLICT WITH TRUST
  INDENTURE ACT

  	
  28

  
	
   

  	
  SECTION 1.07

  	
  EFFECT OF HEADINGS
  AND TABLE OF CONTENTS

  	
  28

  
	
   

  	
  SECTION
  1.08

  	
  SUCCESSORS
  AND ASSIGNS

  	
  28

  
	
   

  	
  SECTION
  1.09

  	
  SEPARABILITY
  CLAUSE

  	
  28

  
	
   

  	
  SECTION
  1.10

  	
  BENEFITS
  OF INDENTURE

  	
  28

  
	
   

  	
  SECTION 1.11

  	
  GOVERNING LAW

  	
  28

  
	
   

  	
  SECTION 1.12

  	
  SUBMISSION TO JURISDICTION

  	
  28

  
	
   

  	
  SECTION 1.13

  	
  LEGAL HOLIDAYS

  	
  29

  
	
   

  	
  SECTION 1.14

  	
  APPOINTMENT OF AGENT
  FOR SERVICE

  	
  29

  
	
   

  	
  SECTION
  1.15

  	
  COUNTERPART
  ORIGINALS

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO
  NOTE FORMS

  	
  29

  
	
   

  	
  SECTION 2.01

  	
  FORMS GENERALLY

  	
  29

  
	
   

  	
  SECTION
  2.02

  	
  FORM OF
  FACE OF NOTE

  	
  31

  
	
   

  	
  SECTION
  2.03

  	
  FORM
  OF REVERSE OF NOTE

  	
  35

  
	
   

  	
  SECTION 2.04

  	
  FORM OF
  GUARANTEE

  	
  43

  
	
   

  	
  SECTION
  2.05

  	
  FORM OF
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
  45

  
	
   

  	
  SECTION 2.06

  	
  REMOVAL OF PRIVATE
  PLACEMENT LEGEND.

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  THREE THE NOTES

  	
  47

  
	
   

  	
  SECTION 3.01

  	
  TITLE AND TERMS.

  	
  47

  
	
   

  	
  SECTION 3.02

  	
  DENOMINATIONS; PAYMENT
  CURRENCY

  	
  51

  
	
   

  	
  SECTION 3.03

  	
  EXECUTION, AUTHENTICATION,
  DELIVERY AND DATING

  	
  51

  
	
   

  	
  SECTION 3.04

  	
  TEMPORARY NOTES

  	
  51

  
	
   

  	
  SECTION 3.05

  	
  NOTE REGISTRAR AND
  PAYING AGENT

  	
  52

  
	
   

  	
  SECTION 3.06

  	
  PAYING AGENT TO
  HOLD MONEY IN TRUST.

  	
  52

  
	
   

  	
  SECTION 3.07

  	
  HOLDER LISTS.

  	
  53

  
	
   

  	
  SECTION
  3.08

  	
  TRANSFER
  AND EXCHANGE.

  	
  53

  
	
   

  	
  SECTION 3.09

  	
  MUTILATED, DESTROYED, LOST
  AND STOLEN NOTES

  	
  59

  
	
   

  	
  SECTION
  3.10

  	
  PAYMENT
  OF INTEREST; INTEREST RIGHTS PRESERVED

  	
  59

  
	
   

  	
  SECTION
  3.11

  	
  PERSONS
  DEEMED OWNERS

  	
  60

  
						

 

i

 

	
   

  	
  SECTION 3.12

  	
  CANCELLATION

  	
  61

  
	
   

  	
  SECTION
  3.13

  	
  COMPUTATION
  OF INTEREST

  	
  61

  
	
   

  	
  SECTION
  3.14

  	
  RANKING;
  SUBORDINATION.

  	
  61

  
	
   

  	
  SECTION 3.15

  	
  CUSIP NUMBERS.

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR
  REDEMPTION OF NOTES

  	
  61

  
	
   

  	
  SECTION
  4.01

  	
  APPLICABILITY
  OF ARTICLE

  	
  61

  
	
   

  	
  SECTION
  4.02

  	
  RIGHT OF
  REDEMPTION

  	
  61

  
	
   

  	
  SECTION
  4.03

  	
  ELECTION TO
  REDEEM; NOTICE TO TRUSTEE

  	
  62

  
	
   

  	
  SECTION
  4.04

  	
  SELECTION
  BY TRUSTEE OF NOTES TO BE REDEEMED

  	
  62

  
	
   

  	
  SECTION
  4.05

  	
  NOTICE
  OF REDEMPTION

  	
  62

  
	
   

  	
  SECTION 4.06

  	
  DEPOSIT OF REDEMPTION PRICE

  	
  63

  
	
   

  	
  SECTION 4.07

  	
  NOTES PAYABLE ON
  REDEMPTION DATE

  	
  63

  
	
   

  	
  SECTION
  4.08

  	
  NOTES
  REDEEMED IN PART

  	
  64

  
	
   

  	
  SECTION
  4.09

  	
  OPTIONAL
  REDEMPTION DUE TO CHANGES IN TAX TREATMENT

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIVE
  COVENANTS

  	
  64

  
	
   

  	
  SECTION
  5.01

  	
  PAYMENTS
  OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST

  	
  64

  
	
   

  	
  SECTION 5.02

  	
  MAINTENANCE OF OFFICE
  OR AGENCY

  	
  65

  
	
   

  	
  SECTION
  5.03

  	
  MONEY FOR
  NOTE PAYMENTS TO BE HELD IN TRUST

  	
  65

  
	
   

  	
  SECTION 5.04

  	
  EXISTENCE

  	
  66

  
	
   

  	
  SECTION 5.05

  	
  MAINTENANCE OF PROPERTIES;
  INSURANCE

  	
  66

  
	
   

  	
  SECTION 5.06

  	
  PAYMENT OF
  TAXES

  	
  67

  
	
   

  	
  SECTION 5.07

  	
  ANNUAL OFFICERS’
  CERTIFICATE TO TRUSTEE

  	
  67

  
	
   

  	
  SECTION
  5.08

  	
  REPORTS
  TO BE FURNISHED TO TRUSTEE AND HOLDERS

  	
  67

  
	
   

  	
  SECTION
  5.09

  	
  FURTHER
  ASSURANCES

  	
  68

  
	
   

  	
  SECTION
  5.10

  	
  COMPANY
  TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND ADDRESSES OF HOLDERS

  	
  68

  
	
   

  	
  SECTION 5.11

  	
  WAIVER OF STAY,
  EXTENSION OR USURY LAWS

  	
  69

  
	
   

  	
  SECTION 5.12

  	
  LIMITATION ON
  RESTRICTED PAYMENTS.

  	
  69

  
	
   

  	
  SECTION 5.13

  	
  LIMITATION
  ON TRANSACTIONS WITH AFFILIATES

  	
  71

  
	
   

  	
  SECTION 5.14

  	
  LIMITATION ON INDEBTEDNESS.

  	
  71

  
	
   

  	
  SECTION
  5.15

  	
  LIMITATION
  ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES

  	
  74

  
	
   

  	
  SECTION 5.16

  	
  CHANGE OF
  CONTROL

  	
  75

  
	
   

  	
  SECTION
  5.17

  	
  LIMITATION
  ON LIENS

  	
  77

  
	
   

  	
  SECTION
  5.18

  	
  RESTRICTION
  ON ASSET DISPOSITIONS AND QUALIFYING DISPOSITIONS; APPLICATION OF VAT
  PROCEEDS.

  	
  78

  
	
   

  	
  SECTION
  5.19

  	
  LIMITATION
  ON SALE AND LEASEBACK TRANSACTIONS

  	
  81

  

 

ii

 

	
   

  	
  SECTION 5.20

  	
  LIMITATION ON INVESTMENTS

  	
  82

  
	
   

  	
  SECTION 5.21

  	
  LIMITATION ON
  BUSINESS ACTIVITIES

  	
  82

  
	
   

  	
  SECTION
  5.22

  	
  PAYMENTS
  FOR CONSENT

  	
  82

  
	
   

  	
  SECTION
  5.23

  	
  ADDITIONAL
  GUARANTEES; LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.

  	
  82

  
	
   

  	
  SECTION 5.24

  	
  RESTRICTION ON
  INVESTMENT ACTIVITY

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX
  REMEDIES

  	
  84

  
	
   

  	
  SECTION 6.01

  	
  EVENTS OF
  DEFAULT

  	
  84

  
	
   

  	
  SECTION
  6.02

  	
  DEFAULT
  RATE OF INTEREST

  	
  87

  
	
   

  	
  SECTION
  6.03

  	
  ACCELERATION
  OF MATURITY; RESCISSION AND ANNULMENT

  	
  87

  
	
   

  	
  SECTION
  6.04

  	
  COLLECTION
  OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE DEBT

  	
  88

  
	
   

  	
  SECTION 6.05

  	
  TRUSTEE MAY FILE
  PROOFS OF CLAIM

  	
  89

  
	
   

  	
  SECTION
  6.06

  	
  TRUSTEE
  MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES

  	
  90

  
	
   

  	
  SECTION 6.07

  	
  APPLICATION
  OF MONEY OR PROPERTY COLLECTED

  	
  90

  
	
   

  	
  SECTION
  6.08

  	
  LIMITATION
  ON SUITS

  	
  91

  
	
   

  	
  SECTION
  6.09

  	
  RIGHTS OF
  HOLDERS OF NOTES TO RECEIVE PAYMENT.

  	
  91

  
	
   

  	
  SECTION 6.10

  	
  RESTORATION OF
  RIGHTS AND REMEDIES

  	
  92

  
	
   

  	
  SECTION 6.11

  	
  RIGHTS AND REMEDIES
  CUMULATIVE

  	
  92

  
	
   

  	
  SECTION 6.12

  	
  DELAY OR OMISSION NOT
  WAIVER

  	
  92

  
	
   

  	
  SECTION
  6.13

  	
  CONTROL BY
  HOLDERS

  	
  92

  
	
   

  	
  SECTION
  6.14

  	
  WAIVER
  OF PAST DEFAULTS

  	
  93

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  SEVEN CONCERNING THE TRUSTEE

  	
  93

  
	
   

  	
  SECTION 7.01

  	
  DUTIES OF
  TRUSTEE.

  	
  93

  
	
   

  	
  SECTION
  7.02

  	
  CERTAIN
  RIGHTS OF TRUSTEE

  	
  94

  
	
   

  	
  SECTION 7.03

  	
  TRUSTEE NOT
  RESPONSIBLE FOR RECITALS, ETC

  	
  95

  
	
   

  	
  SECTION 7.04

  	
  TRUSTEE AND OTHERS
  MAY HOLD NOTES

  	
  96

  
	
   

  	
  SECTION 7.05

  	
  MONEYS HELD BY
  TRUSTEE OR PAYING AGENT

  	
  96

  
	
   

  	
  SECTION 7.06

  	
  COMPENSATION OF
  TRUSTEE AND ITS LIEN

  	
  96

  
	
   

  	
  SECTION
  7.07

  	
  RIGHT
  OF TRUSTEE TO RELY ON CERTIFICATE OF CERTAIN OFFICERS

  	
  97

  
	
   

  	
  SECTION
  7.08

  	
  PERSONS
  ELIGIBLE FOR APPOINTMENT AS TRUSTEE

  	
  97

  
	
   

  	
  SECTION
  7.09

  	
  RESIGNATION
  AND REMOVAL OF TRUSTEE; APPOINTMENT OF SUCCESSOR.

  	
  98

  
	
   

  	
  SECTION
  7.10

  	
  ACCEPTANCE
  OF APPOINTMENT BY SUCCESSOR TRUSTEE

  	
  99

  
	
   

  	
  SECTION 7.11

  	
  MERGER,
  CONVERSION OR CONSOLIDATION OF TRUSTEE

  	
  99

  
	
   

  	
  SECTION
  7.12

  	
  AUTHENTICATING
  AGENTS

  	
  100

  
	
   

  	
  SECTION
  7.13

  	
  REPORTS BY
  TRUSTEE

  	
  102

  

 

iii

 

	
   

  	
  SECTION 7.14

  	
  TRUSTEE RISK

  	
  102

  
	
   

  	
  SECTION 7.15

  	
  NOTICE OF
  DEFAULT.

  	
  102

  
	
   

  	
  SECTION
  7.16

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST THE COMPANY.

  	
  102

  
	
   

  	
  SECTION
  7.17

  	
  TRUSTEE’S
  APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.

  	
  102

  
	
   

  	
  SECTION
  7.18

  	
  LIMITATION
  OF LIABILITY.

  	
  102

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  EIGHT CONCERNING THE HOLDERS

  	
  103

  
	
   

  	
  SECTION 8.01

  	
  EVIDENCE OF ACTION
  TAKEN BY HOLDERS

  	
  103

  
	
   

  	
  SECTION
  8.02

  	
  PROOF
  OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF NOTES

  	
  103

  
	
   

  	
  SECTION 8.03

  	
  RIGHT OF REVOCATION
  OF ACTION TAKEN

  	
  104

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE
  HOLDERS’ MEETINGS

  	
  105

  
	
   

  	
  SECTION
  9.01

  	
  PURPOSES
  FOR WHICH HOLDERS’ MEETINGS MAY BE CALLED

  	
  105

  
	
   

  	
  SECTION 9.02

  	
  CALL OF MEETINGS BY TRUSTEE

  	
  105

  
	
   

  	
  SECTION 9.03

  	
  COMPANY AND
  HOLDERS MAY CALL MEETING

  	
  105

  
	
   

  	
  SECTION 9.04

  	
  PERSONS ENTITLED TO
  VOTE AT MEETING

  	
  105

  
	
   

  	
  SECTION
  9.05

  	
  DETERMINATION
  OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETING

  	
  106

  
	
   

  	
  SECTION
  9.06

  	
  COUNTING
  VOTES AND RECORDING ACTION OF MEETING

  	
  106

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN
  SUPPLEMENTAL INDENTURES AND AMENDMENT OF 
  COLLATERAL DOCUMENTS

  	
  107

  
	
   

  	
  SECTION
  10.01

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF HOLDERS

  	
  107

  
	
   

  	
  SECTION
  10.02

  	
  SUPPLEMENTAL
  INDENTURES WITH CONSENT OF HOLDERS

  	
  108

  
	
   

  	
  SECTION 10.03

  	
  EXECUTION OF
  SUPPLEMENTAL INDENTURES.

  	
  109

  
	
   

  	
  SECTION 10.04

  	
  EFFECT OF
  SUPPLEMENTAL INDENTURES

  	
  109

  
	
   

  	
  SECTION 10.05

  	
  CONFORMITY WITH
  TRUST INDENTURE ACT

  	
  109

  
	
   

  	
  SECTION
  10.06

  	
  REFERENCE
  IN NOTES TO SUPPLEMENTAL INDENTURES

  	
  110

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  ELEVEN SUCCESSOR CORPORATION

  	
  110

  
	
   

  	
  SECTION
  11.01

  	
  WHEN
  COMPANY MAY MERGE, ETC

  	
  110

  
	
   

  	
  SECTION
  11.02

  	
  SUCCESSOR
  CORPORATION

  	
  111

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  TWELVE SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

  	
  111

  
	
   

  	
  SECTION 12.01

  	
  TERMINATION OF
  COMPANY’S OBLIGATIONS

  	
  111

  
	
   

  	
  SECTION 12.02

  	
  APPLICATION OF TRUST MONEY

  	
  114

  
	
   

  	
  SECTION
  12.03

  	
  REPAYMENT
  TO COMPANY

  	
  114

  
	
   

  	
  SECTION 12.04

  	
  REINSTATEMENT

  	
  114

  

 

iv

 

	
  ARTICLE
  THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
  114

  
	
   

  	
  SECTION
  13.01

  	
  PERSONAL
  IMMUNITY FROM LIABILITY OF INCORPORATORS, STOCKHOLDERS, ETC

  	
  114

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  FOURTEEN GUARANTEE

  	
  115

  
	
   

  	
  SECTION 14.01

  	
  GUARANTEE

  	
  115

  
	
   

  	
  SECTION 14.02

  	
  LIMITATION ON
  GUARANTOR LIABILITY

  	
  118

  
	
   

  	
  SECTION 14.03

  	
  SUCCESSORS AND
  ASSIGNS

  	
  118

  
	
   

  	
  SECTION 14.04

  	
  NO WAIVER

  	
  118

  
	
   

  	
  SECTION 14.05

  	
  EXECUTION AND
  DELIVERY OF GUARANTEE

  	
  118

  
	
   

  	
  SECTION 14.06

  	
  GUARANTORS MAY CONSOLIDATE,
  ETC., ON CERTAIN TERMS

  	
  119

  
	
   

  	
  SECTION
  14.07

  	
  RELEASES
  FOLLOWING SALE OF ASSETS OR CAPITAL STOCK

  	
  119

  
	
   

  	
  SECTION
  14.08

  	
  APPLICATION
  OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTORS.

  	
  119

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIFTEEN

  	
  120

  
	
   

  	
  SECTION 15.01

  	
  COLLATERAL; COLLATERAL DOCUMENTS.

  	
  120

  
	
   

  	
  SECTION
  15.02

  	
  VOTING
  RIGHTS AND PAYMENT OF DIVIDENDS AND DISTRIBUTIONS IN RESPECT OF COLLATERAL

  	
  122

  
	
   

  	
  SECTION
  15.03

  	
  RELEASE
  OF COLLATERAL.

  	
  122

  
	
   

  	
  SECTION 15.04

  	
  REMEDIES UPON ACCELERATION

  	
  124

  
	
   

  	
  SECTION 15.05

  	
  FURTHER ASSURANCES AND
  SECURITY

  	
  124

  
	
   

  	
  SECTION 15.06

  	
  OPINIONS
  AS TO RECORDING.

  	
  125

  
	
   

  	
  SECTION
  15.07

  	
  LIMITATION
  ON DUTY OF TRUSTEE IN RESPECT OF THE COLLATERAL PLEDGE.

  	
  125

  
	
   

  	
  SECTION
  15.08

  	
  AUTHORIZATION
  OF ACTIONS TO BE TAKEN BY COLLATERAL AGENT UNDER THE COLLATERAL DOCUMENTS

  	
  126

  
	
   

  	
  SECTION
  15.09

  	
  AUTHORIZATION
  OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE COLLATERAL DOCUMENTS

  	
  126

  
	
   

  	
  SECTION
  15.10

  	
  ASSIGNMENT
  OF RIGHTS, NOT ASSUMPTION OF DUTIES

  	
  127

  

 

v

 

CROSS-REFERENCE
TABLE*

	
  Trust Indenture Act
  Sections

  	
   

  	
  Indenture Section

  
	
  310

  	
   

  	
  7.08

  
	
  310(a)

  	
   

  	
  7.11

  
	
  310(a)(1)

  	
   

  	
  7.08

  
	
  (a)(2)

  	
   

  	
  7.08

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  N.A

  
	
  (b)

  	
   

  	
  7.08

  
	
  310(b)(1)

  	
   

  	
  7.08

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.16

  
	
  (b)

  	
   

  	
  7.16

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  3.07

  
	
  (b)

  	
   

  	
  N.A

  
	
  (c)

  	
   

  	
  N.A

  
	
  313

  	
   

  	
  7.13

  
	
  313(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  7.15

  
	
  (d)

  	
   

  	
  N.A

  
	
  314(a)

  	
   

  	
  N.A.

  
	
  314(a)(4)

  	
   

  	
  5.07

  

 

vi

 

	
  (b)

  	
   

  	
  15.06

  
	
  (c)

  	
   

  	
  15.06

  
	
  (d)

  	
   

  	
  15.03, 15.06

  
	
  (e)

  	
   

  	
  15.06

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
   

  	
  7.02, 7.07, 8.02

  
	
  315(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  7.01(a)

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  7.09

  
	
  316(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  8.02

  
	
  317(a)

  	
   

  	
  6.04

  
	
  (b)

  	
   

  	
  N.A.

  
	
  318(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  N.A.

  

 

N.A. means not applicable

*This Cross-Reference table
shall not, for any purpose, be deemed to be part of the Indenture

 

vii

 

Indenture, dated as of
August 11, 2004, by and among Grupo TMM, S.A., a corporation duly organized and
existing under the laws of the United Mexican States (herein called the “Company”), having its principal
business office at Avenida de la Cúspide, No. 4755, Colonia Parques del
Pedregal, 14010 Mexico, D.F., TMM Holdings, S.A. de C.V., a corporation duly
organized and existing under the laws of the United Mexican States (herein
called “TMM Holdings”),
each of the other Wholly Owned Subsidiaries of the Company that are listed on
Schedule A hereto as being a guarantor (TMM Holdings and each such other Wholly
Owned Subsidiary, together with any other Subsidiary of the Company that
hereafter becomes a Guarantor in accordance with the terms of this Indenture,
are collectively referred to herein as the “Guarantors”),
having their principal business office at Avenida de la Cúspide, No. 4755,
Colonia Parques del Pedregal, 14010 Mexico, D.F., and The Bank of New York,
a New York banking corporation, as Trustee (herein called the “Trustee”), having its principal trust
office at 101 Barclay Street, Floor 21W, New York, New York 10286, Attention:
Global Finance Unit.

The
Company has duly authorized the creation of an issue of Senior Secured  Notes due 2007, such Notes to be issued
initially (i) in connection with the exchange (the “Exchange Offer”) of
certain 91⁄2% Notes due 2003 (the “2003 Notes”) issued by the Company
pursuant to an indenture dated as of May 12, 1993 (as amended and supplemented,
the “2003
Note Indenture”) and of certain 101⁄4% Senior Notes due 2006 (the
“2006
Notes” and, together with the 2003 Notes, the “Existing
Notes”) issued by the Company pursuant to an indenture dated as
of January 25, 2001 (as amended and supplemented, the “2006 Note Indenture”,
and together with the 2003 Note Indenture, the “Existing Indentures”),
(ii) to Promotora Servia in payment of the Existing Servia Payable, (iii) to
the J.B. Hunt Parties pursuant to the J.B. Hunt Letter Agreement in payment of
the obligations of the Company under the J.B. Hunt Note, and (iv) to the
Purchasers pursuant to the Note Purchase Agreement, and to provide therefor,
the Company has duly authorized the execution and delivery of this
Indenture.  All things necessary to make
the Notes, when duly issued and executed by the Company, and authenticated and
delivered hereunder, the valid obligations of the Company and the Guarantors,
and to make this Indenture a valid and binding agreement of the Company and the
Guarantors, have been done.

Each
Holder (including subsequent transferees) of an Initial Private Note will have
the registration rights set forth in the Registration Rights Agreement.

Each
party agrees as follows for the benefit of each other and for the equal and
ratable benefit of the Holders (as defined herein) of the Company’s Senior
Secured Notes due 2007 (the “Notes”).

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01   DEFINITIONS.  For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(1)           the terms defined in this Article
have the meanings assigned to them in this Article and include the plural as
well as the singular;

 

1

 

(2)           all other terms used herein which are
defined in the Trust Indenture Act (as hereinafter defined), either directly or
by reference therein, have the meanings assigned to them therein;

(3)           all accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with IAS (as
hereinafter defined);

(4)           the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision;

(5)           “or” is not exclusive;

(6)           provisions apply to successive events
and transactions;

(7)           unless the context otherwise
requires, any reference to a “clause,” an “Article” or a “Section”, or to an
“Exhibit” or a “Schedule”, refers to a clause, an Article or Section of, or to
an Exhibit or a Schedule attached to, this Indenture, as the case may be;

(9)           unless the context otherwise
requires, any reference to a statute, rule or regulation refers to the same
(including any successor statute, rule or regulation thereto) as it may be
amended from time to time;

(10)         the principal amount of any
non-interest bearing or other discount security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with IAS; and

(11)         the term “including” is not limiting
and means “including, without limitation,” and “including but not limited to.”

“Acquired Indebtedness” means
Indebtedness of a Person existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person and not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary or such acquisition.

“Additional
Amounts” shall have the meaning assigned to such term in Section
2.03.

“Additional
Notes” means any Notes issued by the Company in payment of any
portion of the interest due on Outstanding Notes pursuant to Section 3.01(c).

“Adjusted
Net Assets” of a Guarantor at any date means the amount by which
the fair value of the assets and property of such Guarantor exceeds the total
amount of liabilities, including, without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under any Guarantee, of such
Guarantor at such date.

 

2

 

“ADRs” means the American Depositary
Receipts evidencing ADSs issued pursuant to the Deposit Agreement, dated
December 26, 2001, among the Company, Citibank, N.A., as depositary, and
certain owners of ADSs.

“ADSs”
means American depositary shares of the Company, each of which represents one
CPO issued by the Company and held by the CPO Trustee.

“Affiliate” of any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person.  For the purposes of this definition,
“control” when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Affiliate Transaction” shall have the
meaning assigned to such term in Section 5.13.

“Agent”
means any Note Registrar, Paying Agent or co-registrar.

“Agreed Discount Rate” means, with
respect to any Indebtedness to be Incurred pursuant to Section 5.14(b)(vii)(C)
or Section 5.14(b)(ix), the effective annual interest rate (taking into account
any discount on the issuance of such Indebtedness and any payments made in
respect of such Indebtedness) on  the
Indebtedness to be Incurred.

“Applicable
Procedures” means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“Asset Disposition” means any sale,
lease, conveyance, transfer or other disposition (or series of related sales,
leases, conveyances, transfers or dispositions) by the Company or any
Restricted Subsidiary of (x) any Capital Stock of a Restricted Subsidiary
of the Company (whether or not upon issuance), or (y) any other property
or assets (each referred to for the purposes of this Indenture as a “disposition”) whether for cash or
other consideration, other than (i) a disposition by a Restricted Subsidiary of
the Company to the Company or to a Wholly Owned Subsidiary of the Company, (ii)
a disposition by the Company to a Wholly Owned Subsidiary of the Company, (iii)
a disposition by a Restricted Subsidiary to a Wholly Owned Subsidiary of such
Restricted Subsidiary, (iv) the disposition in any single transaction or
series of transactions of any assets or Capital Stock or other ownership
interest in the ordinary course of business by the Company or its Restricted
Subsidiaries if the gross proceeds thereof do not exceed $500,000 (such
proceeds, to the extent not in cash, to be determined in good faith by the
Board of Directors) in any 12-month period, (v) an exchange of assets, provided the assets received are to be
used in the lines of business engaged in by the Company or any of its
Restricted Subsidiaries on the Initial Issuance Date or reasonably related
extensions of such lines of business, (vi) a Qualifying Disposition or
other disposition that is governed by Article Eleven, (vii) a disposition
of assets in one or a series of related transactions which are no longer used
or, in the reasonable opinion of the Company (which, in the case of each
disposition for gross proceeds in excess of $500,000 will be evidenced by a
Board Resolution as set forth in an 

 

3

 

Officers’ Certificate delivered to the Trustee) useful in the business
of the Company or any Restricted Subsidiary, provided the aggregate gross
proceeds of all such dispositions of assets pursuant to this clause (vii) do
not exceed $10 million, or (viii) a disposition pursuant to a Qualifying PEMEX
Securitization Transaction; provided, in the case of any disposition
pursuant to clauses (i), (ii) or (iii) by the Company or by any Restricted
Subsidiary that is a Guarantor, that the Wholly Owned Subsidiary receiving such
assets which was not previously a Guarantor executes and delivers a
supplemental indenture providing for a Guarantee of the Notes as provided in
Section 5.23 or Article Fourteen.

“Associate” shall have the meaning
assigned to such term in Rule 12b-2 of the rules and regulations of the
Commission promulgated under the Exchange Act.

“Attributable Debt” means, with respect
to a sale and leaseback transaction, as at the time of determination, the
greater of (i) the fair market value of the property subject to such sale
and leaseback transaction (as set forth in a Board Resolution) and
(ii) the present value (discounted at the interest rate borne by the Notes
(assuming the Company pays the minimum cash required to be paid thereon),
compounded annually) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been extended).

“Authenticating Agent” means any agent
of the Trustee which at any time shall be appointed and acting pursuant to the
provisions of Section 7.12.

“Average Life” means as of the date of
determination, with respect to any debt security, the quotient obtained by
dividing (i) the sum of the products of the number of years (calculated to the
nearest one-twelfth) that will elapse from the date of determination to the
dates of each then remaining installment, sinking fund or other required
scheduled principal payment of such debt security multiplied by the amount of
each such principal payment by (ii) the sum of all such principal payments.

“Bankruptcy Law” shall have the meaning
assigned to such term in Section 6.01(7).

“Benefited Party” shall have the
meaning assigned to such term in Section 14.01.

“Board of Directors” means the Board of
Directors of any Person, or any duly authorized committee of such Board or any
officers of such Person duly authorized so to act by such Board; provided, that if the transaction giving
rise to the need for action by the Board of Directors of such Person, together
with any related transactions, involve aggregate value or consideration in
excess of $10 million, “Board of Directors” means the entire Board of Directors
of such Person and not a committee of such Person or an officer of such Board; provided, further,
that any action required to be taken by the Board of Directors of the Company
or any of its Restricted Subsidiaries with respect to the sale or sale and
leaseback of any individual vessel may be taken by the Executive Committee of
such Board of Directors.

“Board Resolution” means a copy of a
resolution or resolutions certified by the Secretary or an Assistant Secretary
of any Person to have been duly adopted by the Board of Directors, or by the
Executive Committee of the Board of Directors or any other committee of

 

4

 

such Person to the extent that such other committee has been authorized
by the Board of Directors to adopt a “Board Resolution” for purposes hereof,
and to be in full force and effect on the date of such certification, or a
certificate executed by officers of such Person to the extent that such
officers have been authorized to act for purposes hereof setting forth the
action taken by such officers and stating that the officers are duly authorized
to take such action, in each case as filed with the corporate records of such
Person.

“Business Day” means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York, New York are authorized or obligated by or pursuant
to law, regulation or executive order to close.

“Capitalized Lease Obligation” of any
Person means any obligation of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real or personal
property that is required to be classified and accounted for as a capital lease
obligation on a balance sheet of such Person under IAS and, for purposes of
this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with
IAS.  For purposes of this definition,
with respect to the Company, “Person” shall mean the Company or any Restricted
Subsidiary, as the case may be.

“Capital Stock” of any Person means any
and all shares, interests, participations or other equivalents (however
designated) of such Person’s capital stock and warrants, options and similar
rights to acquire such capital stock (other than debt securities convertible or
exchangeable for such capital stock).

“Cash Equivalents” means (i) any
evidence of indebtedness, maturing not more than one year after the date of
purchase, issued or fully guaranteed or insured by the United Mexican States,
the United States of America, or an instrumentality or agency thereof, (ii) any
certificate of deposit, Eurodollar time deposit, overnight bank deposit or
bankers’ acceptance maturing not more than one year after the date of purchase,
issued by, or time deposit of, a commercial banking institution which has
combined capital and surplus and undivided profits of not less than
$100,000,000, (iii) commercial paper, maturing not more than 180 days after the
date of purchase, issued by a corporation (other than an Affiliate of the
Company) organized and existing under the laws of the United Mexican States or
the United States of America or any State thereof or the District of Columbia
which is rated, at the time as of which any investment therein is made, “P-1”
(or higher) by Moody’s or “A-l” (or higher) by Standard & Poor’s, 

(iv) money market funds and (v) deposits with financial institutions available
for withdrawal on demand.

“Cash Interest Rate” shall have the
meaning assigned to such term in Section 3.01(c)(i).

“Change of Control” shall have the
meaning assigned to such term in Section 5.16.

“Clearstream”
means Clearstream Banking, société anonyme.

“CNBV” means the Comisión Nacional
Bancaria y de Valores of the United Mexican States, or any successor Person
under applicable law.

 

5

 

“Collateral”
shall have the meaning assigned to such term in Section 15.01.

“Collateral
Agent” means the beneficiary, depositary, collateral agent or
Person acting in a similar capacity, as the case may be, under the Collateral
Documents, until a successor beneficiary, depositary, collateral agent or
Person acting in a similar capacity, as the case may be, shall have become such
pursuant to the Collateral Documents, and thereafter “Collateral Agent”
shall mean such successor beneficiary, depositary, collateral agent or Person
acting in a similar capacity, as the case may be.  Unless otherwise required by applicable law, the Collateral Agent
shall initially be the Trustee.

“Collateral Documents”
means, collectively, (i) the Irrevocable Administration and Guaranty Trust
Agreement No. F/00088 dated as
of the Initial Issuance Date, among TMM
Multimodal and Inmobiliaria TMM, S.A. de C.V., as settlors, the Trustee,
as first beneficiary, and Banco J.P. Morgan, S.A., Institución de
Banca Múltiple, JP Morgan Grupo Financiero (“JP Morgan Bank”), as collateral agent
and guaranty trustee, relating to the Capital Stock of TMM Multimodal (the “TMM
Multimodal Trust Agreement”), (ii) the Irrevocable Administration and
Guaranty Trust Agreement No. F/00087 dated as of the Initial Issuance Date, among the Company, the other settlors
named therein,  the Trustee, as first beneficiary, and  JP
Morgan Bank, as collateral agent and guaranty trustee, relating
to the Capital Stock of Subsidiaries of the Company and of the Guarantors and
other assets, (iii) the Mexican Pledge Agreement Without Transfer of Possession
dated as of the Initial Issuance Date,
among the Company, the other pledgors named therein,  the Trustee,
as pledgee, and JP Morgan Bank, as collateral agent
and pledge trustee, (iv) the Collateral Agency Agreement dated as of the Initial Issuance  Date among the Company, the Trustee and JP Morgan Bank and (v) any other security
agreements, trusts or other arrangements from time to time providing for the
pledge of or other grant of a Lien with respect to Collateral to secure the
Notes, the Guarantees, this Indenture and the Collateral Documents, by and
among the Company, the Guarantors, the Trustee and the Collateral Agents, as
applicable, in each case as same may be amended, modified and/or supplemented
and in effect from time to time.

 

“Collateral
Pledge” means the pledge of or other grant of a Lien with
respect to Collateral pursuant to this Indenture and the Collateral Documents
to secure the obligations of the Company and the Guarantors under the Notes,
the Guarantees, this Indenture and the Collateral Documents.

“Commission” means the Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

“Company” means the Person named as the
“Company” in the first paragraph of this Indenture until a successor Person or
Persons shall have become such pursuant to the applicable provisions of this
Indenture and thereafter “Company” shall mean such successor
Person.

 

6

 

“Company Request” or “Company Order” means a written request
or order signed in the name of the Company by its Chief Executive Officer, its
Director General, its Chief Operating Officer, or its Chief Financial Officer,
and by its Director of Administration, its Treasurer or any other duly
authorized officer, and delivered to the Trustee.

“Consolidated
Amortization Expense” of any Person means, for any period, the
amortization expense of such Person and its Subsidiaries, determined on a
consolidated basis for such period in accordance with IAS.  For purposes of this definition, with
respect to the Company, “Person” shall mean the Company, and “Subsidiaries”
shall mean Restricted Subsidiaries.

“Consolidated
Cash Flow Available for Interest Expense” of any Person means,
for any period, the sum (without duplication) of the amounts for such period of
(i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
Consolidated Income Tax Expense, (iv) Consolidated Depreciation Expense, (v)
Consolidated Amortization Expense and (vi) other non cash items reducing
(which shall be added back) or increasing (which shall be subtracted)
Consolidated Net Income, all as determined on a consolidated basis for such
Person and its Subsidiaries for such period in accordance with IAS.  For purposes of this definition, with
respect to the Company, “Person” shall mean the Company, and “Subsidiaries”
shall mean Restricted Subsidiaries.

“Consolidated
Debt Service Coverage Ratio” of any Person means the ratio of
(i) the aggregate amount of Consolidated Cash Flow Available for Interest
Expense of such Person for the four full fiscal quarters for which financial
information in respect thereof is available immediately prior to the date of
the transaction giving rise to the need to calculate the Consolidated Debt
Service Coverage Ratio (the “Transaction Date”) to (ii) the
aggregate Consolidated Interest Expense of such Person for such four fiscal
quarter period; provided that in making the calculation of Consolidated
Interest Expense for purposes of this clause (ii), interest on any Indebtedness
(whether existing or being incurred) bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period unless such Person is a party to an
Interest Rate Agreement which will be in effect for at least 12 more months and
which has the effect of reducing the rate below the rate on the date of
computation, in which case such lower rate shall be used.  For purposes of this definition, “Consolidated
Cash Flow Available for Interest Expense” and “Consolidated
Interest Expense” shall be calculated after giving effect on a
pro forma basis for the period of such calculation to (i) the incurrence
of any Indebtedness of such Person or any Subsidiary of such Person during the
period commencing on the first day of the four full fiscal quarters immediately
preceding the Transaction Date for which financial information in respect
thereof is available to and including the Transaction Date (the “Reference
Period”), (ii) the repayment of any Indebtedness of such Person
or a Subsidiary of such Person during the Reference Period with the proceeds of
any Indebtedness referred to in the immediately preceding clause (i) or the
proceeds from the sale or other disposition of assets referred to in clause
(iv) below, (iii) the acquisition by such Person or any Subsidiary of such Person
during the Reference Period of any other Person which, as a result of such
acquisition, becomes a Subsidiary of such Person or the acquisition of assets
during the Reference Period from any Person which constitutes all or
substantially all of an operating unit or business of such Person and (iv) any
sale or other disposition of assets or properties outside the ordinary course
of business by such Person occurring during the Reference Period, as if such

 

7

 

incurrence, repayment, acquisition, sale or disposition occurred on the
first day of the Reference Period.  For
purposes of this definition, with respect to the Company, “Person” shall mean
the Company, and “Subsidiary” shall mean a Restricted
Subsidiary.

“Consolidated
Depreciation Expense” of any Person means, for any period, the
depreciation and depletion expense of such Person and its Subsidiaries,
determined on a consolidated basis for such period in accordance with IAS.  For purposes of this definition, with
respect to the Company, “Person” shall mean the Company, and “Subsidiaries”
shall mean Restricted Subsidiaries.

“Consolidated
Income Tax Expense” of any Person means, for any period, the
aggregate of the income tax expense of such Person and its Subsidiaries,
determined on a consolidated basis for such period in accordance with IAS.  For purposes of this definition, with
respect to the Company, “Person” shall mean the Company, and “Subsidiaries”
shall mean Restricted Subsidiaries.

“Consolidated
Interest Expense” of any Person means, for any period, the
aggregate of (a) the interest expense of such Person and its Subsidiaries
(including, without limitation, amortization of the issuance cost of any
Indebtedness other than the Notes, original issue cost of any Indebtedness
other than the Notes, original issue discount on any Indebtedness, the interest
portion of any deferred payment obligation in accordance with the effective
interest method of accounting, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financings and
the net cost associated with Interest Rate Agreements to the extent attributed
to such period), and (b) the interest expense of such Person and its
Subsidiaries with respect to guaranteed Indebtedness (to the extent not
included in clause (a) above), all as determined on a consolidated basis for
such period in accordance with IAS. For purposes of this definition, with
respect to the Company, “Person” shall mean the Company, and “Subsidiaries”
shall mean Restricted Subsidiaries.

“Consolidated Net Income” of a Person
means, for any period, the aggregate of the net income or loss of such Person
and its Subsidiaries for such period, determined on a consolidated basis in
accordance with IAS, provided that (i) the net income (or loss)
of any person which is not a Subsidiary of such Person (or is deemed not to be
a Subsidiary of such Person) or which is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of cash
dividends or distributions paid by such person or its consolidated subsidiaries
to such Person in such period, (ii) the net income (or loss) of any Subsidiary
that is subject to any restriction or limitation on the payment of dividends
and other distributions (including loans or advances) by operation of the terms
of its charter or by agreement, instrument, judgment, decree, order or
governmental regulation applicable to the Subsidiary shall be excluded to the
extent of such restriction or limitation in such period, (iii) the net income
(or loss) of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iv) any cash
gains or losses attributable to dispositions of capital assets shall be
included, including provisions for any such dispositions, and any non-cash
extraordinary items shall be excluded, and (v) the net income (or loss) from
discontinued operations shall be excluded. For purposes of calculating “Consolidated
Net Income” of the Company for any period, each reference in the
foregoing definition to a “Subsidiary” or “Subsidiaries” shall
be deemed a reference to a Restricted Subsidiary.

 

8

 

“Consolidated Net Worth” means, with
respect to any Person, as at any date of determination, consolidated
stockholders’ equity of such Person and its Subsidiaries determined on a
consolidated basis in accordance with IAS, but excluding (to the extent
included in computing such consolidated stockholders’ equity) any amounts
attributable to Disqualified Stock of such Person.  For purposes of this definition, with respect to the Company,
“Person” shall mean the Company, and “Subsidiaries” shall mean Restricted
Subsidiaries.

“Corporate Trust Office” means the
principal office of the Trustee at which at any particular time its corporate
trust business shall be principally administered, which office as of the date
of execution of this Indenture is 101 Barclay Street, Floor 21W, New York, New
York 10286, Attention:  Global Finance
Unit.

“CPOs” means the Company’s outstanding certificados de participación ordinarios,
or any securities of the Company issued in replacement thereof.

“CPO Trustee” means the trustee with
respect to the Company’s outstanding CPOs issued pursuant to the Trust
Agreement, dated as of November 19, 1989, between Nacional Financiera, S.N.C.
and the Company.

“Currency Agreement” means any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement.

“Custodian”
means the Trustee, in its capacity as custodian with respect to the Notes in
global form, or any successor entity thereto.

“Default” means any event which is, or
after notice or passage of time or both would be, an Event of Default.

“Default Rate” shall have the meaning
assigned to such term in Section 6.02.

“Defaulted Interest” shall have the
meaning assigned to such term in Section 3.10.

“Definitive
Note” means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 3.08 hereof.

“Depositary”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in Section 3.05 hereof as the Depositary with
respect to the Notes, and any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the applicable
provisions of this Indenture.

“Designated Investment Bank” means the
United States-based branch of any of the following  investment banks selected by the Company: Bear Stearns & Co.,
Credit Suisse First Boston Corporation, Houlihan Lokey Howard & Zukin
Capital, J.P. Morgan Securities, Lehman Brothers, Merrill Lynch & Co. or
Morgan Stanley & Co., or their respective successors, provided, that such investment bank has
not been engaged to render investment banking services to the Company or KCS or
their respective subsidiaries in the six months preceding the date of delivery
of

 

9

 

such opinion and agrees not to render investment banking services to
the Company or KCS or their respective subsidiaries in the six month period
following the date of delivery of such opinion; provided, however, that
notwithstanding the limitation of the foregoing proviso, J.P. Morgan Securities
may render services to the Company with respect to the transactions covered by
the engagement letter, dated as of October 1, 2001, between the Company and
J.P. Morgan Securities.

“Disqualified Stock” of any Person
means any Capital Stock of such Person that, by its terms (or by the terms of
any security into which it is convertible or for which it is exercisable,
redeemable or exchangeable), matures, or is mandatorily redeemable, pursuant to
a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to August 1, 2008, except to
the extent that such Capital Stock is solely redeemable with or exchangeable
for, either mandatorily or at the option of such Person, any Capital Stock of
such Person that is not Disqualified Stock.

“Distribution Compliance Period” means,
with respect to any Notes, the period of 40 consecutive days beginning on and
including the later of (i) the day on which such Notes are first offered
to Persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the issue date with respect to such
Notes.

“Dollars”
or “$”
means the currency of the United States of America.

“DTC”
means The Depository Trust Company, a New York corporation, and any successors
thereto.

 “Euroclear” means Euroclear Bank
S.A./N.V., as operator of the Euroclear System.

“Event of Default” shall have the
meaning assigned to such term in Section 6.01.

“Excess Proceeds” shall have the
meaning assigned to such term in Section 5.18(d).

“Excess Proceeds Offer” shall have the
meaning assigned to such term in Section 5.18(d).

“Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, or any successor act.

“Exchange Transaction” shall have the
meaning assigned to such term in Section 5.18(e).

“Existing Servia Payable” means the
obligations in the amount of $6,500,000 payable by the Company to Promotora
Servia pursuant to the terms of (i) the Tax
Benefits Agreement dated December 5, 2001, between the Company and
Promotora Servia, and (ii) the Termination Agreement dated August 23, 2001,
between the Company and Promotora Servia, as amended and supplemented by
amendments, dated October 11, 2001 and August 27, 2002.

“Extension Election”
shall have the meaning assigned to such term in Section 3.01(b).

 

10

 

“Extension Fee”
shall have the meaning assigned to such term in Section 3.01(b).

                                “Global Note” shall have the meaning
assigned to such term in Section 2.01.

 

“Global Note Legend” means the legend
set forth in Section 2.02, which is required to be placed on all Global Notes
issued under this Indenture.

“GM Put” means the obligation of the
Company and its Subsidiaries to repurchase shares of Capital Stock of TMM
Multimodal pursuant to the Stockholder Agreement dated as of June 30, 2000,
between the Company, TMM Multimodal and EMD Holdings, Inc.

“Group” shall have the meaning assigned
to such term in Section 5.16.

“Grupo TFM” means Grupo Transportación
Ferroviaria Mexicana, S.A. de C.V., a corporation organized and existing under
the laws of the United Mexican States.

“GTFM Disposition” means any (i) sale,
conveyance, transfer or other disposition (or series of related sales,
conveyances, transfers or other dispositions) of the Capital Stock or assets of
TMM Holdings, TMM Multimodal, Grupo TFM, or TFM (or any successor of any of
them), (ii) merger or consolidation  (or
approval of any merger or consolidation) with or of TMM Holdings, TMM
Multimodal, Grupo TFM or TFM (or any successor of any of them), or (iii) issuance of Capital Stock of (x) TMM
Holdings or TMM Multimodal (or any successor of either of them), or (y) Grupo
TFM or TFM (or any successor of either of them).  In the case of any issuance of Capital Stock under clause
(iii)(y), the Net Cash Proceeds of such GTFM Disposition shall mean the amount
of any dividends or distributions received by the Company or any Restricted
Subsidiary from Grupo TFM or TFM (or any successor of either of them) on or
after the date of such issuance of Capital Stock of Grupo TFM or TFM (or any
successor of either of them), less the amount of all foreign, Federal, state
and local taxes payable by the Company or any Restricted Subsidiary as a direct
consequence of such GTFM Disposition, including in connection with the payment
of such dividends or distributions (including, without limitation, taxes
withheld in connection with repatriation of such proceeds), net of any tax
benefits derived in respect of such GTFM Disposition or such dividends or
distributions (referred to herein as “group-level
taxes”); provided  that
the amount of such Net Cash Proceeds shall be limited to (A) the product of (1)
the Company’s and its Restricted Subsidiaries’ percentage economic interest in
Grupo TFM and TFM at the time of the issuance of such Capital Stock or at the
time such dividends or distributions are made, whichever is greater, and (2)
the net proceeds received by Grupo TFM or TFM from the issuance of such Capital
Stock (net of all foreign, Federal, state and local taxes paid by Grupo TFM or
TFM as a direct consequence of the receipt by Grupo TFM or TFM of proceeds from
the issuance of Capital Stock, including in connection with the payment of such
dividends or distributions (including, without limitation, taxes withheld in
connection with repatriation of such proceeds), net of any tax benefits derived
in respect of such dividends or distributions), less (B) the amount of any
group-level taxes deducted from Net Cash Proceeds pursuant to this
provision.  There shall be no
duplication of any taxes that are otherwise deducted pursuant to the preceding
sentence.  Net Cash Proceeds as
determined under clause (iii)(y) shall be in addition to, and not in lieu of or
in substitution for, any VAT Proceeds that may be calculated based on dividends
or distributions by Grupo TFM or TFM to the Company or any Restricted
Subsidiary.

 

11

 

“Guarantee” means, as applied to any
Indebtedness of any other Person (the “Primary Obligor”), (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such Indebtedness or (ii) an agreement, direct or indirect, contingent
or otherwise, (A) providing assurance of the payment or performance (or payment
of damages in the event of non-performance) of any part or all of such
Indebtedness, including, without limiting the foregoing, reimbursement
obligations with respect to amounts drawn on letters of credit, (B) to purchase
property, securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness, or (C) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the Primary Obligor so as to enable the Primary Obligor to pay such
Indebtedness.  Notwithstanding anything
herein to the contrary, a Guarantee shall not include any agreement providing
for indemnification.  The amount of a
guarantee shall be deemed to be the maximum amount of the Indebtedness
guaranteed for which the guarantor could be held liable under such
guarantee.  When used with respect to
the Notes, a “Guarantee” means the guarantee by the Guarantors of all or any
part of the Notes, in accordance with Article Fourteen.

“Guarantee Obligations” shall have the
meaning assigned to such term in Section 14.01.

“Guarantors” means those Persons named
as the “Guarantors” in the first paragraph of this Indenture and their
respective successors and assigns, and any other Person that pursuant to
Section 5.23 or Article Fourteen is required to provide a Guarantee of the
Company’s obligations under the Notes, this Indenture and the Collateral
Documents.

“Holder” means a Person in whose name a
Note is registered in the Note Register.

“IAI Global Note” means a Global
Note bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of the Depositary and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes issued in reliance on Rule 506(a).

“IAS” means accounting principles
issued by the International Accounting Standards Committee as in effect from
time to time; provided, that with
respect to the obligations of the Company under Articles Five and Eleven, “IAS”
means accounting principles issued by the International Accounting Standards
Committee as in effect on the date of this Indenture, in each case, as consistently
applied by the Company.

“Incurrence” shall have the meaning
assigned to such term in Section 5.14(a).

“Indebtedness” with respect to any
Person means (without duplication) any liability, whether or not contingent,
(i) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof) or
evidenced by bonds, notes, debentures or similar instruments, or (ii)
representing the balance deferred and unpaid of the purchase price of any
property, conditional sales obligations and obligations under any title
retention agreement (but excluding trade account payables and other accrued
current liabilities arising in the ordinary course of business), and shall also
include

 

12

 

(without duplication) (a) any Capitalized Lease Obligations, (b) the
maximum fixed repurchase price of any Disqualified Stock of such Person, (c)
obligations of others secured by a Lien to which any property or asset,
including leasehold interests under Capitalized Lease Obligations and any other
tangible or intangible property rights, owned or held by such Person is
subject, whether or not the obligation secured thereby shall have been assumed
(provided, that, if the
obligations have not been assumed, such obligations shall be deemed to be in an
amount equal to the lesser of (x) the amount of the obligation so secured
and (y) the fair market value of the property or properties to which the
Lien relates, as determined in good faith by the Board of Directors of such
Person and as evidenced by a Board Resolution), (d) reimbursement obligations
in respect of letters of credit (other than letters of credit issued for the
benefit of trade creditors in the ordinary course of business of such Person in
connection with obtaining goods, materials or services), (e) net obligations
under Interest Rate Agreements or similar agreements or Currency Agreements of
such Person, (f) Attributable Debt, and (g) guarantees with respect to the
foregoing items (regardless of whether the foregoing items would appear as a
liability on a balance sheet of such Person prepared on a consolidated basis in
accordance with IAS); provided,
that, for the purpose of computing the amount of Indebtedness of such Person
outstanding at any time, such items shall be excluded to the extent that they
would be eliminated as intercompany items for purposes of such Person’s
consolidated financial statements. For purposes of the preceding sentence, the
“maximum fixed repurchase price” of any Disqualified Stock which does not have
a fixed repurchase price shall be calculated in accordance with the terms of
such Disqualified Stock as if such Disqualified Stock were purchased on any
date on which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock (or any equity security for which it may be
exchanged or converted), such fair market value shall be determined in good
faith by the Board of Directors of such Person and evidenced by a Board
Resolution.  The amount of Indebtedness
of any Person at any date will be the outstanding balance at such date of all
unconditional obligations of such Person described above and the maximum
liability, assuming the occurrence of the contingencies giving rise to the
obligation, of any contingent obligations of such Person described above.  Notwithstanding anything in this definition
to the contrary, “Indebtedness” shall not include (i) customer advance payments
and customer deposits received by the Company or any Restricted Subsidiary in
the ordinary course of business or (ii) revenue and costs of voyages in
process.

“Indenture” means this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.

“Initial Issuance Date” means the date
of this Indenture.

“Initial
Notes” means the Senior Secured Notes due 2007 issued on the
Initial Issuance Date (i) pursuant to the Exchange Offer, (ii) to Promotora
Servia in payment of the Existing Servia Payable, (iii) to the J.B. Hunt
Parties pursuant to the J.B. Hunt Letter Agreement in payment of the
obligations of the Company under the J.B. Hunt Note, and (iv) to the Purchasers
pursuant to the Note Purchase Agreement.

“Initial Private Notes” means the
Initial Notes issued (i) in reliance on Rule 144A, Rule 506(a) and Regulation S
pursuant to the Exchange Offer, (ii) to Promotora Servia in

 

13

 

payment of the Existing Servia Payable, (iii) to the J.B. Hunt Parties
pursuant to the J.B. Hunt Letter Agreement in payment of the obligations of the
Company under the J.B. Hunt Note, and (iv) to the Purchasers pursuant to the
Note Purchase Agreement.

“Institutional Accredited
Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.

“Interest Payment Date” means the
Stated Maturity of an installment of interest on the Notes.

“Interest Rate Agreement” means any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement,
option or future contract or other similar agreement or arrangement.

“Investment” means any direct or
indirect advance, loan or other extension of credit or capital contribution to
(by means of any transfer of cash or other property (other than Capital Stock
of the Company which is not Disqualified Stock) to any other Person or any
payment for property or services for the account or use of any other Person),
or any purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities issued to any other Person. 
For the purposes hereof, the amount of any Investment shall be the
original cost of such Investment, plus the cost of all additions thereto, but
without any other adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment; and shall
be reduced by the payment of dividends or distributions in connection with such
Investment or any other amounts received in respect of such Investment.  In determining the amount of any Investment
involving a transfer of any property or asset other than cash, such property
shall be valued at its fair market value at the time of such transfer, as
determined in good faith by the board of directors (or comparable body) of the
Person making such transfer.  If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Capital Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Capital Stock of such Restricted Subsidiary not
sold or disposed of unless the transferee of the Capital Stock of such
Restricted Subsidiary is a direct or indirect Wholly-Owned Subsidiary.

“J.B. Hunt Parties”  means J.B. Hunt Transport, Inc. and L.A.,
Inc. (“L.A.”).

“J.B. Hunt Agreement” means the
Memorandum of Agreement, dated as of February 28, 2002, as amended by the
Amendment to the Memorandum of Agreement, dated as of December 20, 2002, and
the Second Amendment to the Memorandum of Agreement, dated as of October 14,
2003, entered into by and among the J.B. Hunt Parties, the Company,
Comercializadora Internacional de Carga, S.A. de C.V. (“CIC”) and TMM
Logistics, S.A. de C.V. (“TMML”), as amended through the Initial Issuance Date.

“J.B. Hunt Letter Agreement” means that
certain letter agreement, dated as of June 30, 2004, entered into by and among
the J.B. Hunt Parties, the Company, CIC and TMML.

 

14

 

“J.B. Hunt Note” means the
Promissory Note issued as of February 28, 2004, of TMM Logistics, S.A. de C.V.
in favor of L.A., Inc., a
subsidiary of J.B. Hunt, in the original principal amount of $18,112,830.00,
pursuant to the J.B. Hunt Agreement, as amended through the Initial Issuance
Date.  As of the Issuance Date, there
was $13,584,622.50 aggregate principal amount outstanding under the J.B. Hunt
Note, plus accrued and unpaid interest.

 

“KCS”
means Kansas City Southern, a Delaware corporation, and its subsidiaries.

“KCS
Transaction” means the transactions contemplated by that certain
Acquisition Agreement dated as of April 21, 2003, by and among KCS, Kara Sub,
Inc., the Company, TMM Holdings and TMM Multimodal.

“Lien” means any lien, mortgage, deed
of trust, fideicomiso de garantía,
pledge, assignment (including any assignment of rights to receive payments of
money), security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement or any lease in the nature
thereof), including the creation of any interest in or option on or based on
the value of any asset, and any agreement to give a lien, mortgage, deed of
trust, fideicomiso de garantía,
pledge, assignment (including any assignment of rights to receive payments of
money), security interest, charge or other encumbrance of any kind, or to
create any interest in or option on or based on the value of any asset.  The term “Lien” shall also include any
restriction on the disposition or pledge of any securities, interests or assets
imposed by applicable law or by contract, including, without limitation,
securities received in connection with any Qualifying Disposition and interests
arising in connection with any joint venture agreement, shareholders agreement,
partnership agreement or similar agreement.

“Maturity,” when used with respect to
any Note, means the date on which the principal (or a portion thereof) of such
Note becomes due and payable as therein or herein provided, whether at Stated
Maturity or by declaration of acceleration, call for redemption or otherwise,
including any date to which the Maturity may be extended pursuant to
Section 3.01.

“Mexican
Government” means the Federal government of the United Mexican
States, including any agency, authority, instrumentality or political
subdivision thereof.

“Minimum Cash Rate” shall have the
meaning assigned to such term in Section 3.01(c)(i).

“Moody’s” means Moody’s Investors
Service, Inc. or any successor thereto.

“Net Cash Proceeds” means cash payments
in U.S. dollars or a currency freely convertible into U.S. dollars received by
the Company or any of its Restricted Subsidiaries (including (x) any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise or amounts eliminated from any reserve
referred to in clause (v) below, but only as and when received or eliminated,
(y) any cash dividends or other cash distributions received by the Company or
any of its Restricted Subsidiaries, and (z) any cash payments received upon the
disposition of any non-cash proceeds of any Asset Disposition or Qualifying
Disposition but only as and when received) from any Asset Disposition or

 

15

 

Qualifying Disposition after the Initial Issuance Date (after repayment
of any Indebtedness owed to any Person that becomes due by reason of such Asset
Disposition or Qualifying Disposition other than (A) Indebtedness owed to an
Affiliate or Associate of the Company (other than (x) obligations arising in
the ordinary course of business consistent with past practice owed to a
Restricted Subsidiary that is not a Wholly Owned Subsidiary and (y) any
payments required to be made on the Notes), (B) Indebtedness under the
Receivables Securitization Facility except to the extent permitted by Section
5.18 and (C) Indebtedness of the Company or any Guarantor that ranks junior to
the Notes or the Guarantees, respectively), in each case net of the amount of
(i) brokers’ and advisors’ fees and commissions payable in connection with such
Asset Disposition or Qualifying Disposition, (ii) all foreign, Federal, state
and local taxes payable as a direct consequence of such Asset Disposition or
Qualifying Disposition, including in connection with the payment of a dividend,
or the making of a distribution, by a consolidated Subsidiary of the Company of
such cash payments to the Company or any consolidated Subsidiary of the Company
(including, without limitation, taxes withheld in connection with repatriation
of such proceeds), net of any tax benefits derived in respect of such dividend
or distribution, (iii) the fees and expenses attributable to such Asset
Disposition or Qualifying Disposition to the extent not included in clause (i),
except to the extent payable to any Affiliate or Associate of the Company, (iv)
any amount required to be paid to any Person (other than the Company or any of
its Restricted Subsidiaries) owning a beneficial interest in the property or
assets sold, and (v) deduction of appropriate amounts to be provided by the Company
or its Restricted Subsidiaries as a reserve, in accordance with IAS, against
any liabilities retained or created by the Company or any Restricted Subsidiary
of the Company associated with such assets after such Asset Disposition or
Qualifying Disposition, including, without limitation, any indemnification
obligation or purchase price adjustment associated with such Asset Disposition
or Qualifying Disposition. For purposes of the foregoing, Net Cash Proceeds
shall be deemed to include awards of compensation for any asset or property or
group thereof taken by condemnation or eminent domain and insurance proceeds
for the loss of or damage to any asset or property; provided that any such
awards or proceeds that do not exceed $10 million in the aggregate shall not be
deemed to be Net Cash Proceeds unless within 180 days after the receipt thereof
such asset or property has not been replaced or repair or construction has not
commenced, provided, however,
that if, at any time such repair or construction is abandoned or otherwise
discontinued prior to completion or is not diligently pursued, such remaining
awards or proceeds, as the case may be, shall constitute Net Cash Proceeds at
such time.

“Non-U.S. Person” means a Person
who is not a U.S. Person.

“Note Linked Securities” means that
certain Note Linked Security Representing The Right To Purchase American
Depositary Shares of the Company, dated as of May 29, 2002, issued to certain
holders in connection with that certain Securities Purchase Agreement, dated as
of May 6, 2002, by and between the Company and certain investors, and that
certain Senior Convertible Note of the Company issued thereunder, dated as of
May 29, 2002.

“Note Purchase Agreement” means that
certain Purchase Agreement, dated as of July 29, 2004, entered into by and
among the Company, the Guarantors and the Purchasers, as such agreement may be
amended, modified or supplemented from time to time.

 

16

 

“Note Register” and “Note Registrar” shall have the
respective meanings specified in Section 3.05.

“Notes” means, collectively, the
Initial Notes and the Additional Notes treated as a single class of securities,
as amended or supplemented from time to time in accordance with the terms of
this Indenture.

“Notice of
Sale” means each of, or all of, as the context shall require,
the notice of sale, foreclosure request or similar notice to be delivered
pursuant to Section 6.03 by the Trustee to the applicable Collateral Agent in
accordance with the Collateral Documents in the form annexed to the applicable
Collateral Document.

“Offer” shall have the meaning assigned
to such term in Section 5.16.

“Officers’ Certificate” means a
certificate signed by the Chairman of the Board of Directors, a Vice Chairman
of the Board of Directors, the Director General, the President, or any Vice
President, and the Director of Administration, the Treasurer, the Secretary or
any Assistant Treasurer or Assistant Secretary, of the Company, and delivered
to the Trustee.  Each such Officers’
Certificate shall comply with Section 1.02.

“Offset Amount” means, in respect of,
or in satisfaction of the obligations of Grupo TFM, the Company or any
Restricted Subsidiary in respect of, the Put, any amounts that (i) are paid or
agreed to be paid by the Company, any Restricted Subsidiary, Grupo TFM, TFM or
any Subsidiary of TFM to the Mexican Government, or (ii) are offset by the
Company, any Restricted Subsidiary, Grupo TFM, TFM or any Subsidiary of TFM, in
each case in a single transaction or a series of related transactions, with
respect to or against any receipt of proceeds from, or settlement of, the VAT
Claim; provided, that any such amounts paid, agreed to be paid or offset by the
Company, any Restricted Subsidiary, Grupo TFM, TFM or any Subsidiary of TFM
prior to or within three (3) months following receipt of proceeds from, or
settlement of, the VAT Claim shall be deemed to be part of a single transaction
or series of related transactions.

“Opinion of Counsel” means a written
opinion of counsel, who may be counsel for or an employee of the Company, which
is acceptable in form and substance to the Trustee.  Each Opinion of Counsel shall comply with Section 1.02.

“Outstanding” when used with reference
to Notes means, as of the date of determination, all Notes authenticated and
delivered by the Trustee under this Indenture, except

(a)           Notes
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

(b)           Notes
or portions thereof for the payment or redemption of which moneys shall have
been deposited in trust with the Trustee, provided,
that if such Notes are to be redeemed, notice of such redemption shall have
been given pursuant to this Indenture, or provision satisfactory to the Trustee
shall have been made for the giving of such notice; and

 

17

 

(c)           Notes
in lieu of or in substitution for which other Notes shall have been
authenticated and delivered pursuant to Section 3.03;

provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding Notes
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Notes owned by the Company, any Guarantor or any other
obligor of the Notes or any Person that, at such time, is an Affiliate of the
Company, of any Guarantor or of such other obligor, shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded. Notes so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to such Notes and that the pledgee is not the Company, any
Guarantor or any other obligor upon the Notes or any Affiliate of the Company,
of any Guarantor or of such other obligor.

“Partial
Qualifying Disposition” means a GTFM Disposition (other than a
disposition to or merger or consolidation with the Company or another
Restricted Subsidiary) involving the Capital Stock of TMM Holdings or TMM
Multimodal in which (i) after giving effect to such transaction, the Company
and its Restricted Subsidiaries control, directly or indirectly, more than 50%
of the Capital Stock of TMM Multimodal which under ordinary circumstances (not
dependent upon the happening of a contingency) has voting power to elect a
majority of the board of directors of TMM Multimodal, (ii) at least 80% of the
consideration received from such transaction is in the form of cash, (iii) the
Company and the Guarantors receive the opinion described in clause (1) under
the definition of a Qualifying Disposition (for the purposes of this
definition, notwithstanding the amount of the consideration for such
transaction and fair market value shall be determined on an enterprise value
basis), and (iv) such transaction is effected in accordance with any applicable
release provisions in this Indenture or in the Collateral Documents.

“Participant”
means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively
(and, with respect to DTC, shall include Euroclear and Clearstream).

“Paying Agent” means any Person
authorized by the Company to pay the principal of, premium, if any, and
interest and Additional Amounts, if any, on the Notes on behalf of the Company.

“Person” or “person” means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or other entity
or a government or any agency or political subdivision thereof.

“Place of Payment” means the principal
office of the Trustee and such other place or places where the principal of,
premium, if any, and interest and Additional Amounts, if any, on the Notes are
payable.

 

18

 

“Predecessor Note” of any particular
Note means every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 3.03 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen Note.

“Principal
Market” means the New York Stock Exchange, Inc. or, if the ADSs
are not traded on the New York Stock Exchange, Inc., then the principal
securities exchange or trading market for the ADSs.

“Private Placement Legend” means the
legend set forth in Section 2.02, which is required to be placed on all
Restricted Global Notes and Transfer Restricted Securities issued under this
Indenture except as otherwise permitted by the provisions of this Indenture.

“Proceeds Offer Repurchase Date” shall
have the meaning assigned to such term in Section 5.18(d).

“Promotora Servia” means Promotora
Servia, S.A. de C.V., a corporation organized and existing under the laws of
the United Mexican States, and its successors and assigns.

“Purchasers” shall have the
meaning assigned to such term in the Note Purchase Agreement.

“Put” means
the existing joint and several obligation of the Company and KCS to purchase
the shares of TFM owned by the Mexican Government pursuant to the Agreements,
dated January 31, 1997 and June 9, 1997, among the Mexican Government, Grupo
TFM, the Company and KCS.

“QIB” means a
“qualified institutional buyer” as defined in Rule 144A.

“Qualifying Disposition” means any GTFM
Disposition which (a) is an Exchange Transaction, (b) is a Partial Qualifying
Disposition, (c) is a Receivables Securitization Facility Foreclosure or (d)
meets each of the following requirements:

(1)           
if the transaction involves more than $10 million, individually, or if all
transactions entered into after the Initial Issuance Date involve more than $25
million in the aggregate, the Company and the Guarantors receive an opinion from a Designated Investment
Bank to the effect that the consideration to be received in connection with
such transaction is fair, from a financial point of view, to the Company and
its Restricted Subsidiaries;

(2)           the
cash consideration to be received in such transaction is equal to or greater
than 35% of the principal amount of the Outstanding Notes plus accrued and
unpaid interest thereon at the time of the consummation of such transaction, provided,
that the amount of any notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received) shall be deemed to be cash for this purpose;

 

19

 

(3)           any consideration other than cash to
be received in such transaction shall be in the form of securities (i) issued
by a Person that is eligible to register securities on Form F-3 or Form S-3
under the Securities Act and such securities so received are either (x) freely
transferable under the Securities Act or (y) entitled to the benefits of a
registration rights agreement pursuant to which the issuer of such securities
is required to effect a registration under the Securities Act of the securities
received in such transaction not later than six months after the closing of the
transaction (subject to customary blackout, hold-back and other similar
provisions) and (ii) constituting no more than 40% of the outstanding
fully-diluted Capital Stock of such Person; and

(4)           the party to which such shares of
Capital Stock are sold, issued, conveyed, transferred or otherwise disposed of
or with or into which the Company or any Restricted Subsidiary (or any
successor of any of them) is merged is not, immediately prior to the
transaction, an Affiliate or Associate of the Company.

“Qualifying Exchange” means any
exchange by the Company or any Restricted Subsidiary of shares of Capital Stock
(other than Disqualified Capital Stock) of the Company or of Qualifying
Subordinated Indebtedness of the Company for Outstanding Notes, at the option
of the Holder of the Outstanding Notes; provided,
that, in the case of any exchange involving Qualifying Subordinated
Indebtedness, such exchange is not made with an Affiliate or an Associate
unless it is made pursuant to an exchange offer made to all of the holders of
the Notes.

“Qualifying PEMEX Securitization Transaction”
means a transaction in which:

(1) certain assets of the Company or a Restricted
Subsidiary used or intended to be used in connection with (x) services to be rendered to,
or contracts with, Petroleos Mexicanos  or (y) services to be rendered indirectly to, or
contracts indirectly with, Petroleos Mexicanos, to or through any Person formed
to render services to, or contract with, Petroleos Mexicanos,  are transferred at fair market value to a
Person formed for the sole purpose of participating in the Qualifying PEMEX
Securitization Transaction;

(2)           the Company receives an opinion as to
the fairness of such transaction to the Company from a financial point of view
issued by a Designated Investment Bank;

(3)
          the assets of such Person shall
not consist of assets transferred to such Person by the Company or any
Restricted Subsidiary except in connection with a Qualifying PEMEX
Securitization Transaction; and

(4)           such Person incurs Indebtedness
secured by such assets that is not guaranteed by, does not have recourse to,
and does not constitute Indebtedness of, the Company or any of its Restricted
Subsidiaries.

“Qualifying Subordinated Indebtedness”
means Indebtedness of the Company that (i) is subordinated in right of payment
to the Notes, (ii) does not require any principal payments prior to the Stated
Maturity of the principal of the Notes (as such may be extended pursuant to
Section 3.01(b)) and (iii) has aggregate annual cash interest payments not in
excess of the lesser of (a) the sum of (1) 2% of the principal amount of such
Qualifying Subordinated Indebtedness plus (2) the annual cash interest
requirements on all Notes retired by the Company prior to the

 

20

 

issuance date of such Qualifying Subordinated Indebtedness through the
application of VAT Proceeds (less any cash interest requirements in excess of
2% per annum on Qualifying Subordinated Indebtedness previously issued) and (b)
8% per annum of the principal amount of such Qualifying Subordinated
Indebtedness.

“Receivables Securitization Facility”
means the receivables securitization facility established pursuant to the
following documents (and all other documents related to such facility), in each
case as in effect from time to time, and any replacement, refinancing or
extension thereof permitted pursuant to the terms of Section 5.14 (b)(vii)
hereof:  Third Amended and Restated
Master Trust Agreement dated as of August 19, 2003, as amended by Amendment
Number One to Third Amended and Restated Master Trust Agreement dated as of
December 29, 2003, Amendment Number Two to Third Amended and Restated Master
Trust Agreement dated as of May 25, 2004, and Amendment Number Three to Third
Amended and Restated Master Trust Agreement dated as of June 10, 2004 (as so
amended, and as amended from time to time, through the date hereof, the “Master Trust Agreement”) pursuant to which
The Bank of New York, as trustee, has issued to Maple Bank GmbH (“Maple”), Investor Certificates (the “Investor Certificates”) in the
original aggregate principal amount of $95,300,000 under a Series 2003-A
Supplement dated as of August 19, 2003, as amended by Amendment Number One to
Series 2003-A Supplement dated as of December 29, 2003, Amendment Number Two to
Series 2003-A Supplement dated as of May 25, 2004 and Amendment Number Three to
Series 2003-A Supplement dated as of June 10, 2004 (as so amended, and as
amended from time to time, through the date hereof, the “Series 2003-A Supplement”) among the
Sellers, the Bank of New York, as trustee, and Maple, and as amended by the Letter Agreement (the “Receivables Letter Agreement”) dated as of August 6,
2004 among the Company, TMM Logistics, S.A. de C.V., Naviera Del
Pacifico, S.A. de C.V., and The Bank of New York, as trustee, and Maple Bank
GmbH, and the Termination Agreement dated
as of August 6, 2004 between the Company and the Bank of New York.

“Receivables
Securitization Facility Foreclosure” means any disposition of
the Capital Stock of TMM Multimodal upon a foreclosure (or sale in lieu of
foreclosure) of such Capital Stock by the holders of the certificates under the
Receivables Securitization Facility (or by any trustee or collateral agent
acting thereunder) pursuant to the Receivables Securitization Facility or any
Collateral Document relating to the Capital Stock of TMM Multimodal.

“Redemption Date,” when used with
respect to any Note to be redeemed, in whole or in part, means the date fixed
for such redemption by or pursuant to this Indenture.

“Redemption Price,” when used with
respect to any Note to be redeemed, means the price (exclusive of accrued and
unpaid interest and Additional Amounts, if any) payable in cash at which it is
to be redeemed pursuant to this Indenture.

“Refinance”
shall have the meaning assigned to such term in Section 5.14(b)(vii).

“Refinancing Indebtedness” shall have
the meaning assigned to such term in Section 5.14(b)(vii).

 

21

 

“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of the Initial Issuance Date, by and
among the Company and the Guarantors in favor of the Holders of Initial Private
Notes as such agreement may be amended, modified or supplemented from time to
time.

“Regular Record Date” for the interest
payable on any Interest Payment Date on the Notes means the January 15 or July
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date; provided, that if the Company exercises
the Extension Election, the Regular Record Dates for the Interest Payment Dates
occurring during the extended term of the Notes shall be July 15, 2007, October
15, 2007, January 15, 2008 and April 15, 2008.

“Regulation S” means
Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Global
Note bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of the Depositary and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes issued in reliance on Rule 903 of Regulation S.

“Repurchase Date” shall have the
meaning assigned to such term in Section 5.16.

“Repurchase
Price,” when used with respect to any Note to be repurchased,
means the price payable in cash at which it is to be repurchased pursuant to
Section 5.16 or 5.18.

“Responsible Officer,” when used with
respect to the Trustee, means any officer within the Corporate Trust Office (or
any successor office) of the Trustee, including, without limitation, any Vice
President, any Assistant Vice President, any Senior Trust Officer, any Trust
Officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers, who shall,
in any case, be responsible for the administration of this Indenture or have
familiarity with it, and also means, with respect to particular corporate trust
matters, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.

“Restricted Global Notes” means the Rule
144A Global Note, the IAI Global Note and the Regulation S Global Note, each of
which shall bear the Private Placement Legend.

“Restricted Payments” shall have the
meaning assigned to such term in Section 5.12(a).

“Restricted Subsidiary” means any
consolidated Subsidiary of the Company other than (i) Grupo TFM and its
consolidated Subsidiaries and (ii) any Subsidiary of the Company formed solely
for the purpose of, and whose operations consist solely of, participating in a
Qualifying PEMEX Securitization Transaction.

“Rule 144” means Rule 144
promulgated under the Securities Act.

“Rule 144A” means Rule
144A promulgated under the Securities Act.

 

22

 

“Rule 144A Global Note” means a Global
Note bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of the Depositary and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes issued in reliance on Rule 144A.

“Rule 506(a)” means Rule 506(a)
promulgated under the Securities Act.

“Rule 903” means Rule 903
promulgated under the Securities Act.

“Rule 904” means Rule 904
promulgated under the Securities Act.

“Securities Act” means the Securities
Act of 1933, as amended from time to time, or any successor act.

“Shelf Registration Statement” means
any registration statement filed with the Commission by the Company and the
Guarantors covering resales by Holders of the Initial Private Notes, as
specified in the Registration Rights Agreement.

 

“Special Record Date” for the payment
of any Defaulted Interest on the Notes means a date fixed by the Company
pursuant to Section 3.10.

 

“Standard & Poor’s” means Standard
& Poor’s Ratings Group, a division of McGraw-Hill Inc., or any successor
thereto.

 

“Stated Maturity,” when used with
respect to any Note or any installment of interest thereon, means the date
specified in such Note as the fixed date on which the principal of such Note or
such installment of interest is due and payable.

“Subsidiary” means any Person of which
any other Person directly or indirectly owns or controls stock (or other
ownership interests) which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board
of directors (or equivalent governing body) of such Person.

“Surviving Entity” shall have the
meaning assigned to such term in Section 11.01 (1).

“TFM” means TFM, S.A. de C.V., a
corporation organized and existing under the laws of the United Mexican States.

“TMM
Holdings” means TMM Holdings, S.A. de C.V., a corporation
organized and existing under the laws of the United Mexican States.

“TMM Multimodal” means TMM Multimodal,
S.A. de C.V., a corporation organized and existing under the laws of the United
Mexican States.

“Transfer” shall have the meaning
assigned to such term in Section 11.01.

 

23

 

“Transfer Restricted Securities” means
securities that bear or are required to bear the Private Placement Legend set
forth in Section 2.02 hereof.

“Trustee” means the Person named as the
“Trustee” in the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter “Trustee” shall mean such successor Trustee.

“Trust Indenture Act” means the Trust
Indenture Act of 1939, as amended, and as in force at the date on which this
Indenture was executed, except as provided in Section 10.05.

“Unrestricted Global Note” means one or
more Global Notes that bear the Global Note Legend, that do not and are not
required to bear the Private Placement Legend and are deposited with or on
behalf of the Depositary and registered in the name of the Depositary or its
nominee.

“U.S. Government Obligations” shall
have the meaning assigned to such term in Section 12.01.

“U.S. Person” means a U.S.
person as defined in Rule 902(k) under the Securities Act.

“VAT Cash
Proceeds” means VAT Proceeds in U.S. Dollars or a currency
freely convertible into U.S. Dollars (including any cash payments received upon
the disposition or conversion of non-cash VAT Proceeds but only as and when
received).

“VAT Claim”
means the claim of TFM against the Mexican Government for refund of a value
added tax payment and a related value added tax certificate in the original
amount of 2,111,111,790 Mexico pesos, including amounts payable pursuant to the
October 11, 2002 judgment, or any similar subsequent judgment, by the Tribunal Colegiado en Materia Administrativa del
Primer Circuito in favor of TFM related to such claim.

 

“VAT Proceeds” means the amount
(whether in cash or other property) of:

(a)
any dividends or distributions received by the Company or any Restricted Subsidiary from Grupo
TFM or TFM (or any successor
of either of them) on or after the date on which TFM (or its successor) receives
any proceeds from the Mexican Government in connection with the VAT Claim, less the amount of all foreign,
Federal, state and local taxes payable by the Company or any Restricted
Subsidiary as a direct consequence of the receipt of amounts in respect of the
VAT Claim or the payment of any such dividend or distribution) (referred to
herein as “group-level taxes”);
provided, that the amount of
VAT Proceeds shall be limited to (A) the product of (1) the Company’s and its Restricted
Subsidiaries’ percentage economic interest in Grupo TFM and TFM at the time
such proceeds are received by TFM or at the time such dividends or
distributions are made, whichever is greater, and (2) (x) such proceeds (net of
the amount of legal, accounting, advisors’ and other fees and expenses payable
by the Company, Grupo TFM or TFM in connection with the VAT Claim (provided
that for such netting purposes the amount of legal, accounting, advisors’ and
other fees of the Company shall not exceed $1,250,000) and all foreign,
Federal, state and local taxes payable
as a direct
consequence of the receipt by TFM of amounts in respect of the VAT Claim,
including in

 

24

 

connection with the payment of such dividends or distributions by
Grupo TFM or TFM) less (B) the sum of (x) the amount of any group-level taxes deducted from VAT Proceeds pursuant
to this clause, (y)
the amount of any proceeds described in clause (b) below and (z) any Offset Amount (such amount being referred to
herein as the “Maximum VAT Amount”); and

(b)
any proceeds otherwise received by the Company or any Restricted Subsidiary
from the Mexican Government in respect of the VAT Claim, less the amount of all foreign, Federal,
state and local taxes payable by the Company or any Restricted Subsidiary as a direct consequence of the
receipt of such proceeds.

There
shall be no duplication of any taxes that are otherwise deducted pursuant to
the preceding sentence.  VAT Proceeds
shall be in addition to, and not in lieu of or in substitution for, any Net
Cash Proceeds under clause (iii)(y) of the definition of “GTFM
Disposition” that may be calculated based on dividends or distributions by
Grupo TFM or TFM to the Company or any Restricted Subsidiary. In the event that
Grupo TFM or TFM has received proceeds with respect to the VAT Claim and a GTFM
Disposition covered by clause (iii)(y) of the definition of “GTFM Disposition”
has also occurred, then dividends or distributions received by the Company or any
Restricted Subsidiary from Grupo TFM or TFM shall be deemed to be VAT Proceeds
until the Maximum VAT Amount has been reached.

“Volume Weighted Average Price”
means, for any security as of any date, the dollar volume-weighted average
price in Dollars for such security on the Principal Market during the period
beginning at 9:30 a.m.  New York time
(or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00 p.m. 
New York time (or such other time as the Principal Market publicly
announces is the official close of trading) as reported by Bloomberg Financial
Markets (“Bloomberg”)
through its “Volume at Price” functions, or, if the foregoing does not apply,
the dollar volume-weighted average price in Dollars of such security in the
over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30 a.m. 
New York time (or such other time as the over-the-counter market
publicly announces is the official open of trading), and ending at 4:00 p.m.
New York time (or such other time as the over-the-counter market publicly
announces is the official close of trading), as reported by Bloomberg, or, if
no dollar volume-weighted average price is reported for such security by Bloomberg
for such hours, the average of the highest closing bid price and the lowest
closing ask price, each in Dollars, of any of the market makers for such
security as reported in the “pink sheets” by the National Quotation Bureau,
Inc.

“Voluntary Reduction” shall have the
meaning assigned to such term in Section 3.01(c)(iv).

“Wholly Owned Subsidiary” of any Person
shall mean any Subsidiary of such Person of which all of the shares of Capital
Stock (except directors’ qualifying shares) are at the time directly or
indirectly owned by such Person, by one or more Wholly Owned Subsidiaries of
such Person or by such Person and one or more of its Wholly Owned Subsidiaries.

SECTION 1.02   COMPLIANCE CERTIFICATES AND OPINIONS.  Upon any application or request by the
Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate
stating that all

 

25

 

conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such application
or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.

Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

(1)           a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;

(2)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

(3)           a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

(4)           a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

SECTION 1.03   FORM OF DOCUMENTS DELIVERED TO TRUSTEE.  In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

Any
certificate, statement or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of or
representations by counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer’s certificate, statement or
opinion is based are erroneous.  Any
certificate, statement or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate, statement or opinion of or
representations by an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate, statement or opinion or representations with
respect to such matters are erroneous.

Where
any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

26

 

SECTION 1.04   NOTICES,
ETC. TO TRUSTEE AND COMPANY.  Any request, demand, authorization, direction, notice, consent,
waiver or act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,

(1)           the Trustee by any Holder or by the
Company shall be made, given, furnished or filed in writing and hand delivered,
mailed, first class, postage prepaid, or sent by facsimile transmission to or
with the Trustee at the principal office of the Trustee located at 101 Barclay
Street, Floor 21W, New York, New York 10286, Attention: Global Finance Unit,
telephone number (212) 815-5346,
facsimile number (212) 815-5802/5803, or at any other address
previously furnished in writing to any Holder or to the Company by the Trustee,
and unless otherwise herein expressly provided, any such document shall be
deemed to be sufficiently made, given, furnished or filed upon its receipt by a
Responsible Officer of the Trustee, provided,
that if receipt of any facsimile transmission is not confirmed in writing or by
facsimile by the Trustee, a copy of such transmission shall be delivered by
hand or mailed, first class, postage prepaid, to the Trustee, or

(2)           the Company by the Trustee or by any
Holder shall be made, given furnished or filed in writing and hand delivered,
mailed, first class, postage prepaid, or sent by facsimile transmission to or
with the Company addressed to it at Avenida de la Cúspide, No. 4755, Colonia
Parques del Pedregal, 14010 Mexico, D.F., Attention: Chief Financial Officer,
telephone number (011) 52-55-5629-8866, facsimile number (011) 52-55-5629-8899,
at the office maintained by the Company pursuant to Section 5.02 hereof or at
any other address previously furnished in writing to the Trustee by the
Company, provided, that if
receipt of any facsimile transmission is not confirmed in writing or by
facsimile by the Company, a copy of such transmission shall be delivered by
hand or mailed, first class, postage prepaid, to the Company.

SECTION 1.05   NOTICE
TO HOLDERS; WAIVER.

(a)           Where this Indenture
provides for notice to Holders of Notes of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first class, postage prepaid, to each Holder of a Note affected by
such event at the address of such Holder as it appears in the Note Register,
not later than the latest date and not earlier than the earliest date
prescribed for the giving of such notice, and in the event of suspension of
regular mail service or for any other reason it shall be impracticable to give
such notice to Holders of Notes by mail, then such notification to Holders of
Notes shall be made in the manner specified in Section 1.05(b) and such
notification shall constitute sufficient notification for every purpose
hereunder. In any case where notice to Holders of Notes is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Note shall affect the sufficiency of such
notice with respect to other Holders of Notes or the sufficiency of any notice
by publication to Holders of Notes given as provided in Section 1.05(b).  In computing any time period for the mailing
or giving of notice of any event hereunder, the computation shall be made by
counting back or forward, as appropriate, from the date of the event in
question, without counting the date of such event but counting as a full day
the ending date of such period no matter when notice was mailed or given on
such ending date.

 

27

 

(b)           In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification as shall
be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.

(c)           Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

SECTION 1.06   CONFLICT WITH TRUST INDENTURE ACT.  If any
provision hereof limits, qualifies or conflicts with (i) another provision
hereof which is required to be included in this Indenture by any provision of
the Trust Indenture Act, or (ii) any provision of the Trust Indenture Act, such
required provision or such provision of the Trust Indenture Act, as the case
may be, shall control.  If any provision
of this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the former provision shall be deemed to
apply or be excluded, as the case may be, to or from this Indenture.  Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the Company, the
Guarantors and the Trustee shall be deemed for all purposes hereof to be
subject to and governed by the Trust Indenture Act to the same extent as would
be the case if this Indenture were so qualified on the date hereof.

SECTION 1.07   EFFECT OF HEADINGS AND TABLE OF
CONTENTS.  The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.

SECTION 1.08   SUCCESSORS
AND ASSIGNS.  All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.

SECTION 1.09   SEPARABILITY
CLAUSE.  In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.10   BENEFITS
OF INDENTURE.  Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

SECTION 1.11   GOVERNING
LAW.  This Indenture, the Guarantees and the Notes shall be governed
by, construed and enforced in accordance with the laws of the State of New
York, without regard to the conflict of laws principles thereof.

SECTION 1.12   SUBMISSION TO JURISDICTION.  Each of the
parties to this Indenture hereby irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in the Borough of Manhattan in The City
of New York in any action or proceeding arising out of or relating to the
Notes, the Guarantees, this Indenture or the Collateral

 

28

 

Documents, and all such parties hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such New York State or Federal court and hereby irrevocably waive, to the
fullest extent that they may legally do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE NOTES, THE GUARANTEES, THE COLLATERAL DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 1.13   LEGAL
HOLIDAYS.  In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Note shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Notes) payment of the principal of, premium, if any, interest, if any, or
Additional Amounts, if any, on such Note need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided, that no additional interest
shall accrue with respect to the payment due on such date for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.

SECTION 1.14   APPOINTMENT OF AGENT FOR SERVICE.  By the
execution and delivery of this Indenture, the Company hereby appoints CT
Corporation System as its authorized agent upon which process may be served in
any legal action or proceeding which may be instituted in any Federal or State
court in the Borough of Manhattan, The City of New York, arising out of or
relating to the Notes or this Indenture, but for that purpose only.  Service of process upon such agent at the
office of such agent at 1633 Broadway, New York, New York 10019, and written
notice of said service to the Company by the Person serving the same addressed
as provided by Section 1.04, shall be deemed in every respect effective service
of process upon the Company in any such legal action or proceeding. Such
appointment shall be irrevocable so long as the Holders of Notes shall have any
rights pursuant to the terms thereof or of this Indenture until the appointment
of a successor by the Company with the consent of the Trustee and such
successor’s acceptance of such appointment. 
Each of the Company and the Guarantors further agree to take any and all
actions, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment
of such agent or successor.

SECTION 1.15   COUNTERPART
ORIGINALS.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.

ARTICLE TWO

NOTE FORMS

SECTION 2.01   FORMS
GENERALLY.  (a)  General.  The Notes and the Trustee’s certificate of
authentication shall be in substantially the forms set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification

 

29

 

and such legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as may, consistently
herewith, be determined by the officers executing such Notes as evidenced by
their execution of the Notes. Any such legend or endorsement shall be delivered
in writing to the Trustee by the Company.

The
Definitive Notes shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Notes may be listed, all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.

The
terms and provisions contained in the Notes shall constitute, and are hereby
expressly made, a part of this Indenture and the Company, the Guarantors and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with
the express provisions of this Indenture, the provisions of this Indenture
shall govern and be controlling.

(b)           Initial Private Notes.  During any such time as the Shelf
Registration Statement shall be effective, the Initial Private Notes may be
sold or transferred pursuant to such Shelf Registration Statement.  During any such time as the Shelf
Registration Statement shall not be effective, the Initial Private Notes may be
sold only to (i) QIBs in reliance on Rule 144A, (ii) Institutional Accredited
Investors in reliance on exemptions from the registration requirements of the
Securities Act, (iii) Non-U.S. Persons in reliance on Regulation S or (iv) pursuant
to another exemption from the registration requirements of the Securities Act
(based upon an Opinion of Counsel if requested by the Company), subject in each
case to the restrictions on transfer set forth herein.

The Initial Private Notes will be issued
in the form of Restricted Global Notes, in each case without interest coupons
and with the Global Note Legend and Private Placement Legend set forth in
Section 2.02 hereto.  Such Initial
Private Notes will be deposited on behalf of the Holders thereof with the
Custodian, and registered in the name of DTC or a nominee of the DTC, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture.  Beneficial interests in the
Regulation S Global Note may be held only through Euroclear and Clearstream (as
indirect participants in DTC) and will not be exchangeable for interests in the
IAI Global Note or a Definitive Note without a legend containing restrictions
on transfer of such Note prior to the expiration of the Distribution Compliance
Period and then only upon (x) certification in form reasonably satisfactory to
the Trustee that beneficial interests in such Regulation S Global Note are
owned either by Non-U.S. Persons or U.S. Persons who purchased such interests
in a transaction that did not require registration under the Securities Act and
(y) in the case of an exchange for a Definitive Note, in compliance with
Section 3.08 hereof.  The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee as hereinafter provided.

(c)           Book-Entry Provisions.  Upon their original issuance, each Note
shall be issued in the form of one or more Notes in global form (“Global Notes”) registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for

 

30

 

credit by DTC to the respective accounts of beneficial owners of the
Notes represented thereby (or such other accounts as they may direct).

(d)           Definitive Notes.  Except as provided in this Section 2.01,
Section 3.04 or Section 3.08 hereof, owners of beneficial interests in Global
Notes shall not be entitled to receive physical delivery of Definitive Notes.

SECTION 2.02   FORM
OF FACE OF NOTE.  [IF THE NOTE IS A RESTRICTED GLOBAL NOTE, THEN INSERT:  THE NOTES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, (5) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS) OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.]

[IF
THE NOTE IS A GLOBAL NOTE, THEN INSERT: THIS NOTE IS A GLOBAL NOTE WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. 
THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE
REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED,
IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[IF
THE NOTE IS A GLOBAL NOTE AND THE DEPOSITORY TRUST COMPANY IS TO BE THE
DEPOSITARY THEREFOR, THEN INSERT: UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY

 

31

 

PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]

Grupo Tmm, S.A.

Senior Secured  Note due 2007

	
  CUSIP NO.__________

  	
  $_____________

  
	
  NO.__________

  	
   

  

 

Grupo Tmm, S.A., a corporation duly
organized and existing under the laws of the United Mexican States (herein
called the “Company”, which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _________, or its registered assigns, the principal sum of _________ Dollars
[IF THIS NOTE IS A GLOBAL NOTE, THEN INSERT: , or such other principal amount
as may be set forth in the records of the Trustee in accordance with the
Indenture,] on August 1, 2007 (subject to extension to August 1, 2008 as
provided in the Indenture), and to pay interest thereon in cash from the
Initial Issuance Date, or from the most recent Interest Payment Date for which
interest has been paid or duly provided for, or, if the date hereof is after a
Regular Record Date and before the following Interest Payment Date, then from
such following Interest Payment Date, semiannually on February 1 and August 1
in each year, commencing February 1, 2005, at the rate of 101⁄2% per annum
(subject to reduction or increase as provided in the Indenture), until the
principal hereof is paid or made available for payment.

On
each Interest Payment Date occurring on or prior to August 1, 2007, the Company
may elect to pay interest due on such Interest Payment Date in cash and through
the issuance of (i) Additional Notes, in denominations of $1.00 and
integral multiples thereof, or (ii) ADSs of the Company, having a value
equal to the interest due (in excess of the portion of such interest paid in
cash at the Cash Interest Rate), which ADSs shall be issued at a 5% discount to
the 20 trading day Volume Weighted Average Price per ADS, or any combination
thereof, in each case as more fully set forth in the Indenture; provided, that, in the event the Company
elects to pay any portion of the interest in Additional Notes or ADSs on any
Interest Payment Date as provided herein, it shall pay cash interest on such
Interest Payment Date at the interest rate of 
2% per annum or such higher rate as the Company may elect with respect
to such Interest Payment Date.  In the
event the Company elects to pay any portion of the interest due on any Interest
Payment Date other than in cash, the annual interest rate applicable for such
Interest Payment Date shall be as set forth below:

	
  Interest Payment Date

  	
   

  	
  Applicable Interest Rate

  
	
  February 1, 2005

  	
   

  	
  12.00%

  
	
  August 1, 2005

  	
   

  	
  12.00%

  
	
  February 1, 2006

  	
   

  	
  12.00%

  
	
  August 1, 2006

  	
   

  	
  12.00%

  
	
  February 1, 2007

  	
   

  	
  12.50%

  
	
  August 1, 2007

  	
   

  	
  13.00%

  

 

32

 

This
annual interest rate payable on the Notes will decrease in the event the
Company redeems, repays, repurchases or otherwise retires or offers to
repurchase (provided the Company purchases all Notes validly tendered in
accordance with the terms of such offer to repurchase (or a prorated amount
thereof in accordance with the terms of such offer to repurchase)), the
respective principal amount of Notes set forth below, in each case pursuant to
the provisions of Section 3.01(c)(iv) of the Indenture:

	
  Voluntary Reduction Amount

  	
   

  	
  Interest Rate Reduction

  
	
   

  	
   

  	
   

  
	
  Less than $100,000,000

  	
   

  	
  0.00%

  
	
  $100,000,000 up to
  $150,000,000

  	
   

  	
  0.67%

  
	
  more than $150,000,000

  	
   

  	
  1.00%

  

 

;
provided
that such interest rate reduction shall not be more than 1.00% per annum in the
aggregate.

The
Company will provide notice to the Trustee of any event giving rise to an
interest rate reduction, the amount of any interest rate reduction and the
effective date of any interest rate reduction as specified in the
Indenture.  Following an Event of
Default, the rate at which the Notes accrue interest shall increase by 2.00%
per annum. In addition, following an Event of Default, any unpaid interest and
Additional Amounts, if any, will accrue interest at the Default Rate until such
time as full payment is made thereon.

In
the event the Company exercises its option to extend the maturity date of the
Notes to August 1, 2008 as provided in the Indenture, the interest rate shall
be 12% per annum during such extended term (subject to reduction as described
above), and such interest shall be payable quarterly, in advance, on August 1,
2007, November 1, 2008, February 1, 2008 and May 1, 2008, and only in cash, as
provided in the Indenture.

The
interest payable pursuant to this Note, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date or July 15,
2007, October 15, 2007, January 15, 2008 and April 15, 2008 if the Company
makes the Extension Election.  Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Company, notice whereof shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed and
upon such notice as may be required by such exchange, all as more fully
provided in such Indenture.

Payment
of the principal of (and premium, if any), cash interest and Additional
Amounts, if any, on this Note will be made at the office or agency of the
Company maintained for that purpose in New York, New York, in such coin or
currency of the United States of

 

33

 

America as at the time of payment is legal tender for payment of public
and private debts; or at the option of the Company payment of cash interest and
Additional Amounts, if any, may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Note Register; provided
that any Holder of more than $2 million in aggregate principal amount of Notes
that has so elected and given wire transfer instructions to the Company shall
be entitled to receive all payments of principal and interest and Additional
Amounts with a Regular Record Date after the date the Company receives such
notice with respect to Notes held by such Holders by wire transfer of
immediately available funds within the United States to the accounts specified
by the Holders thereof.  Until otherwise
designated by the Company, the Company’s office or agency in New York will be
the office of the Trustee maintained for such purpose.  The Notes will be issued in denominations of
$1.00 and integral multiples thereof. 
Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

Initially,
The Bank of New York, the Trustee under the Indenture, will act as Paying Agent
and Note Registrar.  The Company may
change any Paying Agent or Note Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act in any such capacity.

[IF
THIS NOTE IS A GLOBAL NOTE, INSERT: Partial payment of interest in Additional
Notes or ADRs shall be made by deposit of such Additional Notes or ADRs with
the Custodian for DTC.]  [IF THIS NOTE
IS A DEFINITIVE NOTE, INSERT: Partial payment of interest in Additional Notes
or ADRs shall be made by delivering certificates representing such Additional
Notes or ADRs to the address of the Holder entitled to receive the same as
shown on the Note Register.]

Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

In
Witness Whereof, the Company has caused this instrument to be duly
executed.

DATED:

	
   

  	
  Grupo Tmm, S.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  	
   

  
				

 

34

 

SECTION
2.03   FORM OF REVERSE OF NOTE.  This Note is one of a duly authorized issue of Notes of the
Company designated as its Senior Secured 
Notes due 2007 (herein called the “Notes”),
limited in aggregate principal amount to $508,703,356, except for Additional
Notes and Notes issued pursuant to Sections 3.04, 3.08, 3.09, 4.08, 5.16, 5.18
and 10.06 of the Indenture, issued under an Indenture, dated as of August 11,
2004 (herein called the “Indenture”),
by and among the Company, the Guarantors and The Bank of New York, as trustee
(herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered.

 

The
Company hereby further agrees, subject to the limitations and exceptions set
forth below, that if any deduction or withholding for any present or future
taxes, duties, levies, imposts, assessments or other governmental charges of
the United Mexican States (or any political subdivision or taxing authority
thereof or therein) shall at any time be required by such jurisdiction or any
such political subdivision or taxing authority (or by the jurisdiction of
incorporation, seat of management or residence for tax purposes of any
successor to the Company (a “Successor Jurisdiction”)) in respect
of any amounts to be paid by the Company under the Notes (“Taxes”), then, unless
the Company pays the amount of such deduction or withholding directly to the
Mexican Government, or is entitled to a credit against such payment, the
Company will pay in cash to the Holder of a Note such additional amounts (“Additional Amounts”) as may be
necessary in order that the net amounts paid to the Holder of such Note who,
with respect to any such Tax after such deduction or withholding (including any
withholding or deduction imposed on Additional Amounts), shall be not less than
the amounts specified in such Note to which such Holder would have received if
such Taxes had not been withheld or deducted; provided,
however, that the Company shall not be required to make any payment
of Additional Amounts for or on account of:

(a)           any Tax, which would
not have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of a power over, such Holder, if such
Holder is an estate, trust, partnership or corporation) and the taxing
jurisdiction or any political subdivision or territory or possession thereof or
area subject to its jurisdiction, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being
or having been a citizen or resident thereof or being or having been present or
engaged in trade or business therein or having or having had a permanent
establishment therein or (ii) the presentation of a Note (where presentation is
required) for payment on a date more than 30 days after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;

(b)           any estate,
inheritance, gift, sale, transfer, personal property or similar tax, assessment
or other governmental charge;

(c)           any Tax, which is
payable otherwise than by withholding from payments of (or in respect of)
principal of or interest on the Notes;

 

35

 

(d)           any Tax, that is
imposed or withheld by reason of the failure to comply by the Holder or the
beneficial owner of a Note with a written request of the Company addressed to
the Holder furnished at least 60 days prior to the first payment date with
respect to which the Company applies this clause (d) (or in the event of any
subsequent change in any such requirement at least 60 days prior to the first
payment date for which such change is effective) 

(i) to provide information, documents and other evidence concerning the
nationality, residence or identity of the Holder or such beneficial owner or
(ii) to make and deliver any declaration or other similar claim (other than a
claim for refund of a Tax, withheld by the Company) or satisfy any information
or reporting requirement, which, in the case of (i) or (ii), is required or
imposed by a statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or part of such
tax, assessment or other governmental charge; or

(e)           any combination of
items (a), (b), (c) and (d);

nor
shall Additional Amounts be paid with respect to any payment of the principal
of or interest on any Note to any Holder who is a fiduciary or partnership or
other than the sole beneficial owner of such payment to the extent such payment
would be required by the laws of the jurisdiction (or any political subdivision
or taxing authority thereof or therein) to be included in the income for tax
purposes of a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner who would not have been entitled to
such Additional Amounts had it been the Holder of the Note.

Notwithstanding
the foregoing, the limitations on the Company’s obligation to pay Additional
Amounts set forth in clause (d) above will not apply if:

(i)            the provision of
information, documentation or other evidence described in such clause (d) would
be materially more onerous, in form, in procedure or in the substance of
information disclosed, to a Holder or beneficial owner of a Note than
comparable information or other reporting requirements imposed under United
States tax law (including the United States — Mexico Income Tax Treaty),
regulation and administrative practice (such as Internal Revenue Service Forms
W-8 and W-9); or

(ii)           Rule 3.28.8 issued
by the Secretaría
de Hacienda y Crédito Público (Ministry of Finance and Public
Credit) on April 30, 2004 or a substantially similar successor of such rule is
in effect, unless (a) the provision of the information, documentation or other
evidence described in clause (d) is expressly required by statute, regulation,
ruling or administrative practice in order to apply Rule 3.28.8 (or successor
rule), the Company cannot obtain such information, documentation or other evidence
on its own through reasonable diligence and the Company otherwise would meet
the requirements for application of Rule Rule 3.28.8 (or successor rule) or (b)
in the case of a Holder or beneficial owner of a Note that is a pension fund or
other tax-exempt organization, payments to such Holder or beneficial owner
would be subject to Taxes at a rate less than that provided by Rule Rule 3.28.8
(or successor rule) if the information, documentation or other evidence
required under clause (d) above were provided.

 

36

 

In
addition, clause (d) above shall be construed to require that a non-Mexican
pension or retirement fund or other Holder or beneficial owner of a Note
register with the Ministry of Finance and Public Credit of Mexico for the
purpose of establishing eligibility for an exemption from or reduction of
Taxes.

The
Company shall make any required withholding or deduction and remit the full
amount deducted or withheld to the appropriate taxing authority, as and when
required by applicable law.  The Company
shall furnish to the Trustee, within 30 days after the date the payment of any
Taxes is due, evidence of such payment by the Company.  The Company shall deliver copies of such
evidence to Holders of the Notes or the Paying Agent upon request.

The
Company shall pay any present or future stamp, court, documentary or other
similar Taxes, charges or levies that arise in the United Mexican States or any
of its political subdivisions (or any Successor Jurisdiction) from the
execution, delivery, registration of, or enforcement of rights under, the
Notes, the Guarantees, this Indenture or the Collateral Documents.

The
Notes may be redeemed at the option of the Company in whole but not in part at
any time, upon not less than 30 days’ nor more than 60 days’ notice by mail, at
a Redemption Price equal to the principal amount thereof plus accrued and
unpaid interest and Additional Amounts, if any, to the date fixed for
redemption if, as a result of any change in or amendment to the laws or any
regulations or rulings promulgated thereunder of the Mexican Government (or of
any political subdivision or taxing authority thereof or therein) or any change
in the official application or interpretation of such laws, regulations or rulings,
or any change in the official application or interpretation of, or any
execution of or amendment to, any treaty or treaties affecting taxation to
which the Mexican Government (or such political subdivision or taxing
authority) is a party, which becomes effective on or after the Initial Issuance
Date, the Company is or would be required on the next succeeding Interest
Payment Date to pay additional amounts with respect to the Notes at a rate in
excess of that in effect at the Initial Issuance Date, and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Company. The Company will also pay to the Holders on the
Redemption Date any Additional Amounts which would otherwise be payable.

The
Notes are subject to redemption upon not less than 30 days’ nor more than 60
days’ notice by mail at any time, in whole or from time to time in part, at the
election of the Company, at a Redemption Price equal to (i) 100% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Amounts, if any, to the Redemption Date, until such time as the Company shall
have previously repaid, redeemed or otherwise retired $150,000,000 in aggregate
principal amount of the Notes, and thereafter (ii) 101% of the principal amount
of the Notes, plus accrued and unpaid interest and Additional Amounts, if any,
to the Redemption Date.  In the case of
any redemption pursuant to this paragraph, interest installments whose Stated
Maturity is on or prior to the applicable Redemption Date will be payable to
the Holders of such Notes, or one or more Predecessor Notes, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.

 

37

 

In
the event of redemption of this Note in part only, a new Note or Notes for the
unredeemed portion hereof will be issued in the name of the Holder, or the
Person designated by such Holder, hereof upon the cancellation hereof.

The
Indenture provides that, in the event of a Change of Control (as defined in the
Indenture), the Company will be obligated to offer to purchase all of the Notes
then outstanding at a Repurchase Price equal to (i) 100% of the principal
amount thereof plus accrued and unpaid interest and Additional Amounts, if any,
thereon to the Repurchase Date, until such time as the Company shall have
previously repaid, redeemed or otherwise retired an aggregate principal amount
of $150,000,000 of the Notes, and thereafter (ii) 101% of the principal amount
of the Notes plus accrued and unpaid interest and Additional Amounts, if any,
to the Repurchase Date.

The
Indenture provides that, subject to certain conditions, in the event of certain
Asset Dispositions and Qualifying Dispositions and receipt by the Company of
VAT Cash Proceeds, the Company will be obligated to offer to purchase on a pro
rata basis Notes at a Repurchase Price equal to 100% of the principal amount
thereof plus accrued interest and Additional Amounts, if any, thereon to the
Repurchase Date, with the Net Cash Proceeds of such Asset Disposition or
Qualifying Disposition or VAT Cash Proceeds.

If
an Event of Default shall occur and be continuing, the principal of all the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

As
provided in the Indenture and subject to the conditions set forth therein, the
Company may terminate all of its obligations under the Notes, except certain
specified obligations, 91 days following the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which, through the payment
of interest and principal in respect thereof in compliance with their terms,
will provide money in an amount sufficient to pay the principal of, and
premium, if any, and each installment of interest and Additional Amounts, if
any, on the Outstanding Notes at maturity or upon redemption.

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Notes under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding.  The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Notes at the time Outstanding, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligations of the Company, which are
absolute and unconditional, to pay the principal of (and premium, if any) and
interest and Additional

 

38

 

Amounts, if any, on this Note at the times, place, and rate, and in the
coin or currency, herein prescribed.

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note is registrable in the Note Register, upon surrender
of this Note for registration of transfer at the office or agency of the
Company in New York, New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

The
Notes are issuable only in registered form without coupons in denominations of
$1.00 and any integral multiple thereof. 
As provided in the Indenture and subject to certain limitations therein
set forth, Notes are exchangeable for a like aggregate principal amount of
Notes of a different authorized denomination, as requested by the Holder
surrendering the same.

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

The
Company, the Guarantors, the Trustee and any agent of the Company, the
Guarantors, or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes (subject to the provisions on
the face hereof), whether or not this Note be overdue, and neither the Company,
the Guarantors, the Trustee nor any such agent shall be affected by notice to
the contrary.

No
past, present or future director, officer, employee, agent, attorney-in-fact,
incorporator or stockholder (direct or indirect) of the Company (or any such
successor entity), as such, shall have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation.

All
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

Customary
abbreviations may be used in the name of a Holder of a Security or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (tenants by the entireties), JT
TEN (=joint tenants with right of survivorship and not as tenants in common),
CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).

Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed
on the Notes as a convenience to the Holders of the Notes.  No representation is made as to the accuracy
of such numbers as printed on the Notes and reliance may be placed only on the
other identification numbers printed hereon.

 

39

 

[ASSIGNMENT
FORM]

If
you the holder want to assign this Note, fill in the form below:

I
or we assign and transfer this Note to

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

(Print
or type assignee’s name, address and zip code and social security number or tax
ID number) and irrevocably appoint

	
   

  

 

agent
to transfer this Note on the books of the Company.  The agent may substitute another to act for him.

	
   

  

 

	
  Date:

  	
  Your
  signature:

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  

 

[If the Note is a Transfer
Restricted Security, then insert:

 

In connection with any transfer of any of the
Notes evidenced by this certificate occurring prior to the expiration of the
period referred to in Rule 144(k) under the Securities Act of 1933,
as amended (the “Securities Act”), after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Notes are being transferred in accordance with their terms:

CHECK ONE BOX BELOW

(1)               o         to the Company; or

(2)               o         pursuant to an effective registration
statement under the Securities Act (including, but not limited to, a Shelf
Registration Statement); or

(3)               o         inside the United States to a
“qualified institutional buyer” (as defined in Rule 144A under the
Securities Act) that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that such transfer is

 

40

 

being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act; or

(4)               o         to an Institutional Accredited Investor (as defined in
Rule 501(a) under the Securities Act) in a transaction exempt from the
registration requirements of the Securities Act; or

(5)               o         outside the United States in an
offshore transaction within the meaning of Regulation S under the Securities
Act in compliance with Rule 903 or Rule 904 under the Securities Act; or

(6)               o         pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act; or

(7)               o         in accordance with another exemption
from the registration requirements of the Securities Act.

If
such transfer is being made pursuant to an offshore transaction in accordance
with Rule 904 under the Securities Act, the undersigned further certifies
that:

(i) the transfer is not being made to a person
in the United States;

(ii) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States,
or (b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;

(iii) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;

(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;

(v) if the proposed transfer is being made prior to the expiration
of the Distribution Compliance Period, the transfer is not being made to a U.S.
Person (other than a Qualified Institutional Buyer) or for the account or benefit
of a U.S. Person (other than a Qualified Institutional Buyer);

(vi) we have advised the transferee of the transfer restrictions
applicable to the Notes; and

(vii) if the circumstances set forth in Rule 904(b) under the
Securities Act are applicable, we have complied with the additional conditions
therein, including (if applicable) sending a confirmation or other notice
stating that the Notes may be offered and sold during the distribution
compliance period specified in Rule 903 of Regulation S, pursuant to
registration of the Notes under the Securities Act or pursuant to an available
exemption from the registration requirements under the Securities Act.

 

41

 

Unless one of the boxes is checked, the Trustee
will refuse to register any of the Notes evidenced by this certificate in the
name of any person other than the registered holder thereof; provided, however,
that if box (3), (4), (5), (6) or (7) is checked, the Trustee will be entitled
to require, prior to registering any such transfer of the Notes, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, such as the exemption provided by Rule 144 under the
Securities Act.

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed

  	
   

  	
  Signature

  
					

 

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

TO
BE COMPLETED BY PURCHASER IF (3) OR (4) ABOVE IS CHECKED.

The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is (i) a “qualified institutional buyer” within
the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (ii) an Institutional Accredited
Investor within the meaning of Rule 501(a) under the Securities Act and is
aware that the sale to it is being made in reliance on exemptions from the
registration requirements of the Securities Act and acknowledges that it has
received such information regarding the Company as the undersigned has
requested or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
exemptions from the registration requirements of the Securities Act.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:

  	
  To
  be executed by an executive officer

  
						

 

42

 

[FORM
OF OPTION OF HOLDER TO ELECT PURCHASE]

If
you wish to elect to have this Note purchased by the Company pursuant to Section
5.16 (Repurchase Offer upon a Change of Control) or 5.18 (Excess Cash Proceeds
Offer) of the Indenture, check the box:

/ /  Section 5.16                                     /
/  Section 5.18

 

If
you wish to elect to have only part of this Note purchased by the Company
pursuant to Section 5.16 or 5.18 of the Indenture, state the amount:
$______________.

	
  Date:

  	
  Your
  signature:

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  

 

 

SECTION
2.04   FORM OF GUARANTEE

SENIOR
SECURED GUARANTEE

For
value received, the undersigned Guarantors (as defined in the Indenture
referred to in the Note upon which this notation is endorsed) hereby
unconditionally guarantee on a senior secured basis (such Guarantee by the
Guarantor being referred to herein as the “Guarantee”) the due and punctual
payment of the principal of, premium, if any and interest and Additional
Amounts, if any, on the Notes, whether at maturity, by acceleration, call for
redemption, upon any Offer or Excess Cash Proceeds Offer or otherwise, the due
and punctual payment of interest on the overdue principal, premium and interest
(including, to the extent lawful and as specified in the Notes, interest on any
overdue interest) and Additional Amounts, if any, on the Notes and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in Article Fourteen of
the Indenture (as defined below).  This
Guarantee will become effective in accordance with Article Fourteen of the
Indenture and its terms shall be evidenced therein.  The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Note.

Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Indenture dated as of August 11, 2004 among Grupo TMM, S.A., the Guarantors
and The Bank of New York, as Trustee, as amended or supplemented (the “Indenture”).

 

43

 

The
Guarantee shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws to the
extent that the application of the laws of another jurisdiction would be
required thereby.

The
obligations of the Guarantors to the Holders and to the Trustee pursuant to
this Guarantee and the Indenture are expressly set forth in Article Fourteen of
the Indenture and reference is hereby made to such Indenture for the precise
terms of this Guarantee.

No
past, present or future director, officer, employee, agent, attorney-in-fact,
incorporator or stockholder (direct or indirect) of the Guarantors (or any such
successor entity), as such, shall have any liability for any obligations of the
Guarantors under this Guarantee or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.

This
is a continuing Guarantee and shall remain in full force and effect and shall
be binding upon the Guarantors and their successors and assigns until full and
final payment of all of the Company’s obligations under the Notes and Indenture
or until released or until the Notes are legally defeased in accordance with
the Indenture, and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders, and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not of collectibility.

This
Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Note upon which this Guarantee is noted shall
have been executed by the Trustee under the Indenture by the manual signature
of one of its authorized officers.

The
obligations of the Guarantors under this Guarantee shall be limited to the
extent necessary to ensure that it does not constitute a fraudulent conveyance
under applicable law.

THE
TERMS OF ARTICLE FOURTEEN OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.

 

44

 

In Witness Whereof, the Guarantors have caused
this instrument to be duly executed.

DATED:

	
   

  	
  [Guarantors]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

SECTION 2.05   FORM OF TRUSTEE’S CERTIFICATE OF
AUTHENTICATION.  The Trustee’s certificate of authentication
on all Notes shall be in substantially the following form:

This
is one of the Notes referred to in the within-mentioned Indenture.

	
   

  	
  The Bank
  Of New York,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  

 

SECTION
2.06   REMOVAL OF PRIVATE
PLACEMENT LEGEND.

Each
Restricted Global Note (and all Notes representing a beneficial interest
therein) will bear the Private Placement Legend set forth in Section 2.02
hereof unless removal is permitted by the following paragraphs:

(a)           Upon any sale or
transfer of a Transfer Restricted Security pursuant to Rule 144, the Trustee,
as Custodian, shall make an appropriate endorsement on the Global Notes,
whereupon the Trustee, in accordance with the Applicable Procedures, shall
instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records reflecting the transfer to such
transferee of a beneficial interest in the Unrestricted Global Note of like
series, tenor and amount for such transferee’s own account, if the transferor
thereof

 

45

 

certifies
in writing to the Depositary that such sale or transfer was made in reliance on
Rule 144 (such certification to be in the form set forth on the reverse of the
Note).

(b)           Upon any sale or
transfer of a Transfer Restricted Security pursuant to a Shelf Registration
Statement, the Trustee, as Custodian, shall make an appropriate endorsement on
the Global Notes, whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records reflecting the transfer to such
transferee of a beneficial interest in the Unrestricted Global Note of like
series, tenor and amount for such transferee’s own account.

 

46

 

ARTICLE
THREE

THE NOTES

SECTION
3.01   TITLE AND TERMS.

(a)           The Notes shall be known and
designated as the “Senior Secured  Notes
Due 2007” of the Company.  The aggregate
principal amount of Notes which may be authenticated and delivered from time to
time under this Indenture is limited to $508,703,356, except for (i) Additional
Notes issued in payment of interest on the Notes as provided in Section
3.01(c), and (ii) Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Sections 3.04, 3.08, 3.09, 4.08, 5.16, 5.18 and 10.06.

(b)           The Stated Maturity
of the principal of the Notes shall be August 1, 2007, unless extended at the
option of the Company as set forth below. 
At any time on or prior to the 90th day prior to the then
scheduled Stated Maturity, the Company may elect (the “Extension Election”) to extend the
Stated Maturity of the principal of all of the Notes Outstanding from the then
scheduled Stated Maturity to August 1, 2008. 
In order to validly make the Extension Election, (i) the Company must
provide written notice to the Trustee and the Holders of the Extension Election
not later than 90 days prior to the then scheduled Stated Maturity of the
principal of the Notes, (ii) the Company must pay to the Holders of the Notes a
cash fee (the “Extension Fee”)
equal to 4.00% of the principal amount of the Notes Outstanding on August 1,
2007; (iii) the Company must deposit with the Trustee not later than August 1,
2007 an amount in cash sufficient to pay the interest and Additional Amounts,
if any, that would accrue on the Notes during the first quarterly interest
period following such extension (based on the amount of Notes Outstanding on
August 1, 2007); and (iv) no Default or Event of Default shall have occurred
and be continuing on August 1, 2007 or shall occur as a result of the Company
making the Extension Election.  The
Company shall deliver to the Trustee at the time of such Extension Election an
Officers’ Certificate stating that no Default or Event of Default shall have
occurred and be continuing.  The
Extension Fee shall be paid together with the installment of interest and
Additional Amounts, if any, due on the Interest Payment Date that occurs on
August 1, 2007 to the Holder of record on the Regular Record Date with respect
to such Interest Payment Date.

(c)           The Notes shall bear
interest at the rate of 10-1/2% per annum, from the Initial Issuance Date, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, payable semiannually in arrears on
February 1 and August 1 of each year, commencing February 1, 2005, until the
principal thereof is paid or made available for payment; provided, however, that if the Company
makes the Extension Election, (i) the interest rate payable during the
additional one year period of the extended term of the Notes shall be 12.00%
per annum; (ii) the interest that would accrue for the period ending on
November 1, 2007 shall be paid, quarterly in advance, commencing on August 1,
2007, as set forth in Section 3.01(b); and (iii) the interest due for the
remaining term of the Notes shall be paid quarterly in advance on November 1,
2007, February 1, 2008 and May 1, 2008. 
The interest due on any Interest Payment Date occurring on or prior to
August 1, 2007 other than pursuant to the exercise of the Extension Election
shall be paid as follows:

 

47

 

(i)            The Company may pay any portion of the interest due on
such Interest Payment Date in cash at the rate of 10-1/2% per annum; provided, that the Company shall be
required to pay interest at the rate of at least 2.00% per annum (the “Minimum Cash Rate”) in cash on each
Interest Payment Date (the amount of interest that the Company pays in cash on
any such Interest Payment Date, expressed as an annual percentage rate, is
referred to herein as the “Cash Interest
Rate”).

(ii)           On each Interest Payment Date occurring on or prior to
August 1, 2007 other than pursuant to the exercise of the Extension Election,
the Company may elect to pay any interest due on such Interest Payment Date in
excess of the portion of such interest paid in cash at the Minimum Cash Rate
through the issuance to the Holders of (x) Additional Notes in a principal amount
equal to the amount of interest due on such Interest Payment Date in excess of
the portion of such interest paid at the Cash Interest Rate, (y) a number of
ADSs equal to the quotient of (A) the interest due on such Interest Payment
Date in excess of the portion of such interest paid at the Cash Interest Rate
and (B) the product of (1) 0.95 and (2) the Volume Weighted Average Price per
ADS for the 20 trading days immediately preceding the Record Date for such
Interest Payment Date, or (z) a combination of (x) and (y), in any such case in
an amount equal to the aggregate amount of interest due on such Interest
Payment Date in excess of the portion of such interest paid at the Cash
Interest Rate.  In the event that the
Company elects to pay any portion of the interest due on any Interest Payment
Date other than in cash as permitted above, the annual interest rate applicable
to the interest due on such Interest Payment Date shall be the Applicable Rate
set forth below minus the Cash Interest Rate for such Interest Payment Date:

	
  Interest Payment Date

  	
   

  	
  Applicable Interest Rate

  
	
  February 1, 2005

  	
   

  	
  12.00%

  
	
  August 1, 2005

  	
   

  	
  12.00%

  
	
  February 1, 2006

  	
   

  	
  12.00%

  
	
  August 1, 2006

  	
   

  	
  12.00%

  
	
  February 1, 2007

  	
   

  	
  12.50%

  
	
  August 1, 2007

  	
   

  	
  13.00%

  

 

The
Company shall be responsible for the computation of the principal amount of
Additional Notes or the number of ADSs to be issued on any Interest Payment
Date and shall certify such amount or number to the Trustee.  To the extent that the computation of the
principal amount of Additional Notes or the number of ADSs to be issued on any
Interest Payment Date would result in the issuance to any Holder of a
fractional Additional Note or a fractional ADS, the Company shall, at its
option, either (i) pay cash in respect of such fraction in an amount equal to
the principal amount of such fractional Additional Note or the Volume Weighted
Average Price of such fractional ADS, as applicable, or (ii) round such
fractional Additional Note or ADS up to the nearest whole Additional Note or
ADS. In computing the fractional Additional Note or ADS applicable to any
Holder, the interest due on all Notes owned beneficially or of record by such
Holder shall be aggregated.

 

48

 

The
Company shall deliver a notice to the Trustee and the Holders of any election
to pay any portion of the interest as provided above in Additional Notes or
ADSs on an Interest Payment Date as provided above at least five Business Days
prior to the related Regular Record Date. 
Such notice shall specify the types and percentage amounts of the
non-cash interest to be paid on such Interest Payment Date.  Any Additional Notes issued in payment of
interest shall be delivered to the Trustee not later than the close of business
on the Business Day immediately preceding the applicable Interest Payment Date
and shall be registered in the name of the Holder entitled to receive such
payment of interest.  Each such Note
shall be dated as of the applicable Interest Payment Date in respect of which
it is issued, shall accrue interest from the applicable Interest Payment Date
in respect of which it is issued, shall be an additional obligation of the
Company and the Guarantors and shall be governed by, and entitled to the
benefits of, this Indenture, the Guarantees and the Collateral Documents on the
same terms as the Notes in respect of which such Additional Notes were issued
(except, as the case may be, with respect to the date of issuance and the
principal amount thereof).  Any ADSs
issued in payment of interest shall be delivered to the Trustee not later than
the close of business on the Business Day immediately preceding the applicable
Interest Payment Date and shall be registered in the name of the Holder
entitled to receive such payment of interest. 
As a condition to the ability of the Company to elect to issue ADSs in
payment of any portion of the interest due on any Interest Payment Date, the
Company shall have in effect as of such Interest Payment Date a registration
statement under the Securities Act covering the ADSs to be issued or shall
provide to the Trustee an Opinion of Counsel to the effect that no such
registration is necessary and that the ADSs to be issued on such Interest
Payment Date will be freely transferable under the Securities Act by any Holder
other than an “affiliate” of the Company.

(iii)          Notwithstanding the foregoing, in the event that the
Company makes the Extension Election, (x) the applicable interest rate for each
Interest Payment Date occurring during such extended term shall be 12.00% per
annum (subject to reduction as set forth in clause (iv), below) and (y) all
payments of interest due on each Interest Payment Date occurring during such
extended term (including August 1, 2007) shall be paid quarterly in advance on
August 1, 2007, November 1, 2007, February 1, 2008 and May 1, 2008, and only in
cash.

(iv)          In the event that the Company (A) redeems Notes pursuant to
Section 4.01, (B) offers to repurchase Notes pursuant to Section 5.16 or
pursuant to an Excess Proceeds Offer pursuant to Section 5.18 (and the Company
purchases all Notes validly tendered in accordance with the terms of such offer
to purchase (or a prorated amount thereof in accordance with the terms of such
offer to purchase)), or (C) exchanges Notes pursuant to a Qualifying Exchange
(each, a “Voluntary Reduction”)
and the cumulative principal amount of all Voluntary Reductions after the
Initial Issuance Date equals the respective amount set forth below, the annual
interest rate payable on the Notes pursuant to this Section 3.01(c) (including
after the exercise of the Extension Election) shall be reduced by the
applicable amount set forth below:

	
  Voluntary
  Reduction Amount

  	
   

  	
  Interest Rate Reduction

  
	
   

  	
   

  	
   

  
	
  less than $100,000,000

  	
   

  	
  0.00%

  

 

49

 

	
  $100,000,000 up to
  $150,000,000

  	
   

  	
  0.67%

  
	
  more than $150,000,000

  	
   

  	
  1.00%

  

 

;
provided that such interest rate reduction shall not be more than 1.00% per
annum in the aggregate.

Any
such interest rate reduction shall become effective at the time the Company
redeems, repays, repurchases or otherwise retires the applicable Voluntary
Reduction amount or, in the case of any offer to purchase pursuant to
Section 5.16 or 5.18 or otherwise, at the applicable Repurchase Date or
expiration date (so long as all Notes validly tendered for purchase on such
Repurchase Date or expiration date are purchased pursuant to such offer to
purchase); provided, that if such
date occurs on or after the Regular Record Date for any payment of interest,
such interest rate reduction shall become effective on the next Interest
Payment Date following the Interest Payment Date related to such Regular Record
Date.  In the event of any Voluntary
Reduction, the Company shall give the Trustee an Officers’ Certificate
certifying that such Voluntary Reduction has occurred, that it has complied
with the provisions of this Section 3.01(c)(iv), and the amount of the interest
rate reduction and the effective date of the interest rate reduction.  The Trustee shall have no duty or responsibility
to determine the accuracy or correctness of this computation and shall be fully
protected in relying on such Officers’ Certificate.  In the event that any Voluntary Reduction results in an interest
rate reduction, the Trustee shall give notice to all holders of such Voluntary
Reduction, the amount of the interest rate reduction and the effective date of
the interest rate reduction.

(d)           The principal of
(and premium, if any), interest and Additional Amounts, if any, on the Notes
shall be payable at the office or agency of the Company in New York, New York
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; or, at the option of the Company, payment of interest
and Additional Amounts, if any, may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Note Register; provided
that any Holder of more than $2 million in aggregate principal amount of Notes
that has so elected and given wire transfer instructions to the Company shall
be entitled receive all payments of principal and interest and Additional
Amounts with a Regular Record Date after the date the Company receives such
notice with respect to Notes held by such Holders by wire transfer of immediately
available funds within the United States to the accounts specified by the
Holders thereof.  Payment of any
non-cash interest through the issuance of Additional Notes or the delivery of
ADRs shall be effected by delivery of the certificates representing such
Additional Notes or ADRs, in the case of any Global Notes, to the Custodian,
and, in the case of the Definitive Notes, to the Holder entitled thereto by
mailing such certificates to the address shown on the Note Register.  Until otherwise designated by the Company,
the Company’s office or agency in New York will be the office of the Trustee
maintained for such purpose.  The Notes
will be issued in denominations of $1.00 and integral multiples thereof.  Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

Initially,
The Bank of New York, the Trustee under the Indenture, will act as Paying Agent
and Note Registrar.  The Company may
change any Paying Agent or Note Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act in any such capacity.  Non-cash
interest, if any, shall be paid by depositing the applicable Additional

 

50

 

Notes and/or ADRs with the Custodian in the case of Global Notes and by
mailing the applicable Additional Notes and/or ADRs to the address of the
Person entitled thereto as such address shall appear in the Note Register.

(e)           The Notes shall be
redeemable as provided in Article Four.

(f)            The Initial Notes
and the Additional Notes shall be treated as a single class for all purposes
under this Indenture.

SECTION 3.02   DENOMINATIONS; PAYMENT CURRENCY.  The Notes
shall be issuable only in fully registered form without coupons and only in
denominations of $1.00 and any integral multiple thereof.  All cash payments in respect of principal of
and premium, if any, and interest and Additional Amounts on the Notes shall be
in United States Dollars.

SECTION 3.03   EXECUTION,
AUTHENTICATION, DELIVERY AND DATING.  The Notes
shall be signed on behalf of the Company by its Chief Executive Officer, its
Director General, its Chief Operating Officer, or its Chief Financial Officer,
and by its Director of Administration, its Treasurer or any other duly
authorized officer.  Such signatures may
be manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Notes.

Only
such Notes as shall bear a certificate of authentication substantially in the
form hereinbefore recited, manually executed by the Trustee, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any
purpose.  Such certificate by the
Trustee upon any Note executed by the Company shall be conclusive evidence that
the Note so authenticated has been duly authenticated and delivered hereunder.

Notes
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Company and the Guarantors shall bind the Company
and the Guarantors, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.

At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company and the
Guarantors to the Trustee for authentication. 
The Trustee shall thereupon authenticate and deliver such Notes to the
Company or as directed by a Company Order, without any further action by the
Company or the Guarantors.

Each
Note shall be dated the date of its authentication.

SECTION 3.04   TEMPORARY
NOTES.  Pending the
preparation of definitive Notes, the Company may execute, and, upon compliance
with Section 3.03, the Trustee shall authenticate and deliver, temporary Notes
substantially of the tenor of the Definitive Notes in lieu of which they are
issued, which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, and with such appropriate insertions,

 

51

 

omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.

If
temporary Notes are issued, the Company will cause Definitive Notes to be
prepared without unreasonable delay. 
After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Company in a Place of Payment.  Upon surrender for cancellation of any one
or more temporary Notes, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations and of like tenor.  Until so exchanged, the temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
definitive Notes.

SECTION 3.05   NOTE REGISTRAR AND PAYING AGENT.  The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Note Registrar”) and
an office or agency where Notes may be presented for payment (“Paying
Agent”).  The Note
Registrar shall keep a register of the Notes and of their transfer and exchange
(the “Note
Register”).  The Company
may appoint one or more co-registrars and one or more additional paying
agents.  The term “Note Registrar”
includes any co-registrar and the term “Paying Agent”
includes any additional paying agent. 
The Company may change any Paying Agent or Note Registrar without notice
to any Holder.  The Company shall notify
the Trustee in writing of the name and address of any agent not a party to this
Indenture.  If the Company fails to
appoint or maintain another entity as Note Registrar or Paying Agent, the
Trustee shall act as such.  The Company
or any of its Subsidiaries may act as Paying Agent or Note Registrar.

The
Company initially appoints DTC to act as Depositary with respect to the Global
Notes.

The
Company initially appoints the Trustee to act as the Note Registrar and Paying
Agent and to act as Custodian with respect to the Global Notes.

The
Company shall, prior to each Regular Record Date, notify the Paying Agent of
any wire transfer instructions for payments that it receives from Holders.

SECTION 3.06   PAYING AGENT TO HOLD MONEY IN TRUST.  The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest or Additional Amounts on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment.  While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee.  The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money.  If the Company
or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying
Agent.  Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.

 

52

 

SECTION 3.07   HOLDER
LISTS.  The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders and shall
otherwise comply with Section 312(a) of the Trust Indenture Act.  If the Trustee is not the Note Registrar,
the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company
shall otherwise comply with Section 312(a) of the Trust Indenture Act.

SECTION
3.08   TRANSFER AND EXCHANGE.

(a)           Transfer and
Exchange of Global Notes.  (i)
Except as provided in this Section 3.08 and the sections of the Indenture
referenced herein, notwithstanding any other provision in this Indenture, no
Global Note may be exchanged in whole or in part for Definitive Notes, and no
transfer of a Global Note in whole or in part may be registered, in the name of
any Person other than the Depositary for such Global Notes or a nominee thereof
unless (i) such Depositary or the Trustee has notified the Company that the
Depositary (A) is unwilling or unable to continue as Depositary for such Global
Notes or (B) has ceased to be a clearing agency registered as such under the
Exchange Act, and in either case the Company fails to appoint a successor
Depositary within 120 days of such notice, (ii) the Company executes and
delivers to the Trustee a Company Order stating that it elects to cause the
issuance of the Notes in definitive form and that all Global Notes shall be
exchanged in whole for Definitive Notes (in which case such exchange shall be
effected by the Trustee) or (iii) there shall have occurred and be continuing
an Event of Default with respect to the Notes. 
Notwithstanding the foregoing provisions of this Section 3.08(a), Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 3.04 and 3.09 hereof.  A Global
Note may not be exchanged for another Note other than as provided in this
Section 3.08(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 3.08(b) or (c) hereof.

(b)           Transfer and
Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes shall be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures.

(i)            If
any Global Note is to be exchanged for other Notes or cancelled in whole, it
shall be surrendered by or on behalf of the Depositary or its nominee to the
Trustee, as Note Registrar, for exchange or cancellation as provided in this
Article Three.  If any Global Note is to
be exchanged for other Notes or cancelled in part, or if another Note is to be
exchanged in whole or in part for a beneficial interest in any Global Note,
then either (i) such Global Note shall be so surrendered for exchange or
cancellation as provided in this Article Three or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or cancelled, or equal to the principal amount of such other
Note to be so exchanged for a beneficial interest therein, as the case may be,
by means of an appropriate endorsement made on the Global Notes by the Trustee,
as Custodian, whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records.  Upon any such

 

53

 

surrender or adjustment of a Global Note, the Trustee shall, as
provided in this Article Three, authenticate and deliver any Notes issuable in
exchange for such Global Note (or any portion thereof) to or upon the order of,
and registered in such names as may be directed by, the Depositary or its
authorized representative.  Upon the
request of the Trustee in connection with the occurrence of any of the events
specified in Section 3.08(a), the Company shall promptly make available to the
Trustee a reasonable supply of Definitive Notes that are not in the form of
Global Notes.  The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary or its
authorized representative which is given or made pursuant to this Article Three
if such order, direction or request is given or made in accordance with the
Applicable Procedures and in accordance with all applicable laws.  Every Note authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Note or
any portion thereof, whether pursuant to this Article Three or otherwise, shall
be authenticated and delivered in the form of, and shall be, a Global Note,
unless such Note is registered in the name of a Person other than the
Depositary for such Global Note or a nominee thereof.

(ii)           The Depositary or its nominee, as registered owner of a
Global Note, shall be the Holder of such Global Note for all purposes under
this Indenture and the Notes and owners of beneficial interests in a Global
Note shall hold such interests pursuant to the Applicable Procedures.  Accordingly, any such owner’s beneficial
interest in a Global Note will be shown only on, and the transfer of such
interest shall be effected only through, records maintained by the Depositary
or its nominee or its Participants.

(c)           Cancellation
and/or Adjustment of Global Notes. 
At such time as all beneficial interests in a particular Global Note
have been exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or cancelled in whole and not in part, each such Global
Note shall be returned to or retained and cancelled by the Trustee in accordance
with Section 3.12 hereof.  At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction to reflect such increase.

(d)           General
Provisions Relating to Transfers and Exchanges.  Subject to the other provisions of this Indenture regarding
restrictions on transfer, and authentication, upon surrender for registration
of transfer of any Note at any office or agency of the Company designated
pursuant to Section 5.02 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one

 

54

 

or
more new Notes of any authorized denominations, of a like aggregate principal
amount and bearing such restrictive legends as may be required by this Indenture.

At
the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination and of a like aggregate principal amount and Stated
Maturity, upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for
exchange, the Company and the Guarantors shall execute and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive.

All
Notes (including the accompanying Guarantees) issued upon any registration of
transfer or exchange of Notes shall be the valid obligations of the Company and
the Guarantors, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Notes (including the accompanying Guarantees)
surrendered upon such registration of transfer or exchange.

Every
Note presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.

No
service charge shall be made for any registration of transfer or exchange of
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes (other than any such transfer
taxes or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.04, 4.08, 5.16, 5.18 and 10.06 hereof).

Neither
the Company nor the Trustee nor any agent of either shall be required
(i) to issue, authenticate, register the transfer of or exchange any Note
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption hereunder and ending at the close of
business on the day of the mailing of a notice of redemption of Notes selected
for redemption, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.

(e)           Transfer and
Exchange of Definitive Notes.  When
Definitive Notes are presented to the Trustee with a request:

(x)  to register the transfer of such
Definitive Notes or

(y)  to exchange such Definitive Notes
for an equal principal amount of Definitive Notes of other authorized
denominations,

the Trustee will register
the transfer or make the exchange as requested if its reasonable requirements
for such transaction are met; provided, however, that any Definitive Notes
surrendered for transfer or exchange:

 

55

 

(i)            are
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Trustee, duly executed by the
Holder thereof or its attorney duly authorized in writing; and

(ii)           if
such Definitive Notes are required to bear a restricted securities legend, they
are being transferred or exchanged pursuant to an effective registration
statement under the Securities Act, pursuant to Section 3.08(f) hereof or
pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:

(A)          if such Definitive
Notes are being delivered to the Note Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such Holder to
that effect; or

(B)           if such Definitive
Notes are being transferred to the Company, a certification to that effect; or

(C)           if such Definitive
Notes are being transferred (x) pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144 or another exemption from
the registration requirements of the Securities Act or (y) in reliance upon
another exemption from the requirements of the Securities Act:  (1) a certification to that effect (in the
form set forth on the reverse of the Note) and (2) if the Company so requests,
an Opinion of Counsel or other evidence reasonably satisfactory to it as to
compliance with the restrictions set forth in the legend set forth in Section
2.02 hereof.

(f)            Restrictions on
Transfer of a Definitive Note for a Beneficial Interest in a Restricted Global
Note.  A Definitive Note may not be
exchanged for a beneficial interest in a Rule 144A Global Note, an IAI Global
Note or a Regulation S Global Note except upon satisfaction of the requirements
set forth below.  Upon receipt by the
Trustee of a Definitive Note, duly endorsed or accompanied by a written
instrument of transfer, in form reasonably satisfactory to the Trustee,
together with:

(i)            certification,
in the form set forth on the reverse of the Note, that such Definitive Note is
(A) being transferred to a QIB in accordance with Rule 144A, (B) being
transferred after expiration of the Distribution Compliance Period by a Person
who initially purchased such Note in reliance on Regulation S to a buyer who
elects to hold its interest in such Note in the form of a beneficial interest
in the Regulation S Global Security or (C) being transferred to an
Institutional Accredited Investor pursuant to exemptions from the registration
requirements of the Securities Act; and

(ii)           written
instructions directing the Trustee to make, or to direct the Custodian to make,
an adjustment on its books and records with respect to such Rule 144A Global
Note (in the case of a transfer pursuant to clause (f)(i)(A)), Regulation S
Global Note (in the case of a transfer pursuant to clause (f)(i)(B)) or IAI
Global Note (in the case of a transfer pursuant to clause (f)(i)(C)) to reflect
an increase in the aggregate principal amount of the Notes represented by the
Rule 144A Global Note, Regulation S

 

56

 

Global Note or IAI Global Note, as
applicable, such instructions to contain information regarding the Depositary
account to be credited with such increase,

then the Trustee will cancel such Definitive Note and cause, or direct
the Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian, the aggregate
principal amount of Notes represented by the Rule 144A Global Note, IAI Global
Note or Regulation S Global Note, as applicable, to be increased by the
aggregate principal amount of the Definitive Note to be exchanged and will
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Rule 144A Global Note, IAI Global
Note or Regulation S Global Note, as applicable, equal to the principal amount
of the Definitive Note so canceled.  If
no Rule 144A Global Notes, IAI Global Notes or Regulation S Global Notes, as
applicable, are then outstanding, the Company will issue and the Trustee will
authenticate, upon written order of the Company in the form of an Officers’
Certificate, a new Rule 144A Global Note, IAI Global Note or Regulation S
Global Note, as applicable, in the appropriate principal amount.

(g)           Exchanges Among Rule 144A Global Notes, IAI
Global Notes and Regulation S Global Notes.  Prior to and after
the expiration of the Distribution Compliance Period, beneficial interests in a
Regulation S Global Note may be exchanged for beneficial interests in a Rule
144A Global Note or an IAI Global Note only if (i) such exchange occurs in
connection with a transfer of the Notes pursuant to Rule 144A or other
registration exemptions under the Securities Act and (ii) the transferor first
delivers to the Trustee a written certificate (such certificate to be in the
form set forth on the reverse of the
Note) to the effect that the Notes are being transferred to a Person
(A) who the transferor reasonably believes to be a QIB purchasing for its
own account or a Person purchasing for the account of a QIB in a transaction
meeting the requirements of Rule 144A or (B) who the transferor reasonably
believes to be an Institutional Accredited Investor purchasing for its own
account or a Person purchasing for the account of an Institutional Accredited
Investor in a transaction meeting the requirements of other registration
exemptions under the Securities Act, in each case in accordance with all
applicable securities laws of the states of the United States and other
jurisdictions.

Beneficial
interests in a Rule 144A Global Note or an IAI Global Note may be transferred
to a Person who takes delivery in the form of an interest in a Regulation S
Global Note, whether before or after the expiration of the Distribution
Compliance Period, only if the transferor first delivers to the Trustee a
written certificate (such certificate to be in the form set forth on the
reverse of the Note) to the effect that such transfer is being made in
accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and
that, if such transfer occurs prior to the expiration of the Distribution
Compliance Period, the interest transferred will be held immediately thereafter
through Euroclear or Clearstream.

                                Beneficial
interests in an IAI Global Note may be transferred to a Person who takes
delivery in the form of an interest in a Rule 144A Global Note only if the
transferor first delivers to the Trustee a written certificate (such
certificate to be in the form set forth on
the reverse of the Note) to the effect that the Notes are being
transferred to a Person who the transferor reasonably believes to be a QIB
purchasing for its own account or a Person purchasing for the account of a QIB
in a transaction meeting the requirements of Rule 144A, in accordance with
all applicable securities laws of the states of the United States and other
applicable

 

57

 

jurisdictions.  Beneficial
interests in a Rule 144A Global Note may be transferred to a Person who takes
delivery in the form of an interest in an IAI Global Note only if the
transferor first delivers to the Trustee a written certificate (such
certificate to be in the form set forth on
the reverse of the Note) to the effect that the Notes are being
transferred to a Person  who the transferor reasonably believes to be an
Institutional Accredited Investor purchasing for its own account or a Person
purchasing for the account of an Institutional Accredited Investor in a
transaction meeting the requirements of other registration exemptions under the
Securities Act, in accordance with all applicable securities laws of the states
of the United States and other applicable jurisdictions.

Transfers involving exchanges among beneficial interests in a Rule 144A
Global Note, an IAI Global Note and a Regulation S Global Note will be effected
through the Depositary by means of an instruction originated by the Trustee
through the DTC Deposit/Withdraw at Custodian system.  Accordingly, in connection with any such transfer, appropriate
adjustments will be made to reflect a decrease in the principal amount of one
such Restricted Global Note and a corresponding increase in the principal
amount of the other such Restricted Global Note.  Any beneficial interest in one of the Restricted Global Notes
that is transferred to a Person who takes delivery in the form of an interest
in another Restricted Global Note will, upon transfer, cease to be an interest
in such Restricted Global Note and will become an interest in such other
Restricted Global Note and, accordingly, will thereafter be subject to all
transfer restrictions and other procedures applicable to the beneficial
interest in such other Restricted Global Note for so long as it remains such an
interest.  The policies and practices of
the Depositary may prohibit transfers of beneficial interests in the Regulation
S Global Note prior to the expiration of the Distribution Compliance Period.

(h)           Transfer and
Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if:

                                (A) such transfer is effected pursuant to a
Shelf Registration Statement in accordance with the Registration Rights
Agreement or otherwise effected pursuant to an effective registration statement
under the Securities Act; or

                                (B)  the Trustee receives a certificate from the
transferor in the form set forth on the reverse of the Note, including the
certifications in box (6) thereof;

                                and, in each such case set forth in this
subparagraph (B), if the Trustee or the Company so requests, an Opinion of
Counsel in form reasonably acceptable to the Trustee and the Company to the
effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.

                                Beneficial interests in an Unrestricted
Global Note cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.

 

58

 

SECTION 3.09   MUTILATED,
DESTROYED, LOST AND STOLEN NOTES.  If any
mutilated Note is surrendered to the Trustee, the Company and the Guarantors
shall execute, and the Trustee shall authenticate and deliver in exchange
therefor a new Note (including the accompanying Guarantees) of like tenor,
principal amount and Stated Maturity and bearing a number not contemporaneously
outstanding.

If
there shall be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by them to hold each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Note has been acquired by a bona fide purchaser, the
Company and the Guarantors shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor, principal amount and Stated Maturity and bearing a number
not contemporaneously outstanding. If after the delivery of such new Note, a
bona fide purchaser of the original Note in lieu of which such new Note was
issued presents for payment such original Note, the Company and the Trustee
shall be entitled to recover such new Note from the person to whom it was
delivered or any transferee thereof, except a bona fide purchaser of such new
Note, and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Company or the Trustee in connection therewith.

In
case any such mutilated, destroyed, lost or stolen Note has become or is about
to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.

Upon
the issuance of any new Note under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.

Except
as provided above, every new Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and the Guarantors, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

The
provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

SECTION 3.10   PAYMENT OF INTEREST; INTEREST RIGHTS
PRESERVED.  Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest.

Any
interest on any Note which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (which, together with interest on
overdue

 

59

 

installments of interest, to the extent legally enforceable under
applicable law, at the Default Rate is herein called “Defaulted Interest”) shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:

(1)   The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner: The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Note and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as provided
in this clause (1). Thereupon the Company shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment.  The Company shall promptly
notify the Trustee in writing of such Special Record Date and the Trustee, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first class postage prepaid, to each Holder at his address as it
appears in the Note Register, not less than 10 days prior to such Special
Record Date.  Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Notes (or their respective Predecessor Notes) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).

(2)   The
Company may make payment of any Defaulted Interest on the Notes in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which such Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.

Subject
to the foregoing provisions of this Section, each Note delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.

SECTION 3.11   PERSONS
DEEMED OWNERS.  Prior to due presentation of a Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Note is registered as the owner of such Note for
the purpose of receiving payment of principal of, premium, if any, and (subject
to Section 3.10) interest and Additional Amounts, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and neither
the Company, the Trustee nor any agent of the Company, or the Trustee shall be
affected by notice to the contrary.

 

60

 

SECTION
3.12   CANCELLATION.  All Notes surrendered for
payment, redemption, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it.  The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled by
the Trustee.  No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture.  All canceled Notes held by the Trustee shall
be destroyed by the Trustee (subject to the record retention requirements of
the Exchange Act) and, upon written request of the Company, the Trustee shall
deliver to the Company a certificate of destruction in respect thereof.

SECTION 3.13   COMPUTATION OF INTEREST.  Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months.

SECTION
3.14   RANKING; SUBORDINATION.

(a)   The
Notes rank pari
passu in right of payment to all existing or future senior
Indebtedness of the Company and rank senior to all of the Company’s existing
and future subordinated Indebtedness. 
All Indebtedness, notes, claims and payments owed by the Company or any
Guarantor to any Restricted Subsidiary of the Company shall be subordinated in
right of payment to the Notes.

SECTION 3.15   CUSIP
NUMBERS.  The Company
in issuing the Notes may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” numbers in notices as a convenience to
Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice and that reliance may be placed only on the other identification
numbers printed on the Notes and any such redemption shall not be affected by
any defect in or omission of such numbers. 
The Company will promptly notify the Trustee of any change in the
“CUSIP” numbers.

ARTICLE FOUR

REDEMPTION OF NOTES

SECTION 4.01   APPLICABILITY OF ARTICLE.  Redemption
of Notes at the election of the Company as permitted by any provision of this
Indenture, shall be made in accordance with such provision and this Article.

SECTION
4.02   RIGHT OF REDEMPTION.

(a)           The
Notes may be redeemed at the election of the Company, in whole or from time to
time in part, at any time at a Redemption Price equal to (i) 100% of the
principal amount of the Notes to be redeemed, plus accrued and unpaid interest
and Additional Amounts, if any, to the Redemption Date, until such time as the
Company has repaid, redeemed or otherwise retired $150,000,000 in aggregate
principal amount of the Notes, and thereafter (ii) 101% of the principal amount
of the Notes to be redeemed, plus accrued and unpaid interest and Additional
Amounts, if any, to the Redemption Date.

 

61

 

(b)           In
the event of any redemption of the Notes, or repurchase or other retirement of
the Notes pursuant to Sections 5.16 or 5.18, before the Company shall have
previously repaid, redeemed or otherwise retired $150,000,000 in aggregate
principal amount of the Notes and, following such redemption, repurchase or
other retirement, the Company will have previously repaid, redeemed or
otherwise retired more than $150,000,000 in aggregate principal amount of the
Notes, then the additional 1.00% portion of the Redemption Price, Repurchase
Price or other price applicable to the principal amount of the Notes to be
repaid, redeemed or otherwise retired in excess of such $150,000,000 shall be
pro-rated among and paid upon redemption, repurchase or other retirement of all
of the Notes to be repaid, redeemed or otherwise retired in connection with
such redemption, repurchase or retirement.

SECTION 4.03   ELECTION
TO REDEEM; NOTICE TO TRUSTEE.  The election
of the Company to redeem any Notes pursuant to Section 4.02 shall be evidenced
by a Board Resolution.  In case of any
partial redemption at the election of the Company, the Company shall, at least
60 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee by Company
Order of such Redemption Date and of the principal amount of Notes to be redeemed.

SECTION 4.04   SELECTION BY TRUSTEE OF NOTES TO BE
REDEEMED.  If less than all the Notes are to be redeemed, the particular
Notes to be redeemed shall be selected not more than 60 nor less than 30 days
prior to the Redemption Date by the Trustee, from the Outstanding Notes not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $1.00 or any integral multiple thereof) of the principal amount
of Notes of a denomination larger than $1.00.

The
Trustee shall promptly notify the Company and each Note Registrar in writing of
the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.

For
all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Notes shall relate, in the case of any
Notes redeemed or to be redeemed only in part, to the portion of the principal
amount of such Notes which has been or is to be redeemed.

SECTION 4.05   NOTICE
OF REDEMPTION.  Notice of
redemption shall be given by the Company by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
the Trustee and each Holder of Notes to be redeemed, at his address appearing
in the Note Register.

All
notices of redemption shall state:

(1)   the
Redemption Date;

(2)   the
Redemption Price and the amount of accrued and unpaid interest and Additional
Amounts, if any, to the Redemption Date;

 

62

 

(3)   if
less than all of the Outstanding Notes are to be redeemed, the identification
(and, in the case of partial redemption, the principal amounts to be redeemed)
of the particular Notes to be redeemed;

(4)   that
on the Redemption Date the Redemption Price and accrued and unpaid interest and
Additional Amounts, if any, will become due and payable upon each such Note to
be redeemed and that interest thereon will cease to accrue on and after said
date;

(5)   the
place or places where such Notes are to be surrendered for payment of the
Redemption Price and accrued and unpaid interest and Additional Amounts, if
any;

(6)           the CUSIP number or numbers, if any,
of the Notes called for redemption; and

(7)           that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.

Notice
of redemption of Notes to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request, by the Trustee in the name
and at the expense of the Company.

SECTION 4.06   DEPOSIT OF REDEMPTION PRICE.  The Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 5.03) an amount of money in immediately available funds by 10:00 a.m.,
New York City time, on such Redemption Date sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued and unpaid interest and Additional Amounts on, all the Notes which are
to be redeemed on that date.

SECTION 4.07   NOTES PAYABLE ON REDEMPTION DATE.  Notice of redemption having been given as aforesaid, the Notes so
to be redeemed shall on the Redemption Date become due and payable at the
Redemption Price plus accrued and unpaid interest and Additional Amounts, if
any, therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest and
Additional Amounts) such Notes shall cease to bear interest.  Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued and unpaid interest, if
any, and Additional Amounts, if any, to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Notes, or one or more Predecessor Notes,
registered as such at the close of business on the relevant Record Dates
according to the terms and the provisions of Section 3.05.

Notwithstanding
the foregoing, the Trustee shall not redeem any Notes or mail any notice of
optional redemption during the continuance of a default in payment of interest
on the Notes or of any Event of Default.

 

63

 

If
any Note called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear
interest from the Redemption Date at the Default Rate.

SECTION 4.08   NOTES
REDEEMED IN PART.  Any Note which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 5.02 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.

SECTION 4.09   OPTIONAL REDEMPTION DUE TO CHANGES IN
TAX TREATMENT. 
The Notes may be redeemed at the option of the Company in whole but not
in part at any time at a Redemption Price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Additional Amounts, if any, to
the date fixed for redemption if, as a result of any change in or amendment to
the laws or any regulations or rulings promulgated thereunder of the United
Mexican States (or of any political subdivision or taxing authority thereof or
therein) or any change in the official application or interpretation of such laws,
regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties
affecting taxation to which the United Mexican States (or such political
subdivision or taxing authority) is a party, which change, execution or
amendment becomes effective after the Initial Issuance Date, the Company is or
would be required to pay additional amounts with respect to the Notes in excess
of the Additional Amounts payable on the Initial Issuance Date as described in
Section 2.03, and the payment of such additional amounts cannot be avoided by
the use of any reasonable measures available to the Company. Prior to the
giving of notice of redemption of such Notes pursuant to this Indenture, the Company
will deliver to the Trustee an Officers’ Certificate, stating that the Company
is entitled to effect such redemption based on an Opinion of Counsel that the
Company has or will become obligated to pay such additional amounts as a result
of such change or amendment. Such notice, once delivered by the Company to the
Trustee, will be irrevocable.

 

ARTICLE FIVE

COVENANTS

So
long as any of the Notes shall remain Outstanding, each of the Company and, as
applicable, the Guarantors, covenants as follows:

SECTION 5.01   PAYMENTS
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.  The Company will duly and punctually pay or cause to be paid the
principal of, premium, if any, interest and Additional Amounts on the Notes in
accordance with the terms of the Notes and this Indenture.

 

64

 

SECTION 5.02   MAINTENANCE OF OFFICE OR AGENCY.  The Company
and the Guarantors shall maintain in New York, New York an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company and the Guarantors in respect of the Notes and
this Indenture may be served.  The Company
and the Guarantors shall give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency.

The
Company and the Guarantors may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes, and may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company and the
Guarantors of their obligation to maintain an office or agency in accordance
with the requirements set forth above. 
The Company and the Guarantors shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

SECTION 5.03   MONEY FOR NOTE PAYMENTS TO BE HELD IN
TRUST.  If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest and Additional Amounts on any of the Notes, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest and Additional Amounts so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.

Whenever
the Company shall have one or more Paying Agents, it will, prior to each due
date of the principal of (and premium, if any) or interest and Additional
Amounts, if any, on any Notes, deposit with a Paying Agent a sum (or in the
case of interest payable in Additional Notes or ADSs, an aggregate amount of
such securities) sufficient to pay the principal (and premium, if any), or
interest, and Additional Amounts, if any, so becoming due, such sum (or
Additional Notes or ADSs) to be held in trust for the benefit of the Persons
entitled to such principal, premium, interest and Additional Amounts and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.

The
Company will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:

(1)   hold
all sums and securities held by it for the payment of the principal of (and
premium, if any) or interest and Additional Amounts on Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to, and
such securities distributed to, such Persons or otherwise disposed of as herein
provided;

(2)   give
the Trustee notice of any default by the Company (or any other obligor upon the
Notes) in the making of any payment of principal (and premium, if any) or
interest and Additional Amounts; and

 

65

 

(3)   at
any time during the continuance of any such default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums and deliver all such
securities so held in trust by such Paying Agent.

The
Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums and securities held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

Any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest and Additional Amounts, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and
Additional Amounts, if any, has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and (except to the extent such money is subject to
the Collateral Documents) the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in New York, New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company. The Company
hereby appoints the Trustee as the initial Note Registrar and Paying Agent for
the Notes.

SECTION 5.04   EXISTENCE.  Subject to Article Eleven, the
Company will do or cause to be done all things necessary to preserve and keep
in full force and effect its existence, and the rights (charter and statutory)
and franchises of the Company and each of its Restricted Subsidiaries; provided, however, that the Company shall
not be required to preserve the existence of any of its Restricted Subsidiaries
(subject to Article Eleven) or any such right or franchise if the Company shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.

SECTION 5.05   MAINTENANCE OF PROPERTIES; INSURANCE.  The Company will cause all vessels and properties used or useful
in the conduct of its business or the business of any of its Restricted
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the reasonable judgment of the Company may be necessary so
that the business carried on in connection therewith may be conducted in the
ordinary course consistent with the Company’s custom and practice at all times;
provided, however, that nothing
in this Section 5.05 shall

 

66

 

prevent the Company from discontinuing the operation or maintenance of
any of such vessels or properties if such discontinuance is, in the reasonable
judgment of the Company, desirable in the conduct of its business or the
business of any Restricted Subsidiary; provided, further, that such
discontinuance shall not be materially disadvantageous to the Holders.

For
so long as any vessel or property is deemed to be useful to the conduct of the
business of the Company or any of its Restricted Subsidiaries, the Company will,
or will cause its Restricted Subsidiaries to, maintain appropriate insurance,
in accordance with industry practice, on such vessels and properties.

SECTION 5.06   PAYMENT
OF TAXES.  The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment or charge whose amount, applicability or validity is being
contested in good faith by appropriate proceedings (including the making of any
deposit or guaranty required by law to pursue such proceedings).

SECTION 5.07   ANNUAL OFFICERS’ CERTIFICATE TO TRUSTEE.  The Company will deliver to the Trustee on or prior to April 30
in each year an Officers’ Certificate, complying with Section 314(a)(4) of the
Trust Indenture Act, from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company’s compliance with all conditions and covenants under this
Indenture.  For the purposes of such
certificate, such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.

SECTION 5.08   REPORTS TO BE FURNISHED TO TRUSTEE AND
HOLDERS.  For so long as any of the Notes are outstanding, the Company will
deliver to the Trustee and the Holders:

(1)   within
45 Business Days of the close of its fiscal year, or such later time as is then
permitted under Mexican law, an English translation of the unaudited
consolidated financial statements of the Company, together with information
sufficient to ascertain the financial condition and results of operations of
the Company and its Restricted Subsidiaries on a consolidated basis, accounting
for Grupo TFM and its consolidated subsidiaries under the equity method of
accounting;

(2)   within
120 days of the close of its fiscal year, or such later time as is then
permitted under Mexican law, an English translation of the audited consolidated
financial statements of the Company, together with information sufficient to ascertain
the financial condition and results of operations of the Company and its
Restricted Subsidiaries on a consolidated basis, accounting for Grupo TFM and
its consolidated subsidiaries under the equity method of accounting;

(3)   within
180 days of the close of its fiscal year, an English translation of the audited
consolidated financial statements of the Company, together with a
reconciliation (in the

 

67

 

form required by the Commission) to U.S. generally accepted accounting
principles, together with information sufficient to ascertain the financial
condition and results of operations of the Company and its Restricted
Subsidiaries, accounting for Grupo TFM and its consolidated subsidiaries under
the equity method of accounting;

(4)   within
30 Business Days of the close of the relevant quarter, an English translation
of the unaudited quarterly consolidated financial statements of the Company,
for each of the first three fiscal quarters, together with information
sufficient to ascertain the financial condition and results of operations of
the Company and its Restricted Subsidiaries, accounting for Grupo TFM and its
consolidated subsidiaries under the equity method of accounting;

(5)   simultaneously
with the delivery of each set of consolidated financial statements referred to
in clauses (2), (3) and (4) above, an Officers’ Certificate stating whether any
Event of Default exists on the date of such certificate and, if any Event of
Default then exists, setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;

(6)   without
duplication, copies of such other reports or notices as may be filed or
required to be filed by the Company with the CNBV or the Commission; and

(7)   promptly
upon any officer of the Company becoming aware of the existence of an Event of
Default, an Officers’ Certificate setting forth the details thereof and the
action which the Company is taking or proposes to take with respect thereto.

The
Company will transmit or cause to be transmitted to the Holders, as soon as
practicable after the mailing of such material to its stockholders, English
translations of copies of all quarterly and annual financial reports
distributed to its stockholders generally. 
Reports pursuant to this Section shall be transmitted by mail to all
Holders of Notes, as the names and addresses of such Holders appear upon the
Note Register, or shall otherwise be made available to the Holders in
electronic form. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on Officers’ Certificates).

SECTION 5.09   FURTHER
ASSURANCES.  From time to time whenever reasonably demanded by the Trustee,
the Company and the Guarantors will make, execute and deliver or cause to be
made, executed and delivered any and all such further and other instruments and
assurances as may be reasonably necessary or proper to carry out the intention
or facilitate the performance of the terms of this Indenture and the Collateral
Documents.

SECTION 5.10   COMPANY TO FURNISH TRUSTEE INFORMATION
AS TO NAMES AND ADDRESSES OF HOLDERS.  The Company shall furnish or cause to be furnished to the Trustee
(a) not more than 15 days before each Regular Record Date, but in any event not
less frequently than semiannually or quarterly if the Company has exercised the
Extension Election, a list in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the Company or
any of its Paying Agents other than

 

68

 

the Trustee, as to the names and addresses of the Holders of Notes to
which such Regular Record Date applies as of such Regular Record Date, and (b)
at such other times as the Trustee may request in writing, within five days
after receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Note Registrar.

SECTION 5.11   WAIVER
OF STAY, EXTENSION OR USURY LAWS.  The Company
and the Guarantors covenant (to the extent that they may lawfully do so) that
they will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company or any
Guarantors from paying all or any portion of the principal of, premium, if any,
or interest and Additional Amounts, if any, on the Notes or the Guarantees as
contemplated herein, wherever enacted now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture or the
Guarantees; and (to the extent that it may lawfully do so) the Company and each
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

SECTION
5.12   LIMITATION ON
RESTRICTED PAYMENTS. The Company shall not, and shall cause its
Restricted Subsidiaries not to, directly or indirectly, (i) declare or pay any
dividend on, or make any distribution to the holders of, any Capital Stock of
the Company, other than (x) dividends or distributions payable in Capital
Stock of the Company (other than Disqualified Stock) or (y) pro rata
dividends or distributions on Capital Stock (other than Disqualified Stock) of
its Restricted Subsidiaries; (ii) repay, redeem or otherwise acquire or retire
for value (other than through the issuance of Capital Stock of the Company
(excluding Disqualified Stock)) any Capital Stock of the Company or any of its
Restricted Subsidiaries, other than any such repayment, redemption, acquisition
or retirement of such Capital Stock held by (x) the Company or its Restricted
Subsidiaries or (y) in the case of Capital Stock of a Restricted
Subsidiary of the Company, any Person that is not an Affiliate (other than
another Restricted Subsidiary) of the Company; (iii) prepay, repay, redeem,
defease or otherwise acquire or retire for value (other than through the
issuance of Capital Stock of the Company (excluding Disqualified Stock)), prior
to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company or any of its Restricted Subsidiaries
that ranks junior in right of payment to the Notes or the Guarantees, as
applicable, except as permitted pursuant to Section 5.14(b)(vii); or (iv) make
any Investment in any Affiliate of the Company other than (A) an Investment by
the Company or any of its Restricted Subsidiaries in the Company or any such
Restricted Subsidiaries or in TFM, or in any Subsidiary in connection with a
Qualifying PEMEX Securitization Transaction, or (B) an Investment by the
Company or any Restricted Subsidiary consisting of non-cash consideration
received in connection with a Qualifying Disposition (the foregoing actions set
forth in clauses (i) through (iv), being referred to hereinafter as “Restricted Payments”) if at the time
of any such Restricted Payment, and after giving effect thereto on a pro forma
basis, (1) a Default or an Event of Default shall have occurred and be
continuing, (2) on a pro forma basis, the Consolidated Debt Service Coverage
Ratio for the Company for the four fiscal quarters immediately preceding such incurrence
for which quarterly financial statements are available in accordance with
Section 5.08, taken as one

 

69

 

period,
is greater than 2.0 to 1.0, or (3) the aggregate amount of all Restricted
Payments declared or made after the Initial Issuance Date including such
Restricted Payment (the value of any such payment, if other than cash, shall be
the value determined in good faith by the Board of Directors and evidenced by a
Board Resolution) shall exceed the sum of:

(A)          50% of Consolidated
Net Income for the period (treated as one accounting period) commencing with
the first full fiscal quarter after the Initial Issuance Date and ending on the
last day of the last full fiscal quarter immediately preceding such Restricted
Payment for which quarterly or annual financial statements of the Company are
available (or if such Consolidated Net Income is a deficit, less 100% of such
deficit); provided, that Consolidated Net Income shall be adjusted to
exclude any amounts included in clause (C) that would increase Consolidated Net
Income; plus

(B)           100% of the
aggregate net cash proceeds received after the Initial Issuance  Date as a contribution to the common equity
capital of the Company or from the issue or sale of Capital Stock of the
Company (other than Disqualified Stock) or from the issue or sale of
Disqualified Stock or debt securities of the Company that have been converted
into such Capital Stock (other than Capital Stock or Disqualified Stock or
convertible debt securities sold to a Restricted Subsidiary of the Company)
after the Initial Issuance Date; plus

(C)           an amount equal to
the net reduction in Investments made pursuant to Section 5.20(ii) resulting
from dividends, repayments of loans or advances, or other transfers of assets,
in each case to the Company or any Restricted Subsidiary, not to exceed the
amount of such Investments previously made after the Initial Issuance Date by
the Company and its Restricted Subsidiaries in such Person.

(b)           The provisions of
this Section 5.12 will not prevent (i) the payment of any dividend within 60
days after the date of its declaration if the dividend would have been
permitted on the date of declaration, (ii) the purchase, redemption,
acquisition or retirement of any shares of Capital Stock of the Company solely
out of the proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of shares of Capital Stock (other than
Disqualified Stock), (iii) purchases by the Company of shares of its Capital
Stock pursuant to the terms of the Company’s share repurchase program as in
effect on the Initial Issuance Date or (iv) purchases, reductions or other
retirements of the Company’s Note Linked Securities outstanding on the Initial
Issuance Date. For purposes of calculating the aggregate amount of Restricted
Payments made pursuant to clause (3) of the first paragraph of Section 5.12(a),
payments made under clauses (i), (ii) and (iv) of this Section 5.12(b) shall be
included in such amount and payments made under clause (iii) of this Section
5.12(b) shall be excluded, provided,
that dividends paid within 60 days of the date of declaration shall be deemed
to be paid at the date of declaration.

(c)           Prior to making any
Restricted Payment under this Section 5.12 (other than a permitted Restricted
Payment described in Section 5.12(b)(iii)), the Company shall deliver to the
Trustee an Officers’ Certificate setting forth the computation by which the
amount available for Restricted Payments was determined.  The Trustee shall have no duty or
responsibility to determine the accuracy or correctness of this computation and
shall be fully protected in relying on such Officers’ Certificate.

 

70

 

(d)           Any payment made by
the Company in lieu of or on account of any fractional ADS that would otherwise
be issuable if the Company elects to pay a portion of interest on the Notes in
ADSs shall not constitute a Restricted Payment.

SECTION 5.13   LIMITATION ON TRANSACTIONS WITH
AFFILIATES.

(a)           The Company shall not, and shall not
permit any Restricted Subsidiary of the Company to, directly or indirectly,
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase or lease any property or assets from, or enter into any
contract, agreement, understanding, loan, advance or guarantee with, or make
any loan, advance or capital contribution to, or for the benefit of, an
Affiliate of the Company, or any direct or indirect holder of 10% or more of the
shares of Capital Stock of the Company outstanding or any Associate, or with an
Affiliate of any such holder or Associate, including Promotora Servia (an “Affiliate Transaction”).  Notwithstanding the foregoing, Affiliate
Transactions shall not include (i) the payment of reasonable and customary fees
to directors or executive officers of the Company or any Restricted Subsidiary
of the Company for current and future periods; (ii) any transaction between or
among the Company and any of its Restricted Subsidiaries in the ordinary course
of business and consistent with past practices of the Company and its
Restricted Subsidiaries; or (iii) transactions made as part of, or directly
relating to, a Qualifying PEMEX Securitization Transaction.

(b)           Except for the Existing Servia
Payable, which will be settled on the Initial Issuance Date through the
issuance to Promotora Servia of Notes with a principal amount equal to the
outstanding amount of the Existing Servia Payable, all Indebtedness, notes,
claims and payments owed to Promotora Servia or its Affiliates or Associates,
and any and all consulting fees and other payments and compensation (other than
reasonable and customary compensation as employees or directors for current and
future periods) payable to Promotora Servia or its Affiliates or Associates,
shall be subordinated in right of payment to the Notes and no payment shall be
made to Promotora Servia or its Affiliates or Associates by the Company or any
of its Restricted Subsidiaries in respect of any such amounts until the
Outstanding Notes have been paid in full or such payment has been provided for
in full.

SECTION
5.14   LIMITATION ON INDEBTEDNESS.

(a)           The Company shall
not, and shall not permit any Restricted Subsidiary of the Company to, directly
or indirectly, create, incur, issue, suffer to exist, assume, guarantee or
otherwise become directly or indirectly liable with respect to, any
Indebtedness (collectively, an “Incurrence”),
other than Indebtedness permitted to be incurred pursuant to Section 5.14(b).

(b)           Indebtedness may be
incurred as follows:

(i)            Indebtedness of the Company and its Restricted
Subsidiaries existing on the Initial Issuance Date as set forth on Schedule
5.14(b)(i) hereto;

(ii)           Indebtedness of the Company evidenced by the Notes and
this Indenture and Indebtedness of the Guarantors evidenced by the Guarantees;

 

71

 

(iii)          Indebtedness of the Company or a Restricted Subsidiary
owing to a Restricted Subsidiary or the Company, provided, that either (x) any such Indebtedness owing by the
Company to a Restricted Subsidiary shall be expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Notes or (y) any
such Indebtedness owing by a Restricted Subsidiary to the Company or another
Restricted Subsidiary shall be repayable solely out of dividends or
distributions made or declared by such Restricted Subsidiary to the Company or
another Restricted Subsidiary and in either such case (A) any subsequent
issuance or transfer of Capital Stock that results in any such Indebtedness
being held by a Person other than the Company or a Restricted Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that
is not either the Company or a Restricted Subsidiary thereof shall be deemed,
in each case, to constitute an Incurrence of such Indebtedness by the Company
or such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (iii);

(iv)          Acquired Indebtedness of any Person acquired by the Company
or any Restricted Subsidiary, provided,
that such Indebtedness is non-recourse to any assets of the Company or any
other Restricted Subsidiary (other than the assets so acquired), and is not
guaranteed by the Company or any other Restricted Subsidiary;

(v)           Guarantees by the Company or a Restricted Subsidiary of
the Company of Indebtedness otherwise permitted to be Incurred pursuant to any
other clause of this Section 5.14;

(vi)          Indebtedness of the Company or a Restricted Subsidiary of
the Company in respect of letters of credit for the benefit of trade vendors
issued in the ordinary course of business in an aggregate amount not exceeding
$20 million at any one time outstanding;

(vii)         Indebtedness issued in exchange for, or the proceeds of
which are used to repay or refund or refinance or discharge or otherwise retire
for value (“Refinance”), Indebtedness of the Company or any of its
Restricted Subsidiaries permitted under clauses (i), (ii), (iv), (vii) and (ix)
of this paragraph (b) (“Refinancing
Indebtedness”) in a principal amount (or if such Refinancing
Indebtedness provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, with an original
issue amount), not to exceed the principal amount of the Indebtedness so
Refinanced (or, if the Indebtedness being Refinanced was issued with original
issue discount, the original issue amount) plus customary fees, expenses and
costs related to the Incurrence of such Refinancing Indebtedness; provided, that (A) Refinancing
Indebtedness of any Restricted Subsidiary of the Company shall not be used to
Refinance outstanding Indebtedness of the Company or any other Restricted
Subsidiaries; (B) if such Refinancing Indebtedness is being used to Refinance
or discharge or otherwise retire the Notes, such Refinancing Indebtedness shall
either (I) be Qualifying Subordinated Indebtedness or (II) have aggregate
annual

 

72

 

cash interest payments not in excess of the
lesser of (a) the sum of (1) 2% of the principal amount of such Refinancing
Indebtedness plus (2) the annual cash interest requirements on all Notes
retired by the Company prior to the issuance date of such Refinancing
Indebtedness through the application of VAT Cash Proceeds pursuant to Section
5.18 (less any cash interest requirements in excess of 2% per annum on
Refinancing Indebtedness previously issued pursuant to this provision) and (b)
8% per annum of the principal amount of such Refinancing Indebtedness; (C) if
such Refinancing Indebtedness is being used to Refinance Indebtedness other
than the Notes, the scheduled mandatory cash interest and principal payments
during the remaining term of the Notes on such Refinancing Indebtedness has a
present value (per $1,000 principal amount of such Refinancing Indebtedness and
based on the Agreed  Discount Rate) at
the date of issuance that is equal to or less than the present value (per
$1,000 principal amount of such Indebtedness being Refinanced and based on the
Agreed Discount Rate) at such date of the scheduled mandatory cash interest and
principal payments during the remaining term of the Notes on the Indebtedness
being Refinanced, provided, further,
that any Refinancing Indebtedness that is Incurred to Refinance Indebtedness
Incurred under Section 5.14(b)(ix) shall be subject to the limitations set
forth in such Section; and (D) with respect to any Refinancing Indebtedness
which Refinances Indebtedness which ranks junior in right of payment to the
Notes, (x) such Refinancing Indebtedness is subordinated in right of payment at
least to the same extent as the Indebtedness to be Refinanced if such
Indebtedness had remained outstanding and (y) the Refinancing Indebtedness has
an Average Life and a Stated Maturity which is equal to or greater than the
Indebtedness to be Refinanced at the time of such Incurrence, provided, further
that, for the purpose of determining the amount of Indebtedness that has been
Incurred pursuant to any of foregoing enumerated clauses, there shall be
included in each such clause the principal amount then outstanding of any
Indebtedness originally Incurred pursuant to such clause and thereafter
Refinanced pursuant to this clause (vii) and any subsequent Refinancings thereof;

(viii)        Indebtedness of the Company or any of
its Restricted Subsidiaries under Currency Agreements and Interest Rate
Agreements; provided that the
obligations under such agreements are related to payment obligations incurred
in compliance with this Indenture and that such agreements (a) are designed
solely to protect the Company or its Restricted Subsidiaries against
fluctuations in foreign currency exchange rates or interest rates and (b) do
not increase the Indebtedness of the obligor outstanding at any time other than
as a result of fluctuations in foreign currency exchange rates or interest
rates or by reason of fees, indemnities and compensation payable thereunder;

(ix)           Indebtedness of the Company or any of its Restricted
Subsidiaries in an aggregate principal amount at any time outstanding up to the
sum of (1) $76,300,000 less (2) the principal amount of all certificates
outstanding under the Receivables Securitization Facility which Indebtedness
Incurred pursuant to this clause (ix) is (a) Incurred under the
Receivables Securitization Facility; or (b) Incurred other than under the
Receivables Securitization Facility and is

 

73

 

unsecured; or (c) Incurred other than under
the Receivables Securitization Facility and (A) has a Stated Maturity
which is not earlier than the Stated Maturity of the Receivables Securitization
Facility, (B) has scheduled mandatory cash payments of principal and interest
during the remaining term of the Notes (as such may be extended pursuant to
Section 3.01(b)) that, at the date of issuance, has a present value (per $1,000
principal amount and computed based on the Agreed Discount Rate) which is less
than or equal to the present value (per $1,000 face amount and computed based on
the Agreed Discount Rate) at such date of the scheduled mandatory cash payments
of principal and interest during the remaining term of the Notes (as such may
be extended pursuant to Section 3.01(b)) on the certificates issued under the
Receivables Securitization Facility and (C) is secured on terms no more
favorable to the holders of such Indebtedness than to the holders of the
certificates under the Receivables Securitization Facility; provided, that any amounts Incurred
pursuant to this clause (ix) shall (I) not be used to redeem, repay,
repurchase or otherwise retire any Indebtedness which is subordinated in right
of payment to the Notes and (II) be applied in compliance with the provisions
of this Indenture; and

x)             Indebtedness, to the extent the net proceeds thereof are
promptly applied to defease any of the Notes as described below under Section
12.01 and to pay fees, expenses, premiums and other payment obligations under
this Indenture related to such defeasance.

Accrual
of interest, accretion or amortization of original issue discount, payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock will not be deemed to
be an Incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 5.14.

(c)           The Company shall
not, directly or indirectly, Incur any Indebtedness of the Company (other than
Indebtedness of the Company which is convertible into Capital Stock (other than
Disqualified Stock) of the Company) which (i) is subordinate or junior in right
of payment of principal, premium, if any, or interest and Additional Amounts,
if any, on the Notes and (ii) requires any principal payment, redemption
payment or sinking fund payment thereon, or purchase thereof, in whole or in
part, to be made prior to the final Stated Maturity of the Notes; provided that (i) this Section 5.14(c)
shall not prohibit the Incurrence of Indebtedness owing by the Company to any
Restricted Subsidiary and (ii) nothing contained in this Section 5.14(c) shall
permit any Incurrence of Indebtedness that is not otherwise permitted by
Section 5.14(b).

SECTION 5.15    LIMITATION ON
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.  The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of such Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in,
or measured by, its profits, owned by, or pay any Indebtedness owed to, the
Company or its Restricted Subsidiaries, (b) make loans or advances to the
Company or its Restricted Subsidiaries, (c) transfer any of its properties or

 

74

 

assets to the Company or its Restricted Subsidiaries or (d) guarantee
any Indebtedness of the Company or its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of: (i) applicable
law; (ii) any instrument governing Acquired Indebtedness permitted to be
incurred under Section 5.14(b)(iv), which encumbrances or restrictions are not
applicable to any Person or the properties or assets of any Person, other than
the Person so acquired, or the property or assets of the Person so acquired or
its consolidated Subsidiaries; (iii) any restrictions existing under agreements
in effect on the date of this Indenture as set forth on Schedule 5.15
hereto; (iv) any restrictions with respect to a Restricted Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (which sale or disposition is otherwise permitted by the
terms of this Indenture); (v) any agreement governing Indebtedness restricting
the sale or other disposition of property securing such Indebtedness if such
agreement does not expressly restrict the ability of a Restricted Subsidiary to
pay dividends or to make distributions, loans or advances; (vi) customary
restrictions in leases relating to property covered thereby; or (vii) this
Indenture.

SECTION 5.16   CHANGE
OF CONTROL.  If (i) any person or group within the meaning of Section 13(d)(3)
of the Exchange Act (a “Group”)
together with any Affiliates and Associates of any thereof, other than (A) the
Serrano Segovia family, its Affiliates and Associates, and (B) the CPO Trustee
and any successor to the CPO Trustee, shall beneficially own (within the
meaning of Rule 13d-3 under the Exchange Act) at least 35% of the total voting
power of all classes of capital stock of the Company entitled to vote generally
in the election of directors of the Company; provided,
that, in the event 100% of the total voting power of all classes of the
Company’s Capital Stock entitled to vote generally in the election of directors
of the Company is held by any other Person, a Change of Control shall be
determined with respect to the Company as if the Company was such other Person;
or (ii) the Company is liquidated or dissolved or the stockholders of the
Company adopt a plan for the liquidation or dissolution of the Company (each, a
“Change of Control”), then
the Company shall make an offer (an “Offer”)
to purchase all of the Notes then outstanding on a date not less than 30 nor
more than 60 days after a Change of Control (the “Repurchase Date”) at a Repurchase Price equal to (i)
100% of their principal amount plus accrued and unpaid interest and Additional
Amounts, if any, to the Repurchase Date, until such time as the Company shall
have previously repaid, redeemed or otherwise retired $150,000,000 in aggregate
principal amount of the Notes, and thereafter (ii) 101% of the principal amount
of the Notes plus accrued and unpaid interest and Additional Amounts, if any,
to the Repurchase Date (subject to the provisions of  Section 4.02(b)).

(a)           The Company shall
provide the Trustee with notice of an Offer and with all information required
to accompany such notice, not more than ten days after the Change of Control.

(b)           Notice of an Offer
shall be mailed by the Trustee (at the Company’s expense) not more than ten
Business Days after receipt by the Trustee of the notice in accordance with
5.16(a) to all Holders of the Notes at their last registered addresses
appearing in the Note Register.  The Offer
shall remain open from the time of the mailing until the Repurchase Date.  The notice shall be accompanied by the most
recently filed annual report (including audited consolidated financial
statements) of the Company and the most recent subsequently filed quarterly
report of the Company (or in the event the Company is not required to prepare
any of

 

75

 

the
foregoing reports, the comparable information required pursuant to Section
5.08).  The Company shall provide the
Trustee with copies of all materials to be delivered with such notice.  The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Offer.  The notice shall state:

(1)   that
the Offer is being made pursuant to this Section 5.16, the reason for the Offer
and that all Notes properly tendered pursuant to the Offer will be accepted for
payment;

(2)   the
material circumstances and relevant material facts regarding such Change of
Control;

(3)   the
Repurchase Price and the Repurchase Date;

(4)   the
name and address of the Paying Agent and the Trustee and that Notes must be
surrendered to the Paying Agent to collect the Repurchase Price;

(5)   that
any Note not tendered or accepted for payment will continue to accrue interest;

(6)   that
any Note accepted for payment pursuant to the Offer shall cease to accrue
interest after the Repurchase Date;

(7)   that
each Holder electing to have a Note purchased pursuant to an Offer will be
required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Repurchase Date;

(8)   that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the Business Day immediately
preceding the Repurchase Date, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Notes the Holder delivered for
purchase, the certificate number of Notes the Holder delivered and a statement
that such Holder is withdrawing its election to have such Notes purchased;

(9)   that
Holders will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered if such Holders only desire part of such Notes
to be purchased; and

(10) any
other information required by applicable law, rules and regulations.

To
the extent that any of the procedures relating to the making and accepting of
an Offer conflict with the provisions of the Exchange Act, other applicable
federal or state law, or the regulations which may be promulgated thereunder,
such provisions of the Exchange Act, other applicable federal or state law, or
the regulations which may be promulgated thereunder shall govern such Offer in
lieu of, and only to the extent of, such conflicting procedures.

(c)           On the Repurchase
Date, the Company shall (i) accept for payment Notes or portions thereof
properly tendered pursuant to the Offer, (ii) deposit with the Paying Agent

 

76

 

money
sufficient to pay the Repurchase Price of all Notes or portions thereof so
accepted, and to pay the expenses of the Paying Agent to promptly mail or
deliver such payments in accordance with the following sentence, and (iii)
deliver to the Trustee Notes so accepted together with an Officers’ Certificate
stating the Notes or portions thereof accepted for payment by the Company. The
Paying Agent shall promptly mail or deliver to Holders of Notes so accepted
payment in an amount equal to the Repurchase Price, and the Company shall
execute and the Trustee shall promptly authenticate and mail or deliver to such
Holders a new Note equal in principal amount to any unpurchased portion of the
Note properly tendered if such Holders only desire portions of their Notes to
be purchased.  The Company will publicly
announce the results of the Offer on or as soon as practicable after the
Repurchase Date.  For purposes of this
Section 5.16, the Trustee shall act as the Paying Agent.

SECTION 5.17   LIMITATION
ON LIENS.  The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of
its property or assets (including assets acquired after the Initial Issuance
Date and Capital Stock of any Restricted Subsidiary of the Company), except for
(i) Liens under the Collateral Documents securing the Notes; (ii) Liens
outstanding on the Initial Issuance Date as set forth on Schedule 5.17
hereto; (iii) Liens for taxes not yet delinquent or which are being contested
in good faith by appropriate proceedings; provided,
that adequate reserves with respect thereto are maintained on the books of the
Company or its Restricted Subsidiaries, as the case may be, in conformity with
IAS; (iv) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen, repairmen or other like Liens arising in the ordinary
course of business and not discharged for a period of not more than 90 days after
notice thereof or which are being contested in good faith by appropriate
proceedings; (v) pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation; (vi) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Company or such
Restricted Subsidiary; (vii) any attachment or judgment Lien not constituting
any Event of Default under clause (9) of Section 6.01; (viii) Liens securing
any Indebtedness permitted to be incurred pursuant to
Section 5.14(b)(vii)(C), 5.14(b)(iv) (provided such Lien shall encumber
only the property so acquired), 5.14(b)(ix) or 5.14(b)(x); (ix) any
interest or title of a lessor pursuant to a lease constituting a Capitalized
Lease Obligation; (x) Liens on any assets acquired by the Company or any
of its Restricted Subsidiaries after the Initial Issuance Date, which Liens
were in existence on or prior to the acquisition of such assets (to the extent
that such Liens were not created in contemplation of such acquisition), provided, that such Liens are limited to
the asset so acquired and the proceeds thereof; (xi) Liens securing
Indebtedness owed to the Company by any of its Restricted Subsidiaries; (xii)
restrictions on the disposition or pledge of securities imposed by applicable
law or by contract with respect to securities received in connection with any
Qualifying Disposition or interests arising in connection with any joint
venture agreement; provided, that (1) any restrictions
with respect to securities received in connection with any Qualifying
Disposition (A) shall comply with the provisions of clause (2) under the
definition of Qualifying Disposition and (B) shall not restrict the pledge of
such

 

77

 

securities as required pursuant to Section 5.18 other than to require
any pledgee or subsequent transferee to be bound by such restrictions and (2)
any restrictions with respect to any joint venture agreement entered into after
the Initial Issuance Date shall not restrict the pledge of such interests as
required pursuant to the Collateral Documents; and (xiii) any renewal of or
substitution for any Lien permitted by any of the preceding clauses, provided
that the Indebtedness secured is not increased nor the Lien extended to any
additional assets. This Section 5.17 does not authorize the incurrence of any
Indebtedness not otherwise permitted by Section 5.14.

SECTION
5.18   RESTRICTION ON
ASSET DISPOSITIONS AND QUALIFYING DISPOSITIONS; APPLICATION OF VAT PROCEEDS.

(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, make (1) any
Asset Disposition unless (i) the consideration received from such Asset
Disposition is equal to or greater than the fair market value of the assets or
stock sold (as determined in good faith by the Board of Directors and evidenced
by a Board Resolution) and (ii) at least 80% of the consideration received from
such Asset Disposition is in the form of cash; provided,
that the amount of (x) any liabilities (as shown on the Company’s or such
Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of
the Company or such Restricted Subsidiary which are assumed by the transferee
of such assets, including any Indebtedness of a Restricted Subsidiary whose
stock is purchased by the transferee, and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) shall be deemed to be
cash for purposes of this Section 5.18(a), or (2) any GTFM Disposition unless
such transaction is a Qualifying Disposition.

(b)           The Company shall
apply, or cause its Restricted Subsidiaries to apply, any Net Cash Proceeds
from any Asset Disposition or Qualifying Disposition and any VAT Cash Proceeds
to (x) redeem Notes pursuant to Section 4.01 on a date not less than 30 nor
more than 60 days after the receipt by the Company or any of its Restricted
Subsidiaries of such Net Cash Proceeds or VAT Cash Proceeds or (y) repurchase
Notes pursuant to Section 5.18(d); provided,  that, such Net Cash
Proceeds and VAT Cash Proceeds may be applied, if required by the terms of the
Receivables Securitization Facility, to retire or reduce outstanding
obligations under the Receivables Securitization Facility.  To the extent that the Company reborrows any
amounts under the Receivables Securitization Facility which had been previously
repaid with any Net Cash Proceeds from any Asset Disposition or Qualifying
Disposition or any VAT Cash Proceeds, such action shall be deemed an Asset
Disposition for purposes of this Indenture and any proceeds received therefrom
shall be deemed Net Cash Proceeds of an Asset Disposition for purposes of this
Section 5.18.  Until such time as the
Net Cash Proceeds from any Asset Disposition or Qualifying Disposition or VAT
Cash Proceeds are applied in accordance with this Section 5.18(b) or Section
5.18(d), such proceeds shall be deposited in a collateral account subject to a
first priority security interest to secure the Notes pursuant to the Collateral
Documents and shall be invested in Cash Equivalents.

(c)           The Company shall
pledge, or cause its Restricted Subsidiaries to pledge, any non-cash proceeds
of any Asset Disposition or Qualifying Disposition and any non-cash VAT
Proceeds received by the Company or any of its Restricted Subsidiaries to
secure the Notes pursuant to the terms of the Collateral Documents.

 

78

 

(d)           In the event that
the Company or any Restricted Subsidiary has Net Cash Proceeds from an Asset
Disposition or a Qualifying Disposition or has VAT Cash Proceeds that have not
been applied as set forth in Section 5.18(b) (in any such case, “Excess Proceeds”), then the Company
shall make an offer (an “Excess Proceeds
Offer”) to purchase on a date not less than 30 nor more than 60
days after the receipt by the Company or any of its Restricted Subsidiaries of
such Excess Proceeds (the “Proceeds Offer
Repurchase Date”) an amount of Notes (together with accrued and
unpaid interest and Additional Amounts, if any, on such Notes, to the Proceeds
Offer Repurchase Date) equal to the amount of such Excess Proceeds, at a
Repurchase Price equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest and Additional Amounts, if any, to the Proceeds
Offer Repurchase Date.  To the extent
that the Excess Proceeds are insufficient to repurchase all of the outstanding
Notes properly tendered on the Proceeds Offer Repurchase Date, the Company
shall purchase Notes tendered pursuant to the Excess Proceeds Offer on a pro
rata basis.

(i)            The
Company shall provide the Trustee with notice of an Excess Proceeds Offer and
with all information required to accompany such notice, not more than ten days
after the determination that the Company or any Restricted Subsidiary has
Excess Proceeds.

(ii)           Notice
of an Excess Proceeds Offer shall be mailed by the Trustee (at the Company’s
expense) not more than ten Business Days after receipt by the Trustee of the
notice in accordance with Section 5.18(d)(i) to all Holders of the Notes at
their last registered addresses appearing in the Notes Register.  The Excess Proceeds Offer shall remain open
from the time of the mailing until the Proceeds Offer Repurchase Date.  The notice shall be accompanied by the most
recently filed annual report (including audited consolidated financial
statements) of the Company and the most recent subsequently filed quarterly
report of the Company (or in the event the Company is not required to prepare
any of the foregoing reports, the comparable information required pursuant to
Section 5.08).  The Company shall
provide the Trustee with copies of all materials to be delivered with such
notice.  The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Excess Proceeds Offer. 
The notice shall state:

(1)           that
the Excess Proceeds Offer is being made pursuant to this Section 5.18, the
reason for the Excess Proceeds Offer, and that all Notes properly tendered
pursuant to the Excess Proceeds Offer will be accepted for payment, subject to
proration, if applicable;

(2)           the
amount of the Excess Proceeds, the Repurchase Price and the Proceeds Offer
Repurchase Date;

(3)           the
name and address of the Paying Agent and the Trustee and that Notes must be
surrendered to the Paying Agent to collect the Repurchase Price;

(4)           that
any Note not tendered or accepted for payment will continue to accrue interest;

 

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(5)           that
any Note accepted for payment pursuant to the Excess Proceeds Offer shall cease
to accrue interest after the Proceeds Offer Repurchase Date;

(6)           that
each Holder electing to have a Note purchased pursuant to an Excess Proceeds
Offer will be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the Proceeds Offer Repurchase Date;

(7)           that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the Business Day immediately
preceding the Proceeds Offer Repurchase Date, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes the Holder
delivered for purchase, the certificate number of Notes the Holder delivered
and a statement that such Holder is withdrawing its election to have such Notes
purchased;

(8)           that
if Notes in a principal amount in excess of the amount of Excess Proceeds are
surrendered pursuant to the Excess Proceeds Offer, the Company shall purchase
Notes on a pro rata basis;

(9)           that
Holders whose Notes are purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered; and

(10)         any
other information required by applicable law, rules and regulations.

To
the extent that any of the procedures relating to the making and accepting of
an Excess Proceeds Offer conflict with the provisions of the Exchange Act,
other applicable federal or state law, or the regulations which may be
promulgated thereunder, such provisions of the Exchange Act, other applicable
federal or state law, or the regulations which may be promulgated thereunder
shall govern such Excess Proceeds Offer in lieu of, and only to the extent of,
such conflicting procedures.

On
the Proceeds Offer Repurchase Date, the Company shall (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Excess Proceeds
Offer, (ii) deposit with the Paying Agent money sufficient to pay the
Repurchase Price of all Notes or portions thereof so accepted, and to pay the
expense of the Paying Agent to promptly mail or deliver such payments in
accordance with the following sentence, and (iii) deliver to the Trustee Notes
so accepted together with an Officers’ Certificate stating the Notes or portions
thereof accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to Holders of Notes so accepted payment in an amount equal to
the Repurchase Price, and the Company shall execute and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered if such
Holders only desire portions of their Notes to be purchased.  The Company

 

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will publicly announce the results of the Excess Proceeds Offer on or
as soon as practicable after the Proceeds Offer Repurchase Date.  For purposes of this Section 5.18, the
Trustee shall act as the Paying Agent.

(e)           Subject to the provisions of this
Section 5.18(e) and Sections 5.18(b) and (c), the Company and its Restricted
Subsidiaries shall be permitted to exchange shares of Capital Stock (whether
outstanding shares or newly issued shares of Capital Stock (other than
Disqualified Stock)) of TMM Multimodal for outstanding Notes (an “Exchange Transaction”); provided,
that (A) after giving effect to such Exchange Transaction, the Company and its
Restricted Subsidiaries control, directly or indirectly, more than 50% of the
Capital Stock of TMM Multimodal which under ordinary circumstances (not
dependent upon the happening of a contingency) has voting power to elect a
majority of the board of directors of TMM Multimodal; (B) (i) such Exchange
Transaction is effected pursuant to an exchange offer made to all Holders of
the Notes and the Company receives,
at the time of the commencement of the exchange offer to effect such Exchange
Transaction, an opinion from a Designated
Investment Bank to the effect that the consideration to be received in
connection with such Exchange Transaction is fair, from a financial point of
view, to the Company and its Restricted Subsidiaries; or (ii) the
Company receives, at the time of the commencement of the exchange offer to
effect such Exchange Transaction, an opinion from any of Chanin & Co.,
Houlihan Lokey Howard & Zukin Capital or The Blackstone Group, or their
respective successors, to the effect that the Exchange Transaction is fair,
from a financial point of view, to the non-exchanging Holders of Notes; or (iii)
(1) the consideration to be paid to the Company or its Restricted Subsidiaries
in connection with the Exchange Transaction consists of both cash and Notes,
(2) the cash consideration comprises at least two-thirds (2/3) of the total
consideration (based on the principal amount of the Notes exchanged in such
Exchange Transaction), (3) the aggregate principal amount of Notes exchanged in
all such Exchange Transactions does not exceed $50,000,000, (4) unless such
Exchange Transaction is effected pursuant to an exchange offer made to all
Holders of the Notes, no Holder participating in such Exchange Transaction
shall be an Affiliate or Associate of the Company and (5) the Company receives an opinion from a Designated Investment
Bank to the effect that the consideration to be received in connection with
such Exchange Transaction is fair, from a financial point of view, to the
Company and its Restricted Subsidiaries; and (C) for purposes of clause (B)(i)
and (B)(iii)(5) above, the opinion shall be required notwithstanding the amount
of the consideration for such transaction and fair market value shall be
determined on an enterprise value basis.

SECTION 5.19   LIMITATION ON SALE AND LEASEBACK
TRANSACTIONS.  The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any sale and leaseback transaction unless (i) the
Company or such Restricted Subsidiary could have incurred Indebtedness and
secured a Lien on Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the provisions of
Sections 5.14 and 5.17 or (ii) the proceeds of such sale and leaseback
transaction are at least equal to the fair value (as determined in good faith
by the Board of Directors and evidenced by a Board Resolution) of the property
and the Company or such Restricted Subsidiary applies or causes to be applied
an amount in cash equal to the net proceeds from such sale are applied (A) in
the same manner as Net Cash Proceeds pursuant to Section 5.18(b) or (d) or (B)
to purchase assets or business in the shipping, transportation and distribution
services industry, in each case within 180 days of the effective date of any
such sale.

 

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SECTION 5.20   LIMITATION ON INVESTMENTS.  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, make any Investment in any Person
except: (i) any Investment in any Cash Equivalent; (ii) any Investment that
constitutes a Restricted Payment pursuant to Section 5.12 (a)(iv) to the extent
permitted by Section 5.12(a)(iv); (iii) Investments in any Person engaged in
the same or a similar line of business as the Company and its consolidated
Subsidiaries or made for the purpose of maintaining, enhancing the productivity
of or expanding the capabilities of the Company and its consolidated
Subsidiaries in the worldwide transportation, shipping and distribution
services industry, (provided (x) the assets or securities acquired pursuant to
such Investments are pledged as additional Collateral pursuant to Article
Fifteen or (y) such Investments are made as part of, or directly related to, a
Qualifying PEMEX Securitization Transaction); (iv) Investments, not to exceed
$15 million at any one time outstanding, in the publicly traded equity
securities of any other companies (provided such Investments are pledged as
additional Collateral pursuant to Article Fifteen); (v) securities received as
consideration in connection with an Asset Disposition or a Qualifying
Disposition; (vi) Investments in Wholly Owned Subsidiaries; or (vii)
Investments existing on the Initial Issuance Date in any Restricted Subsidiary
or as set forth on Schedule 5.20.

SECTION 5.21   LIMITATION ON BUSINESS ACTIVITIES.  The Company shall not, and shall not permit
any of the Restricted Subsidiaries to, engage in any type of business other
than the businesses the Company and its consolidated Subsidiaries are engaged
in on the date of this Indenture, other business activities within the
worldwide transportation, shipping and distribution services industry, and
other business activities complementary, incidental or reasonably related
thereto.

SECTION 5.22   PAYMENTS
FOR CONSENT.  None of the Company, any of its consolidated Subsidiaries or any
of their respective Affiliates or Associates shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture, the
Notes, the Guarantees or the Collateral Documents, unless such consideration is
offered to be paid or agreed to be paid to all Holders of the Notes which so
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.

SECTION
5.23   ADDITIONAL GUARANTEES;
LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.

(a)           The Company shall
cause each of (i) TMM Multimodal, upon the exercise in full of the GM Put (or
the exercise in full by the Company or any Restricted Subsidiary of the related
call option) and the purchase by the Company or a Restricted Subsidiary of the
Capital Stock of TMM Multimodal pursuant to such exercise, (ii) any Restricted
Subsidiary that becomes a Wholly Owned Subsidiary after the Initial Issuance
Date (whether such Restricted Subsidiary became a Subsidiary or a Restricted
Subsidiary of the Company before or after the Initial Issuance Date), and (iii)
any Restricted Subsidiary that receives any assets upon a disposition of assets
by a Guarantor other than in connection with a Qualifying PEMEX Securitization
Transaction, within five Business Days thereafter, to execute and deliver a
supplemental indenture to this Indenture providing for a Guarantee of the
Company’s obligations

 

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under
the Notes, this Indenture and the Collateral Documents.  The Company shall cause any such new
Guarantor to pledge or cause to be pledged for the benefit of the Holders of
the Notes and to grant or cause to be granted to the Holders of the Notes a
first priority security interest in all of the assets and properties of such
Guarantor, and in furtherance thereof to enter into one or more Collateral
Documents (or supplements or amendments thereto) in the same manner specified
in Article Fifteen as if such Guarantor were a Guarantor on the Initial
Issuance Date; provided that such Guarantor is not restricted from granting
such pledge and security interest pursuant to any contractual arrangements with
third parties existing as of the Initial Issuance Date.

(b)           The Company will not
permit any Restricted Subsidiary, directly or indirectly, to Guarantee any
Indebtedness of the Company (“Guaranteed Indebtedness”) which is pari passu
with or subordinate in right of payment to the Notes, unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee of the Company’s
obligations under the Notes, this Indenture and the Collateral Documents by
such Restricted Subsidiary in the form provided herein in an amount at least
equal to the amount of Guaranteed Indebtedness that is Guaranteed by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit or advantage of any
rights or reimbursements, indemnity or subrogation or any other rights against
the Company or any other Restricted Subsidiary as a result of any payment by
such Restricted Subsidiary under its Guarantee; provided that this paragraph
shall not be applicable to (x) any Guarantee of any Restricted Subsidiary
that existed at the time such Person became a Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary, or (y) any Guarantee by one Restricted Subsidiary
of the Indebtedness of another Restricted Subsidiary if at the time such
Guarantee is provided the other Restricted Subsidiary could have incurred the
Guaranteed Indebtedness pursuant to Section 5.14(b).  If the Guaranteed Indebtedness is (A) pari passu with the
Notes, then the Guarantee of such Guaranteed Indebtedness shall be pari passu with,
or subordinated to, the Guarantee or (B) subordinated to the
Notes, then the Guarantee of such Guaranteed Indebtedness shall be subordinated
to the Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.

Notwithstanding
the foregoing, any Guarantee by a Restricted Subsidiary may provide that it
shall be automatically and unconditionally released and discharged upon
(i) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all the Company’s and each Restricted Subsidiary’s Capital Stock
in, or all or substantially all the assets of, such Restricted Subsidiary
(which sale, exchange or transfer is not prohibited by this Indenture) or
(ii) the release or discharge of the Guarantee which resulted in the
creation of such Guarantee, except a discharge or release by or as a result of
payment under such Guarantee.

SECTION 5.24   RESTRICTION ON INVESTMENT ACTIVITY.  The Company shall not, and shall not permit any Restricted
Subsidiary to, become an investment company required to register as an investment
company under the Investment Company Act of 1940, as amended, provided, however, that the Company or any
Restricted Subsidiary shall not be deemed to have violated this Section 5.24 so
long as the Company or such Restricted Subsidiary, as the case may be, shall
have obtained exemptive relief or shall otherwise have qualified for any
applicable exclusion from investment company status within one-hundred-and-

 

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eighty (180) days after the Company or such Restricted Subsidiary shall
have become such an investment company.

SECTION
5.25   RULE 144A INFORMATION.  Upon
request of a Holder of an Initial Private Note, the Company shall promptly
furnish to such Holder or to a prospective purchaser of such Note designated by
such Holder, as the case may be, the information required  to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act in order to permit compliance by such Holder with
Rule 144A in connection with the resale of such Note by such Holder.

SECTION 5.26   DELAY FEE.  If at any time any Delay Fee (as defined in
the Registration Rights Agreement) becomes payable by the Company pursuant to
the Registration Rights Agreement, the Company shall duly and promptly
(i) deliver to the Trustee an Officers’ Certificate to that effect and
stating (a) the amount of such Delay Fee that is payable and (b) the
date on which such Delay Fee is payable pursuant to the terms of the
Registration Rights Agreement and (ii) pay to each Holder such Delay Fee
in such amount and on such date as set forth in the Registration Rights
Agreement.  Unless and until the Trustee
receives such an Officers’ Certificate, the Trustee may assume without inquiry
that no Delay Fee is payable.

 

SECTION 5.27   Real Estate
Collateral.   The
Company shall, or shall cause the Guarantors (as applicable) to, make,
complete, execute and deliver within sixty (60) days of the Initial Issuance
Date all such filings required under Mexican law before the respective Public
Registries of Property of the locality in which each real estate property of
the Company or the Guarantors is situated in accordance with and as
contemplated by the Collateral Documents.

 

SECTION
5.28   CERTAIN AGREEMENTS
RELATING TO THE RECEIVABLES SECURITIZATION FACILITY.

                The Company and each of the Guarantors agree
that the amendments to the Receivables Securitization Facility to be
implemented pursuant to the Receivables Letter Agreement will permit (i) the
incurrence of the Indebtedness under the Notes and the Guarantees to be issued
under this Indenture without any breach of, or the occurrence of a “Rapid
Amortization Event” (as defined in the Receivables Securitization Facility)
under, the Receivables Securitization Facility and (ii) the security interests
and Liens on the Collateral set forth in the Collateral Documents.

 

ARTICLE SIX

REMEDIES

SECTION 6.01   EVENTS
OF DEFAULT.  “Event of Default,”
wherever used herein, means any one of the following events:

 

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(1)   default in the payment of any interest or Additional Amount upon
any Note when it becomes due and payable, and continuance of such default for a
period of five Business Days; or

(2)   default in the payment of the principal of (or premium, if any,
on) any Note when due or at its maturity; or

(3)   default in the observance or performance by the Company of its
obligations under Section 5.04, Section 5.08(7) or Article Eleven; or

(4)   default in the performance, or breach, of any other covenant or
warranty of the Company or the Guarantors in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 30 days after there has been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Notes a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

(5)   a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Restricted Subsidiary,
including the Receivables Securitization Facility, or under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced indebtedness for money borrowed, individually or in the
aggregate, in excess of $10,000,000, whether such indebtedness now exists or
shall hereafter be created, which default shall constitute a failure to pay any
portion of the principal of such indebtedness when due and payable or shall
have resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable; or

(6)   a default in the performance, or breach, of any covenant or
warranty under any of the Collateral Documents by the Company or any Restricted
Subsidiary (including any failure to pledge any assets acquired by the Company
or any Restricted Subsidiary as required pursuant hereto or thereto), after
giving effect to any notice and cure periods set forth herein or in such
Collateral Documents; or

(7)   the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable Federal,
state or foreign bankruptcy, insolvency, reorganization or other similar law,
including the Ley de Concursos Mercantiles (each, a “Bankruptcy Law”) or (B) a decree or
order adjudging the Company or any Restricted Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
suspension of payments, arrangement, adjustment or composition of or in respect
of the Company or any Restricted Subsidiary under any applicable law, or
appointing a custodian, receiver, liquidator, assignee, sindico, trustee, sequestrator or other
similar official of the Company or any Restricted Subsidiary or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the

 

85

 

continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
90 consecutive days; or

(8)   the commencement by the Company or any Restricted Subsidiary of a
voluntary case or proceeding under any applicable Bankruptcy Law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Restricted Subsidiary to the entry of a decree or
order for relief in respect of the Company or such Restricted Subsidiary in an
involuntary case or proceeding under any Bankruptcy Law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief under
any applicable Bankruptcy Law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, sindico,
trustee, sequestrator or similar official of the Company or such Restricted
Subsidiary or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due, or the taking
of corporate action by the Company or such Restricted Subsidiary in furtherance
of any such action; or

(9)   a final judgment or final judgments for the payment of money are
entered by a court of competent jurisdiction against the Company or any
Restricted Subsidiary and either (A) an enforcement proceeding shall have been
commenced by any creditor upon such judgment or (B) such judgment remains
unsettled, undischarged or unstayed for a period (during which execution shall
not be effectively stayed) of 60 consecutive days after such judgment becomes
final, and the aggregate amount of all such judgments exceeds $10,000,000; provided,
that the entry of any judgment as a result of (A) a default in the payment
of amounts due by the Company or any Restricted Subsidiary in connection with
the Put or due by the Company or any Restricted Subsidiary to KCS as a result
of payments rendered by KCS in connection with the Put or (B) litigation
or other proceedings in connection with the Put or any disputes with KCS
relating to or arising out of the KCS Transaction or other disputes with KCS
existing at the Initial Issuance Date relating to Grupo TFM or TFM shall not
constitute an Event of Default under this clause (9); provided, further,
that the issuance of an order (whether pre-judgment or after the entry of such
judgment) which order will, upon execution, result in the attachment of assets
of the Company or its Restricted Subsidiaries having a value in excess of (a)
$10,000,000, which attachment represents a Lien on assets of the Company or
such Restricted Subsidiary in which the Collateral Agent has a security
interest pursuant to the Collateral Documents and which has priority over the
security interest on such assets pursuant to the Collateral Documents or (b)
$25,000,000, which attachment represents a Lien on assets of the Company or
such Restricted Subsidiary in which the Collateral Agent does not have a
security interest pursuant to the Collateral Documents shall constitute an
Event of Default, provided, that
no Default or Event of Default shall occur under clause (b) above until the 60th
day following such order or if, within such 60 day period, the Company delivers
to the Trustee an opinion from one of the Designated Investment Banks to the
effect that the net value of the equity of the Company (taking into account all
Indebtedness of the Company and its Restricted Subsidiaries and the

 

86

 

judgment that resulted in such order) is
equal to at least 5% of the principal amount of the Notes Outstanding at the
date of such opinion; or

(10) the issuance or reinstatement of any medida cautelar, suspension order or similar
order issued at the request of, or with the acquiescence of, the Company or any
Affiliate or Associate by a court or other governmental body of competent
jurisdiction that affects or could affect the Company’s or its Restricted
Subsidiaries’ obligations with respect to the Notes, the Guarantees, this
Indenture or the Collateral Documents; or

(11) the failure of the Company or any of its Restricted Subsidiaries to
(i) apply any Net Cash Proceeds from any Asset Disposition or Qualifying
Disposition or any VAT Cash Proceeds as provided in Section 5.18(b) or
(d), which failure continues for a period of five Business Days after the
Company is required to apply such proceeds pursuant to Section 5.18(b) or (d)
or (ii) pledge (as a first priority Lien) any non-cash proceeds from any Asset
Disposition or Qualifying Disposition or non-cash VAT Proceeds as required by
Section 5.18(c) and the Collateral Documents, which failure continues for
a period of five Business Days after the receipt of such proceeds; or

(12) the failure of the Company to cause any Restricted Subsidiary that
is required to execute and deliver a Guarantee to execute and deliver such
Guarantee and any accompanying Collateral Document as required by Section 5.23 or
Article Fourteen; or

(13) except as permitted by this Indenture, any Guarantee is held in any
judicial proceeding to be unenforceable or invalid in any material respect or
shall cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Guarantee.

For
the avoidance of doubt, the foregoing clause (9) of this Section 6.01 shall not
be construed to preclude the occurrence of an Event of Default if any of the
events set forth in such clause results in an event that would be an Event of
Default under clauses (7) or (8) of this Section 6.01.

SECTION 6.02   DEFAULT RATE OF INTEREST.  Following an
Event of Default, the rate at which the Notes accrue interest shall increase by
2.00% per annum (the “Default Rate”).  In addition, following an Event of Default,
any unpaid interest and Additional Amounts, if any, will accrue interest at the
Default Rate until such time as full payment is made thereon.

SECTION 6.03   ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.  If an Event of Default (other than an Event
of Default specified in clause (7) or (8) of Section 6.01) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Notes may declare the principal
of all the Notes, together with all accrued and unpaid interest and Additional
Amounts, if any, to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by Holders), and upon any such
declaration such amounts shall become immediately due and payable.  Notwithstanding the foregoing, if an Event
of Default specified in

 

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clause (7) or (8) of Section 6.01 occurs and is continuing, the
principal of the Notes, together with all accrued and unpaid interest and
Additional Amounts, if any, shall automatically be accelerated and such
amounts, as of the date of acceleration,  shall be and
become due and payable immediately, without any notice or other act on the part
of the Trustee or any Holder of the Notes.

Upon any acceleration pursuant to this Section 6.03, the Trustee and
the Collateral Agent, through their agents and attorneys, may proceed, and upon
the request of Holders of not less than a majority in principal amount of the
Outstanding Notes shall proceed, to foreclose on the Collateral.  To institute such foreclosure proceedings,
the Trustee shall deliver a Notice of Sale as prescribed by each applicable
Collateral Document, in each case with a copy to the Company.

At
any time after such a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Notes, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:

(1)   the
Company has paid or deposited with the Trustee a sum sufficient to pay:

(A)          all overdue interest
and Additional Amounts, if any, on all Notes,

(B)           the
principal of (and premium, if any, on) any Notes which have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the Notes,

(C)           to
the extent that payment of such interest is lawful, interest upon overdue
interest and Additional Amounts, if any, at the rate borne by the Notes, and

(D)          all
sums paid or advanced by the Trustee hereunder and the expenses, disbursements,
advances and reasonable compensation of the Trustee, its agents and counsel;
and

(2)   all
Events of Default, other than the non-payment of the principal of Notes which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.14.

No
such rescission shall affect any subsequent default or impair any right
consequent thereon.

SECTION 6.04   COLLECTION OF INDEBTEDNESS BY TRUSTEE;
TRUSTEE MAY PROVE DEBT.  The Company covenants that:

(1)   in case default shall be made in the payment of any installment of
interest or Additional Amounts on any of the Notes, as and when the same shall
become due and payable, and such default shall have continued for a period of
five  Business Days, and

 

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(2)   in case default shall be made in the payment of the principal of
or premium, if any, on any of the Notes when and as the same shall have become
due and payable, whether upon maturity of the Notes or upon redemption or upon
declaration or otherwise,

then,
upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the Holders of such Notes, the whole amount that then shall have
become due and payable on such Notes for principal and premium, if any,
interest and Additional Amounts with interest upon the overdue principal and
premium, if any, of each such Note and (to the extent legally enforceable under
applicable law) upon any installments of interest and Additional Amounts, at
the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder.

In
addition to the rights and powers set forth in Section 317(a) of the Trust
Indenture Act, the Trustee shall be entitled to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Holders of the Notes allowed in any judicial proceeding
relative to the Company, any Guarantor or other obligor upon the Notes, its
creditors, or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute the same
after the deduction of its charges and expenses; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by each of the
Holders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for compensation and expenses,
including counsel fees incurred by it up to the date of such distribution.

If
an Event of Default occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

SECTION 6.05   TRUSTEE MAY FILE PROOFS OF CLAIM.  In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company, any Guarantor or any other obligor upon the
Notes or the property of the Company, any Guarantor or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

(i)            to file and prove a claim for the whole amount of
principal (and premium, if any) and interest and Additional Amounts, if any,
owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and any predecessor trustee (including any claim for reasonable
compensation, expenses,

 

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disbursements and advances of the Trustee and
any predecessor trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and

(ii)           to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for expenses, disbursements, advances and
reasonable compensation of the Trustee and any predecessor trustee, their
agents and counsel, and any other amounts due the Trustee and any predecessor
trustee under Section 7.06.

Nothing
herein contained shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.

SECTION 6.06   TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF NOTES.  All rights of action and claims under this Indenture, the
Collateral Documents or the Notes (including the Guarantees) may be prosecuted
and enforced by the Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of expenses, disbursements, advances and reasonable compensation of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Notes in respect of which such judgment has been recovered.

SECTION 6.07   APPLICATION OF MONEY OR PROPERTY
COLLECTED.  Subject to Article Thirteen, any money or property collected by
the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money or property on account of principal (or premium, if any), interest
or Additional Amounts, upon presentation of the Notes and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the
Trustee and any predecessor trustee under Section 7.06; and

SECOND: To the payment of the amounts then
due and unpaid for principal of (and premium, if any), interest and Additional
Amounts on the Notes in respect of which or for the benefit of which such money
or property has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Notes for principal (and
premium, if any) and interest and Additional Amounts, respectively; and

 

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THIRD: 
to the Company or the Guarantors or to such party as a court of
competent jurisdiction shall direct.

The Trustee may fix a record date and payment
date for any payment to Holders of Notes pursuant to this Section 6.07.

SECTION 6.08   LIMITATION
ON SUITS.  No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, the
Guarantees or the Collateral Documents, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:

(1)   such Holder has previously given written notice to the Trustee of
a continuing Event of Default;

(2)   the Holders of not less than 25% in aggregate principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

(3)   such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory against the costs, expenses and liabilities to be
incurred in compliance with such request;

(4)   the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity or security has failed to institute any such proceeding;
and

(5)   no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of at least a majority
in aggregate principal amount of the Outstanding Notes;

it being understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture, the Guarantees or the Collateral Documents to affect,
disturb or prejudice the rights of any other Holders, or to obtain or to seek
to obtain priority or preference over any other Holders or to enforce any right
under this Indenture, the Guarantees or the Collateral Documents, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.

SECTION 6.09   RIGHTS OF HOLDERS OF NOTES TO RECEIVE
PAYMENT.  Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal and interest and Additional Amounts, if any, on such Note,
on or after the respective due dates expressed in such Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder, except that no Holder shall have
the right to institute any such suit, if and to the extent that the institution
or prosecution thereof or the entry of judgment therein would under applicable
law result in the surrender, impairment, waiver, or loss of the Liens pursuant
to the Collateral Documents upon any property or assets subject to the Liens.

 

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SECTION 6.10   RESTORATION OF RIGHTS AND REMEDIES.  If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture, the Guarantees or the Collateral Documents and
such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the
Guarantors, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

SECTION 6.11   RIGHTS AND REMEDIES CUMULATIVE.  Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in the last paragraph of Section 3.09, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

SECTION 6.12   DELAY OR OMISSION NOT WAIVER.  No delay or
omission of the Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given
by this Article or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.

SECTION 6.13   CONTROL
BY HOLDERS.  The Holders of at least a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that:

(1)   such direction shall not be in conflict with any rule of law or
with this Indenture,

(2)   the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and

(3)   the Trustee may decline to follow any such direction if the
Trustee’s board of directors or executive committee of directors or Responsible
Officers shall determine in good faith that the action or proceeding so directed
would involve it in personal liability, or if the Trustee in good faith shall
determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders not joining
in the giving of such direction, it being understood that the Trustee shall
have no duty to ascertain whether or not such actions or forbearances are
unduly prejudicial to such Holders.

 

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SECTION 6.14   WAIVER
OF PAST DEFAULTS.  The Holders of at least a majority in aggregate principal amount
of the Outstanding Notes may on behalf of the Holders of all the Notes waive
any past default hereunder and its consequences, except a default

(1)   in the payment of the principal of (or premium, if any), interest
or Additional Amounts on any Note, or

(2)   in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.

Upon
any such waiver, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.

ARTICLE
SEVEN

CONCERNING THE TRUSTEE

SECTION 7.01   DUTIES
OF TRUSTEE.

(a)   If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise
or use under the circumstances in the conduct of its own affairs.

(b)   Except
during the continuance of an Event of Default:

(1)   The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.

(2)   In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, but in the case
of any certificate or opinion which by any provision hereof is specifically
required to be furnished to the Trustee or which the Trustee relies on, the
Trustee shall examine the certificates and opinions submitted to determine
whether or not they conform to the requirements of this Indenture.

(c)   The
Trustee may not be relieved from liability for its negligent actions, its
negligent failure to act or its willful misconduct, except that:

(1)   This paragraph does not limit the effect of paragraph (b) of this
Section 7.01;

(2)   The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;

 

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(3)   The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.13; and

(4)   No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(d)   Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b) and (c) of this Section 7.01.

(e)   The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives security or indemnity satisfactory to it against any loss, cost,
liability or expense.

(f)    The
Trustee shall not be liable for interest on any money received by it.

(g)   Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.

(h)   The
Trustee shall make payments pursuant to Sections 5.01, 5.16 and 5.18 to the
Holders as soon as practicable in accordance with the terms of this Indenture
after receipt from the Company or the Guarantors of the funds.

SECTION 7.02   CERTAIN RIGHTS OF TRUSTEE.  Except as
otherwise provided in Section 315 of the Trust Indenture Act:

(a)   The
Trustee may rely and shall be protected in acting, or refraining from acting,
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

(b)   Any
request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an instrument signed in the name of the Company by
the (i) Chairman of the Board of Directors, a Vice Chairman of the Board
of Directors, its Director General, its President or any Vice President and
(ii) its Director of Administration, its Secretary or an Assistant
Secretary or its Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof be herein specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Trustee by a copy thereof certified
by the Secretary or an Assistant Secretary of the Company;

(c)   Before
it acts or refrains from acting, the Trustee may consult with counsel and the
advice of counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

 

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(d)   The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders, pursuant to the provisions of this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;

(e)   The
Trustee shall not be liable for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture;

(f)    Prior
to the occurrence of an Event of Default hereunder and after the curing or
waiving of all Events of Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, appraisal, bond, debenture or other paper or document with respect to
the Notes unless requested in writing to do so by the Holders of not less than
a majority in aggregate principal amount of the Notes then Outstanding; provided, however, that (i) if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine, during normal business hours and upon reasonable notice,
the books, records and premises relevant to such inquiry or investigation,
either personally or by agent or attorney; and (ii) if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may require reasonable indemnity or
security against such expenses or liabilities as a condition to so proceeding.
The reasonable expense of every such investigation shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand;

(g)   The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;

(h)   The
Trustee shall not be deemed to have knowledge of a Default or Event of Default
until a Responsible Officer has received written notice thereof;

(i)    The
Trustee shall not have any duty, express or implied, to monitor the financial
condition of the Company;

(j)    The
Holders, by accepting the Notes, authorize the Trustee to execute any such
Collateral Documents as the Trustee shall reasonably be requested to execute;
and

(k)   The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, to
the extent reasonable, and shall be enforceable by, to the extent reasonable,
the Trustee in each of its capacities hereunder, and to each agent, custodian
and other Person employed by it to act hereunder.

SECTION 7.03   TRUSTEE NOT RESPONSIBLE FOR RECITALS,
ETC.  The recitals contained herein
and in the Notes and the Guarantees, except the Trustee’s

 

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certificate and the representation as to the power of the Trustee to
enter into this Indenture and accept and execute the trusts hereby created,
shall be taken as the statements of the Company and the Guarantors, and the
Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes other than its
certificate of authentication.  The
Trustee shall not be (i) accountable for the use or application by the Company
of any of the Notes or of the proceeds of such Notes, (ii) accountable for any
money paid to the Company, or upon the Company’s direction, if made under and
in accordance with any provision of this Indenture, or 

(iii) responsible for the use or application of any money received by any
Paying Agent other than itself.

SECTION 7.04   TRUSTEE AND OTHERS MAY HOLD NOTES.  The Trustee
or any Paying Agent or Note Registrar or any other agent of the Company or the
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Sections 7.08 and 7.15, may otherwise deal
with the Company, any Guarantor or any other obligor on the Notes with the same
rights it would have if it were not Trustee, Paying Agent, Note Registrar or
such other agent.

SECTION 7.05   MONEYS HELD BY TRUSTEE OR PAYING AGENT.  Subject to Sections 12.02 and 12.03, all moneys received by the
Trustee or any Paying Agent shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.  Neither the Trustee nor any Paying Agent shall
be under any liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.  So long as no Event of Default shall have
occurred and be continuing, all interest earned on such moneys shall be paid to
the Company from time to time upon a Company Order.  The provisions of this Section 7.05 shall not apply to the
Company acting as its own Paying Agent pursuant to Section 5.03.

SECTION 7.06   COMPENSATION OF TRUSTEE AND ITS LIEN.  The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder and under the Collateral Documents (which
shall be agreed to from time to time by the Company and the Trustee in writing
and which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and, except as herein otherwise
expressly provided, the Company will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture or any of
the Collateral Documents (including reasonable compensation and the expenses
and disbursements of its counsel and of all persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. If any property other than cash shall at any time be
subject to the lien of this Indenture, the Trustee, if and to the extent
authorized by a receivership or bankruptcy court of competent jurisdiction or
by the supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax liens or other prior liens or encumbrances thereon.

 

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Subject
to the further provisions of this paragraph, the Company and the Guarantors
jointly and severally covenant and agree to indemnify the Trustee for, and to
hold it harmless against, any and all loss, liability, claim, damage or expense
incurred without negligence or bad faith on the part of the Trustee, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including liability which the Trustee may incur as a result
of failure to withhold, pay or report taxes arising out of the transactions
contemplated by this Indenture (other than taxes based on the Trustee’s income)
and including the costs and expenses of defending itself against any claim or
liability in the premises. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. 
The Company shall defend the claim, and the Trustee shall cooperate in
the defense.  The Trustee may have
separate counsel, and the Company shall pay the reasonable fees and expenses of
such counsel.  The Company shall have no
obligation to pay for any settlement of any such claim made without its
consent.

The
obligations of the Company and the Guarantors under this Section 7.06 shall
survive the resignation of the Trustee and/or the satisfaction and discharge or
termination of this Indenture.

The
obligations of the Company under this Section 7.06 shall constitute additional
indebtedness hereunder.  Such additional
indebtedness shall be secured by a lien prior to that of the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Notes.

When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(7) or (8) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under
any Bankruptcy Law.

SECTION 7.07   RIGHT OF TRUSTEE TO RELY ON CERTIFICATE
OF CERTAIN OFFICERS.  Except as otherwise provided in Section 315 of the Trust
Indenture Act, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.

SECTION 7.08   PERSONS ELIGIBLE FOR APPOINTMENT AS
TRUSTEE.  The Trustee hereunder shall at all times be a corporation which
complies with the requirements of the Trust Indenture Act, and has (or in the
case of a corporation included in a bank holding company, the bank holding
company and related entities have) a combined capital and surplus of at least
$50,000,000.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority to which it is subject,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  This Indenture shall always have a Trustee which shall

 

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be eligible to act as Trustee under Section 310(a)(1) and Section
310(a)(2) of the Trust Indenture Act. 
If the Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall comply with the provisions of Section 310(b) of the Trust
Indenture Act; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.  If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 7.08, the Trustee shall resign immediately in the manner and with
the effect hereinbefore specified in this Article Seven.  The provisions of Section 310 of the Trust
Indenture Act shall apply to the Company, the Guarantors and any other obligor
of the Notes.

SECTION
7.09   RESIGNATION AND
REMOVAL OF TRUSTEE; APPOINTMENT OF SUCCESSOR.

(a)   The
Trustee, or any trustee or trustees hereafter appointed, may at any time resign
by giving written notice to the Company and by giving notice of such
resignation to the Holders of Notes in the manner provided in Section
1.05.  Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning trustee and one copy to the
successor trustee.  If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the delivery of such notice of resignation, the resigning trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Holder who has been a bona fide Holder of a Note or
Notes for at least six months may, subject to the requirements of Section
315(e) of the Trust Indenture Act, on behalf of such Holder and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.

(b)   In
case at any time either of the following shall occur:

(1)   the Trustee shall cease to be eligible under Section 7.08 and
shall fail to resign after written request therefor by the Company or by any
such Holder, or

(2)   the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;

then, in either such case, the Company may remove the Trustee, and
appoint a successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors of the Company, one copy of which instrument
shall be delivered to the trustee so removed and one copy to the successor
trustee, or, subject to the requirements of Section 315(e) of the Trust
Indenture Act, any Holder who has been a bona fide Holder of a Note or Notes
for at least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the

 

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appointment of a successor trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.

(c)   The
Holders of at least a majority in aggregate principal amount of the Notes at
the time Outstanding may at any time remove the Trustee and appoint a successor
trustee by delivering to the trustee so removed, to the successor trustee so
appointed and to the Company, the evidence provided for in Section 8.01 of the
action taken by the Holders.

(d)   Any
resignation or removal of the Trustee and any appointment of a successor
trustee pursuant to this Section shall become effective only upon acceptance of
appointment by the successor trustee as provided in Section 7.10.

SECTION 7.10   ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
TRUSTEE.  Any successor trustee appointed under Section 7.09 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the Company or of the successor
trustee, the Trustee ceasing to act shall, upon payment of any such amounts
then due it pursuant to the provisions of Section 7.06, execute and deliver an
instrument transferring to such successor trustee all the rights, powers and
trusts of the Trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers.  Any Trustee
ceasing to act shall, nevertheless, retain a lien upon all property or funds
held or collected by such Trustee to secure any amounts then due it pursuant to
Section 7.06.

No
successor trustee with respect to the Notes shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
trustee shall with respect to the Notes be qualified under the Trust Indenture
Act and eligible under Section 7.08.

Upon
acceptance of appointment by a successor trustee, the Company shall give notice
of the succession of such trustee hereunder to the Holders of Notes in the
manner provided in Section 1.05.  If the
Company fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.

SECTION 7.11   MERGER, CONVERSION OR CONSOLIDATION OF TRUSTEE.  Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such successor trustee shall be
qualified under the Trust Indenture Act and eligible under the provisions of
Section 7.08 hereof and Section 310(a) of the Trust Indenture Act.

 

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SECTION 7.12   AUTHENTICATING
AGENTS.  There may be an Authenticating Agent appointed by the Trustee
from time to time with power to act on its behalf and subject to its direction
in connection with the authentication and delivery of Notes issued upon
exchange, transfer or redemption thereof as fully to all intents and purposes
as though such Authenticating Agent (the “Authenticating
Agent”) had been expressly authorized to authenticate and
deliver Notes, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as though
authenticated by the Trustee hereunder. For all purposes of this Indenture
(except in the case of original issuance of Notes and the issuance of Notes in
replacement of lost, stolen, mutilated or destroyed Notes), the authentication
and delivery of Notes by an Authenticating Agent appointed pursuant to the
provisions of this Section 7.12 shall be deemed to be the authentication and
delivery of such Notes “by the Trustee,” and whenever this Indenture provides
(except in the case of original issuance of the Notes and the issuance of Notes
in replacement of lost, stolen, mutilated or destroyed Notes) that “the Trustee
shall authenticate and deliver” Notes, such authentication and delivery by any
Authenticating Agent shall be deemed to be authentication and delivery by the
Trustee. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or the District of Columbia, with a combined capital and surplus of
at least $25,000,000 and authorized under such laws to act as an authenticating
agent, duly registered to act as such, if and to the extent required by
applicable law and subject to supervision or examination by Federal, State or
District of Columbia authority.  If such
corporation publishes reports of its condition at least annually, pursuant to
law or the requirements of such authority, then for the purposes of this
Section 7.12 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.  If at
any time an Authenticating Agent shall cease to be eligible to act as such in
accordance with the provisions of this Section 7.12, it shall resign
immediately in the manner and with the effect herein specified in this Section
7.12.

Any
corporation into which any Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be
a party, or any corporation succeeding to all or substantially all of the
corporate agency business of any Authenticating Agent, shall be the successor
of the Authenticating Agent hereunder, if such successor corporation is
otherwise eligible to act as such in accordance with the provisions of this
Section 7.12, without the execution or filing of any paper or any further act
on the part of the Trustee or the Authenticating Agent or such successor
corporation.

Any
Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. 
The Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Company.  Upon receiving such a
notice of resignation or upon a termination, or in case at any time any
Authenticating Agent shall cease to be eligible to act as such in accordance
with the provisions of this Section 7.12, the Trustee may appoint a successor
authenticating agent.  Upon the
appointment, at any time after the original issuance of any of the Notes, of
any successor, additional or new authenticating agent, the Trustee shall give
written notice of such appointment to the Company and shall at the expense of
the Company give notice of such appointment to all Holders of Notes in the
manner provided in Section 1.05.  Any

 

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successor authenticating agent upon acceptance of its appointment
pursuant to the provisions of this Section 7.12 shall become vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if initially named as an Authenticating Agent herein.  No successor authenticating agent shall be
appointed unless eligible to act as such in accordance with the provisions of
this Section 7.12.

Any
Authenticating Agent by the acceptance of its appointment shall be deemed to
have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section 7.12 and to have agreed with the
Trustee that: it will perform and carry out the duties of an Authenticating
Agent as herein set forth, including, among other things, the duties to
authenticate and deliver Notes when presented to it in connection with
exchanges, registrations of transfer or redemptions thereof; it will keep and
maintain, and furnish to the Trustee from time to time as requested by the
Trustee, appropriate records of all transactions carried out by it as
Authenticating Agent and will furnish the Trustee such other information and
reports as the Trustee may reasonably require; and it will notify the Trustee
promptly if it shall cease to be eligible to act as Authenticating Agent in
accordance with the provisions of this Section 7.12. Any Authenticating Agent
by the acceptance of its appointment shall be deemed to have agreed with the
Trustee to indemnify the Trustee against any loss, liability or expense
incurred by the Trustee and to defend any claim asserted against the Trustee by
reason of any acts or failures to act of such Authenticating Agent, but such
Authenticating Agent shall have no liability for any action taken by it in
accordance with the specific written direction of the Trustee.

The
Trustee agrees to pay to each Authenticating Agent from time to time reasonable
compensation and expenses for its services (to the extent such compensation is
not paid by the Company), and the Trustee shall be entitled to be reimbursed
for such payments subject to the provisions of Section 7.06.

The
provisions of Sections 7.03, 7.04 and 7.07 shall inure to the benefit of each
Authenticating Agent to the same extent that they inure to the benefit of the
Trustee.

If
an appointment is made pursuant to this Section 7.12, the Notes may have endorsed
thereon, in addition to the Trustee’s certificate of authentication, an
alternate certificate of authentication in substantially the following form:

This
is one of the Notes referred to in the within-mentioned Indenture.

	
  The Bank
  of New York,

  
	
  As Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  As Authenticating Agent

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  
			

 

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SECTION 7.13   REPORTS
BY TRUSTEE.  On or before May 1, in every year, so long as any Notes are
outstanding hereunder, the Trustee shall transmit to the Holders a brief
report, dated as of the preceding April 1, and as otherwise required by
Section 313 of the Trust Indenture Act in accordance with the procedures set
forth in said Section.

SECTION 7.14   TRUSTEE
RISK.  None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing
that the repayment of such funds or liability is not reasonably assured to
it.  Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the requirements of the Trust Indenture Act.

SECTION 7.15   NOTICE
OF DEFAULT.  If any
Default or any Event of Default occurs and is continuing and if such Default or
Event of Default is actually known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Holder, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, notice of such Default or Event of
Default within 90 days after it occurs, unless such Default or Event of Default
has been cured; provided, however, that, except in the case of a default in
the payment of the principal of, premium, if any, or interest or Additional
Amounts on any Note, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Holders.

SECTION 7.16   PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY.  The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture
Act.  A Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent indicated therein.

SECTION 7.17   TRUSTEE’S APPLICATION FOR INSTRUCTIONS
FROM THE COMPANY.  Any
application by the Trustee for written instructions from the Company may, at
the option of the Trustee, set forth in writing any action proposed to be taken
or omitted by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be effective.  The Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.

SECTION 7.18   LIMITATION OF LIABILITY.  It is understood by the parties hereto other
than The Bank of New York (the “Bank”)
that the sole recourse of the parties hereto other than the Bank in respect of
the obligations of the trust hereunder and under the other documents
contemplated hereby and related hereto to which it is a party shall be to the
parties

 

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hereto other than the Bank.  In
addition, the Bank is entering into this Indenture and the other documents
contemplated hereby and related hereto to which it is a party solely in its
capacity as Trustee under this Indenture and not in its individual capacity
(except as expressly stated herein) and in no case shall the Bank (or any
Person acting as successor trustee under this Indenture) be personally liable
for or on account of any of the statements, representations, warranties,
covenants or obligations stated to be those of the Company or the Guarantors
hereunder or thereunder, all such liability, if any, being expressly waived by
the parties hereto and any Person claiming by, through or under such party, provided,
however, that the Bank (or any such successor trustee) shall be
personally liable hereunder and thereunder for its own negligence or willful
misconduct or for its material breach of its covenants, representations and
warranties contained herein or therein, to the extent expressly covenanted or
made in its individual capacity.  In no
event shall the Trustee, in its capacity as Paying Agent, Note Registrar or in
any other capacity hereunder, be liable under or in connection with this
Indenture for indirect, special, incidental, punitive or consequential losses
or damages of any kind whatsoever, including but not limited to lost profits,
whether or not foreseeable, even if the Trustee has been advised of the
possibility thereof and regardless of the form of action in which such damages
are sought.  The provisions of this Section
shall survive the termination of this Indenture and the resignation or removal
of the Trustee.

ARTICLE
EIGHT

CONCERNING THE HOLDERS

SECTION 8.01   EVIDENCE OF ACTION TAKEN BY HOLDERS.  Whenever in
this Indenture it is provided that the Holders of a specified percentage or a
majority in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), such action may be taken
by (i) any instrument or any number of instruments of similar tenor executed in
person or by agent or proxy appointed in writing, (ii) vote of the Holders of
Notes at a meeting duly called and held in accordance with the provisions of
Article Nine, or (iii) a combination of such instrument or instruments and such
vote, and the fact that at the time of taking any such action the Holders of
such specified percentage or majority have joined therein may be evidenced by
(a) such instrument or instruments, (b) the record of such vote, or (c) a
combination of such instrument or instruments and any such record, and except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments and/or such record are delivered to the Trustee,
and where expressly required, to the Company.

SECTION 8.02   PROOF OF EXECUTION OF INSTRUMENTS AND
OF HOLDING OF NOTES.  Subject to the provisions of Sections 7.01, 7.02 and 9.05 hereof
and Section 315 of the Trust Indenture Act, proof of the execution of any
instrument by a Holder or his agent or proxy and proof of the holding by any
Person of any of the Notes shall be sufficient if made in the following manner:

The
fact and date of the execution by any such Person of any instrument may be
proved by the certificate of any notary public or other officer authorized to
take acknowledgments of deeds to be recorded in any State within the United
States, that the Person executing such instrument acknowledged to him the
execution thereof, or by an affidavit of a

 

103

 

witness to such execution sworn to before any such notary or other such
officer.  Where such execution is by an
officer of a corporation or association or a member of a partnership on behalf
of such corporation, association or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority.  The fact and date of the execution of any
such instrument may also be proved in any other manner which the Trustee may deem
sufficient.

The
ownership of Notes may be proved by the Note Registrar or by a certificate of
the Note Registrar.

If the Company shall solicit from the Holders of Notes any request,
demand, authorization, direction, notice, consent, waiver or other act, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders of Notes entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other act, but the
Company shall have no obligation to do so. 
Any such record date shall be fixed at the Company’s discretion in
accordance with Section 316(c) of the Trust Indenture Act.  If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other act
may be sought or given before or after the record date, but only the Holders of
Notes of record at the close of business on such record date shall be deemed to
be the Holders of Notes for the purpose of determining whether Holders of the
requisite proportion of Notes Outstanding have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other act, and for that purpose the Notes Outstanding shall be
computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than 180 days after the record date.

The
Trustee may require such additional proof, if any, of any matter referred to in
this Section 8.02 as it shall deem necessary.

The
record of any Holders’ meeting shall be proved as provided in Section 9.06.

SECTION 8.03   RIGHT OF REVOCATION OF ACTION TAKEN.  At any time
prior to (but not after) the earlier of (a) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, and (b) such earlier date as shall be
established by the Company and notice of which shall have been provided to the
Holders, any Holder of a Note the serial number of which is shown by the
evidence to be included in the Notes the Holders of which have consented to
such action may, by filing written notice with the Trustee at its principal
office and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Note. Except as aforesaid, any such action taken
by the Holder of any Note shall be conclusive and binding upon such Holder and
upon all future holders and owners of such Note, and of any Note issued in
exchange therefor or in place thereof, irrespective of whether or not any
notation in regard thereto is made upon such Note or any Note issued in
exchange therefor or in place thereof. 
Any action taken by the Holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the Holders of
all the Notes.

 

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ARTICLE NINE

HOLDERS’ MEETINGS

SECTION 9.01   PURPOSES FOR WHICH HOLDERS’ MEETINGS
MAY BE CALLED.  A meeting of Holders may be called at any time and from time to
time pursuant to this Article Nine for any of the following purposes:

(a)   to
give any notice to the Company or to the Trustee, or to give any directions to
the Trustee, or to waive or to consent to the waiving of any default hereunder
and its consequences, or to take any other action authorized to be taken by
Holders pursuant to Article Six;

(b)   to
remove the Trustee and appoint a successor trustee pursuant to Article Seven;

(c)   to
consent to the execution of an indenture or indentures supplemental hereto or
an amendment or amendments of the Collateral Documents pursuant to Section
10.02; or

(d)   to
take any other action authorized to be taken by or on behalf of the Holders of
any specified aggregate principal amount of the Notes under any other provision
of this Indenture or under applicable law.

SECTION 9.02   CALL OF MEETINGS BY TRUSTEE.  The Trustee
may at any time call a meeting of Holders to be held at such time and at such
place in The City of New York as the Trustee shall determine.  Notice of every meeting of Holders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given by the Trustee, in the manner
provided in Section 1.05, not less than 20 nor more than 180 days prior to the
date fixed for the meeting, to the Holders of the Notes.

SECTION 9.03   COMPANY AND HOLDERS MAY CALL MEETING.  In case the Company, pursuant to a resolution of its Board of
Directors, or the Holders of at least 10% in aggregate principal amount of the
Notes then Outstanding, shall have requested the Trustee to call a meeting of
Holders, by written request setting forth in general terms the action proposed
to be taken at the meeting, and the Trustee shall not have made the mailing of
the notice of such meeting within 20 days after receipt of such request, then
the Company or the Holders of such Notes in the amount above specified may
determine the time and the place in The City of New York for such meeting and
may call such meeting to take any action authorized in Section 9.01, by giving
notice thereof as provided in Section 9.02.

SECTION 9.04   PERSONS ENTITLED TO VOTE AT MEETING.  To be
entitled to vote at any meeting of Holders a Person shall, as of the opening of
business on the date of such meeting, be (a) a Holder of one or more Notes or
(b) a Person appointed by an instrument in writing as proxy for the Holder or
Holders of such Notes by a Holder of one or more such Notes.  The only Persons who shall be entitled to be
present or to speak at any meeting of Holders shall be the Persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

 

105

 

SECTION 9.05   DETERMINATION OF VOTING RIGHTS; CONDUCT
AND ADJOURNMENT OF MEETING.  Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any meeting
of Holders, in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall think fit.  Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 8.02
or other proof.  Except as otherwise
permitted or required by any such regulations, the holding of Notes shall be
proved in the manner specified in Section 8.02 and the appointment of any proxy
shall be proved in the manner specified in Section 8.02 or by having the
signature of the Person executing the proxy witnessed or guaranteed by any
bank, banker, trust company or firm satisfactory to the Trustee.

The
Trustee shall, by an instrument in writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders
as provided in Section 9.03, in which case the Company or the Holders calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman.  A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Holders of
at least a majority in principal amount of the Notes represented at the meeting
and entitled to vote.

At
any meeting each Holder of a Note or proxy shall be entitled to one vote for
each $1 principal amount of Notes held or represented by such Holder; provided,
however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not Outstanding and ruled by the chairman of
the meeting to be not Outstanding.  The
chairman of the meeting shall have no right to vote other than by virtue of
Notes held by such chairman or instruments in writing as aforesaid duly
designating such chairman as the Person to vote on behalf of other
Holders.  Any meeting of Holders duly
called pursuant to Section 9.02 or 9.03 may be adjourned from time to time, and
the meeting may be held as so adjourned without further notice.

At
any meeting, the presence of Persons holding or representing Notes in an
aggregate principal amount sufficient to take action upon the business for the
transaction of which such meeting was called shall be necessary to constitute a
quorum; but, if less than a quorum be present, the Persons holding or
representing at least a majority of the Notes represented at the meeting may
adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.

SECTION 9.06   COUNTING VOTES AND RECORDING ACTION OF
MEETING.  The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or of their representatives by proxy and the serial numbers
and principal amounts of the Notes held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting.  A record in duplicate of the
proceedings of each meeting of Holders shall be prepared by the secretary of
the meeting and there shall be attached to said record the

 

106

 

original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said notice
was given as provided in Section 9.02. The record shall show the serial numbers
of the Notes voting in favor of or against each resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary
of the meeting and one of the duplicates shall be delivered to the Company and
the other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.

Any
record so signed and verified shall, absent manifest error, be conclusive
evidence of the matters therein stated.

ARTICLE TEN

SUPPLEMENTAL INDENTURES AND AMENDMENT OF 

COLLATERAL DOCUMENTS

SECTION 10.01   SUPPLEMENTAL INDENTURES WITHOUT
CONSENT OF HOLDERS.  Without the consent of any Holders, the Company, when authorized
by a Board Resolution, the Guarantors and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto or one
or more amendments of the Collateral Documents, in form satisfactory to the
Trustee, for any of the following purposes:

(1)   to
evidence the succession of another Person to the Company or the Guarantors, and
the assumption by any such successor of the covenants of the Company or the
Guarantors herein and in the Notes and the Collateral Documents; or

(2)   to
add to the covenants of the Company or the Guarantors for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company
or the Guarantors; or

(3)   to
cure any ambiguity, to correct or supplement any provision herein or in the
Collateral Documents which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture or the Collateral Documents, provided such action
pursuant to this clause (3) shall not adversely affect the interests of the
Holders; or

(4)   to
comply with any requirements of the Commission in order to effect or maintain
the qualification of this Indenture under the Trust Indenture Act; or

(5)   to
evidence and provide for the acceptance and appointment hereunder of a successor
Trustee with respect to the Notes; or

(6)   to
mortgage, pledge, hypothecate or grant a Lien in favor of the Collateral Agent
for the benefit of Trustee and the Holders of the Notes as additional security
for the payment of principal of and interest and Additional Amounts, if any, on
the Notes by the Company or on the Guarantees by the Guarantors under this
Indenture in any property or assets, including any which are required to be
mortgaged, pledged or hypothecated, or in which a Lien is required to be granted
to the Collateral Agent, pursuant to this Indenture or the Collateral
Documents; or

 

107

 

(7)   to
release, or to evidence the release of, Collateral as expressly permitted by
Section 15.03 of this Indenture and by the Collateral Documents; or

(8)   to
add Guarantees with respect to the Notes, to secure the Notes or to release
Guarantors from Guarantees as provided by the terms of this Indenture; or

(9)   to
add additional Events of Default.

Upon
the request of the Company accompanied by a Board Resolution authorizing the
execution of any such amended or supplemental indenture or amendment of any of
the Collateral Documents, and upon receipt by the Trustee of the documents
described in Sections 7.02 and 7.07 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of any amended or supplemental
indenture or amendment of any of the Collateral Documents authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental indenture or
amendment of any of the Collateral Documents that affects its own rights,
duties or immunities under this Indenture or otherwise.

SECTION 10.02   SUPPLEMENTAL INDENTURES WITH CONSENT
OF HOLDERS.

(a)   With
the consent of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes, by act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution,
the Guarantors and the Trustee may enter into an indenture or indentures
supplemental hereto or one or more amendments or supplements to the Collateral
Documents for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or the Collateral
Documents or of modifying in any manner the rights of the Holders under this
Indenture or the Collateral Documents; provided, however, that no such
supplemental indenture or amendment or supplement to the Collateral Documents
shall, without the consent of the Holder of each Outstanding Note affected
thereby,

(1)   change
the Stated Maturity of the principal of, or any installment of interest or
Additional Amounts on, any Note, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, any Note
or any premium or the interest or Additional Amounts thereon is payable, impair
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date or, in the case of an Offer or an Excess Proceeds Offer which
has been made, on or after the applicable Repurchase Date or Proceeds Offer
Repurchase Date), or

(2)   reduce
the percentage in principal amount of the Outstanding Notes, the consent of
whose Holders is required for any such supplemental indenture or amendment to
the Collateral Documents, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or the
Collateral Documents or certain

 

108

 

defaults hereunder or thereunder and their consequences) provided for
in this Indenture or the Collateral Documents, or

(3)   modify
any of the provisions of this Section, Section 6.09 or Section 6.14, except to
increase any such percentage or to provide that certain other provisions of
this Indenture or the Collateral Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby, or

(4)           make any change in the ranking of the
Notes or the Guarantors that would adversely affect the Holders of the Notes.

 

(b)   Notwithstanding
the foregoing, except as expressly set forth in the Collateral Documents,
without the consent of the Holders of not less than 66 2/3% in aggregate principal
amount of the Outstanding Notes, the Company and the Guarantors may not enter
into an indenture or indentures supplemental hereto or one or more amendments
or supplements to the Collateral Documents to:

 

(1)                                                                                  release
(other than as expressly permitted by Section 15.03 and the Collateral
Documents), or create any additional Lien in favor of any Person other than the
Collateral Agent, the Holders or the Trustee in the Collateral, or

 

(2)                                                                                  modify
any of the provisions of Section 5.18 or of this Section 10.02(b).

 

(c)   It
shall not be necessary for any act of Holders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such act shall approve the substance thereof.

SECTION 10.03   EXECUTION OF SUPPLEMENTAL INDENTURES.  In executing, or accepting the additional
trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.

SECTION 10.04   EFFECT OF SUPPLEMENTAL INDENTURES.  Upon the
execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes, and every Holder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

SECTION 10.05   CONFORMITY WITH TRUST INDENTURE ACT.  Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.

 

109

 

SECTION 10.06   REFERENCE IN NOTES TO SUPPLEMENTAL
INDENTURES.  Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee and the Company as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.

Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment, supplement or waiver.

ARTICLE
ELEVEN

SUCCESSOR CORPORATION

SECTION 11.01   WHEN
COMPANY MAY MERGE, ETC.  The Company
shall not consolidate with, merge with or into, or transfer, directly or
indirectly by lease, assignment, sale or otherwise, including, without
limitation, as a result of the merger or consolidation of a Restricted
Subsidiary with any other Person (collectively, a “Transfer”), all or substantially all
of its assets in one transaction or a series of related transactions to, any
Person or group of affiliated Persons or permit any of its Restricted
Subsidiaries to enter into any such transaction or transactions if such
transaction or transactions in the aggregate would result in a transfer of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries on a consolidated basis, unless:

(1)   either
the Company shall be the continuing Person, or the Person formed by such
consolidation or into which the Company is merged or to which all or
substantially all of the assets of the Company are Transferred or to which all
or substantially all of the assets of the Company and its Restricted
Subsidiaries are Transferred (the “Surviving
Entity”) shall be a Person organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia
or the United Mexican States and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and this Indenture and the Collateral Documents; provided, that a corporation at all times shall be a
co-obligor together with the continuing Person or transferee if the continuing
Person or transferee is itself not a corporation;

(2)   immediately
before and immediately after giving effect to such transaction no Default or
Event of Default exists;

(3)   immediately
after giving effect to such transaction, the Consolidated Net Worth of the
Company and its Restricted Subsidiaries or the Surviving Entity is equal to or
greater than the Consolidated Net Worth of the Company and its Restricted
Subsidiaries immediately prior to the transaction; and

(4)   the
Company has delivered to the Trustee an Officers’ Certificate (attaching the
arithmetic computations to demonstrate compliance with paragraph (3)) and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer or lease and

 

110

 

such supplemental indenture comply with this Section 11.01 and that all
conditions precedent herein provided for relating to such transactions have
been complied with.

Notwithstanding
anything to the contrary in this Section 11.01, (i) this Article Eleven shall
not apply to any transfer that is a Qualifying Disposition and (ii) any Restricted
Subsidiary may merge with or into or transfer all or any portion of its assets
to, the Company or any Wholly Owned Subsidiary of the Company that is a
Restricted Subsidiary hereunder, provided, that (i) such Restricted
Subsidiary shall provide a Guarantee in accordance with and to the extent
required by Section 5.23, (ii) such merger or transfer shall comply
with Section 14.06, (iii) the Company and any such Wholly Owned
Subsidiary of the Company that results from or is the survivor of such merger,
or is the transferee of such assets, succeeds to, and assumes in a writing (in
form and substance satisfactory to the Trustee) the obligations of, the
predecessor or transferor Restricted Subsidiary under any and all Collateral
Documents that such Restricted Subsidiary is a party or otherwise bound by or
subject to and (iv) the rights of the Trustee under any and all of the
Collateral Documents (including, but not limited to, the priority of the
security interest and Lien of the Trustee in any Collateral thereunder) shall
not be adversely affected thereby.

SECTION 11.02   SUCCESSOR CORPORATION.  Upon any
consolidation or merger or any Transfer of all or substantially all of the
assets of the Company in accordance with Section 11.01, except as otherwise
provided herein, the successor corporation formed by such consolidation or into
which the Company is merged or to which such Transfer is made, shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein.

ARTICLE
TWELVE

SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

SECTION 12.01   TERMINATION OF COMPANY’S OBLIGATIONS.  The Company may terminate all of its and the Guarantors’
obligations under the Notes, this Indenture and the Collateral Documents,
except those obligations referred to below, if:

(a)   all
Notes previously authenticated and delivered (other than destroyed, lost or
stolen Notes which have been replaced or paid) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or

(b)   either
(i) the Notes mature within one year or all of them are to be called for
redemption within one year under arrangements reasonably satisfactory to the
Trustee for giving the notice of redemption or (ii) if the Notes do not mature
or are not to be called for redemption in accordance with clause (i) hereof,
the Company shall have delivered to the Trustee either (A) a ruling directed to
the Trustee received from the Internal Revenue Service to the effect that the
Holders of the Notes will not recognize income, gain or loss for Federal income
tax purposes as a result of the Company’s exercise of its option under this
Section 12.01(b)(ii) and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been the case
if such option had not been exercised or (B) an Opinion of Counsel from
nationally recognized United States counsel, to the same effect as the ruling
described in

 

111

 

clause (A) above with no material qualifications and an Opinion of
Counsel in the United Mexican States reasonably acceptable to the Trustee confirming
that Holders of the Notes will not recognize income, gain or loss for Mexican
taxes purposes as a result of such legal defeasance and will be subject to
Mexican taxes (including withholding taxes) on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred, in the case of either clause (i) or (ii); and

(1) subject to applicable stock exchange
requirements, if any, the Company irrevocably deposits with the Trustee under
the terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds in trust solely for the benefit of the Holders
for that purpose, money or U.S. Government Obligations, maturing as to
principal and interest in such amounts and at such times as are sufficient (in
the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee), without consideration of any reinvestment of such interest on such
U.S. Government Obligations, to pay principal of and interest and Additional
Amounts on the Outstanding Notes to maturity or redemption, as the case may be,
and to pay all other sums payable by it hereunder, including Additional
Amounts, if any, provided that the Trustee shall have been irrevocably
instructed to apply such trust funds to the payment of principal and interest
and Additional Amounts, if any, on the Outstanding Notes;

(2)           no Default or Event
of Default with respect to this Indenture, the Collateral Documents or the
Notes shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit or shall occur on or before 91 days
after the date of such deposit and such deposit will not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which it is bound;

(3)           the Company shall
have paid or caused to be paid all sums then payable by the Company hereunder
and under the Notes;

(4)           such deposit shall
not cause the Trustee to have a conflicting interest as defined in and for
purposes of the Trust Indenture Act;

(5)           the Company has
delivered to the Trustee an Opinion of Counsel from nationally recognized
United States counsel, with no material qualifications, stating that (A) the
deposit shall not result in the Company, the Trustee or the trust becoming or
being deemed to be an “investment company” under the Investment Company Act of
1940, as amended, and (B) upon making the deposit, a valid trust is created at
the time of such deposit and the Holders of the Notes will have the sole
beneficial ownership interest under applicable law in the money or U.S.
Government Obligations so deposited in such trust, except that the Opinion of
Counsel referred to in this clause (B) may contain a qualification that in the
event that a court of competent jurisdiction were to determine that the trust
funds remained property of the Company after such deposit, the Holders of the
Notes will have a nonavoidable first priority perfected security interest under
applicable

 

112

 

law in the money or U.S. Government Obligations so deposited, which
security interest will not be subject to any prior rights of holders of any
other Indebtedness; and

(6)           the Company shall
take any and all acts necessary to create and perfect, in favor of the Holders
of the Notes, a first priority security interest in the money or U.S.
Government Obligations so deposited and shall take any other action and execute
and deliver any other documents that may reasonably be requested by the Trustee
to effectuate such security interest, and shall do all of the above at such
appropriate time so that such security interest shall attach to the deposit at
the time such deposit is made;

and
in either case of (a) or (b) the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel each stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.

It
is the intention of the parties hereto that a valid trust for the benefit of
the Holders of the Notes be created at the time that the Company makes the
deposit pursuant to Section 12.0l(b)(1). The security interest in such deposit
that is granted herein to the Holders of the Notes is intended solely as
protection for the Holders of the Notes in the event that a court of competent
jurisdiction were to determine either that (i) such trust had not been validly
created or (ii) such trust is not enforceable.

Notwithstanding
the foregoing clause (b), prior to the end of the 91-day period referred to in
clause (b)(2) above, none of the Company’s obligations under this Indenture
shall be discharged, and subsequent to the end of such 91-day period the
Company’s obligations in Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.06, 3.07,
3.08, 3.09, 5.01, 5.02, 5.04, 5.11, 7.06, 7.09, 7.10, 12.02, 12.03 and 12.04
shall survive until the Notes are no longer Outstanding. Thereafter, only the
Company’s obligations in Sections 7.06, 12.03 and 12.04 shall survive. If and
when a ruling from the Internal Revenue Service or Opinion of Counsel referred
to in clause (b)(ii) above is able to be provided specifically without regard
to, and not in reliance upon, the continuance of the Company’s obligations
under the Notes and Section 5.01, then the Company’s obligations under the
Notes and Sections 5.01 and 5.02 shall cease upon delivery to the Trustee of
such ruling or opinion and compliance with the other conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture.

After
a deposit and delivery of an Officers’ Certificate and an Opinion of Counsel
and compliance with the other conditions precedent provided for herein relating
to the satisfaction and discharge of this Indenture, the Trustee upon request
shall acknowledge in writing the satisfaction and discharge of the Company’s
obligations under this Indenture except for those surviving obligations
specified above.

“U.S. Government Obligations” means
non-callable, direct obligations of the United States of America for the
payment of which the full faith and credit of the United States of America is
pledged.

 

113

 

SECTION 12.02   APPLICATION OF TRUST MONEY.  The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 12.01. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of and interest and Additional
Amounts on the Notes.

SECTION 12.03   REPAYMENT
TO COMPANY.  Subject to Section 12.02 the Trustee and the Paying Agent shall
promptly pay to the Company upon written request any excess money or Notes held
by them at any time and they shall thereupon be relieved from all liability
with respect to such money.

The
Trustee and the Paying Agent shall pay to the Company upon written request any
money held by them for the payment of principal or interest or Additional
Amounts that remains unclaimed for two years; provided that the Company
shall have first caused notice of such payment to be mailed to each Holder
entitled thereto no less than 30 days prior to such repayment. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and the Paying Agent with
respect to such money shall cease.

SECTION 12.04   REINSTATEMENT.  If the Trustee or the Paying
Agent is unable to apply any money in accordance with Section 12.02 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
12.01 until such time as the Trustee or the Paying Agent is permitted to apply
all such money in accordance with Section 12.02; provided that if the Company
has made any payment of interest on or Additional Amounts or principal of any
Note because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or the Paying Agent.

ARTICLE
THIRTEEN

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 13.01   PERSONAL IMMUNITY FROM LIABILITY OF
INCORPORATORS, STOCKHOLDERS, ETC.  No recourse
under or upon any obligation, covenant or agreement of this Indenture or any
indenture supplemental hereto, or of any Note, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator or
against any past, present or future stockholder, officer, director, employee or
agent, as such, of the Company or the Trustee or any Paying Agent or
Authenticating Agent or of any successor thereto, either directly or through
the Company or the Trustee or any Paying Agent or Authenticating Agent or any
successor thereto, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability and any and all such claims being hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and issue of the Notes.

 

114

 

ARTICLE
FOURTEEN

GUARANTEE

SECTION 14.01   GUARANTEE.  By its execution hereof, the
Guarantors acknowledge and agree that they receive substantial benefits from
the Company and that they are providing their Guarantee for good and valuable
consideration, including, without limitation, such substantial benefits and
services. Accordingly, subject to the provisions of this Article Fourteen, each
of the Guarantors hereby jointly and severally unconditionally guarantees on a
senior secured basis to each Holder of a Note authenticated and delivered by
the Trustee and its successors and assigns that: (i) the principal of, and
premium, Additional Amounts and interest (including, without limitation, any
interest that accrued after, or would accrue but for, the commencement of a
proceeding of the type described in Section 6.01(7) or (8)) on the Notes
shall be duly and punctually paid in full when due, whether at maturity, by
acceleration, call for redemption, upon an Offer, upon an Excess Proceeds Offer
or otherwise, and interest on overdue principal, and premium, if any,
Additional Amounts and (to the extent permitted by law) interest on any
interest, if any, on the Notes, Additional Amounts, if any, and all other
obligations (including fees, expenses or other) of the Company to the Holders,
or the Trustee or the Collateral Agent hereunder, under the Notes and the
Collateral Documents and the Guarantors under the Notes, this Indenture, the
Collateral Documents and the Guarantees, whether now or hereafter existing,
shall be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration, call for
redemption, upon an Offer, upon an Excess Proceeds Offer or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set
forth in Section 14.05 (collectively, the “Guarantee
Obligations”). An Event of Default under this Indenture or the
Notes shall constitute an event of default under this Guarantee, and shall
entitle the Trustee or the Holders of Notes to accelerate the obligations of
the Guarantors hereunder in the same manner and to the same extent as the
Guarantee Obligations of the Company. 
Each Guarantee is intended to be superior to or pari passu in right of
payment with all Indebtedness of the respective Guarantor and each Guarantor’s
obligations under this Indenture, the Notes and the Collateral Documents are
independent of any obligation of the Company or any other Guarantor under this
Indenture, the Notes and the Collateral Documents.  Each Guarantor further agrees that the obligations under this
Indenture, the Notes and the Collateral Documents may be extended or renewed,
in whole or in part, without notice or further assent from such Guarantor, and
that each Guarantor will remain bound under this Article Fourteen
notwithstanding any extension or renewal of any obligation under this
Indenture, the Notes and the Collateral Documents.

Subject
to the provisions of this Article Fourteen, the Guarantors hereby agree that
their Guarantee hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes, this Indenture or the Collateral
Documents, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any thereof, the entry of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Guarantors. The Guarantors hereby expressly waive and
relinquish: (a) any right to require the Trustee, the Holders or the Company
(each, a “Benefited Party”)
to proceed against the

 

115

 

Company or any other Person or to proceed against or exhaust any
security held by a Benefited Party at any time or to pursue any other remedy in
any secured party’s power before proceeding against the Guarantors; (b) any
defense that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or Persons or the failure of a Benefited Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any other Person or Persons; (c) demand, protest and
notice of any kind (except as expressly required by this Indenture), including
but not limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or obligation or of any action or non-action on the
part of the Guarantors, the Company, any Benefited Party, any creditor of the
Guarantors or the Company or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefited Party, including
but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal; and (f)  the benefits of orden  excusion  y  division
and of prior judgment, levy, execution and other rights provided for in
Articles 2814, 2815, 2817, 2818, 2820, 2821, 2823, 2827 and 2836 of the Civil
Code of the Federal District of Mexico, and the corresponding articles of the
other states of Mexico, which articles are not reproduced herein as a result of
the express acknowledgment that the contents of said Articles are known to each
Guarantor.  Therefore, each Guarantor hereby
irrevocably and expressly waives its rights under the benefits of, Articles
2846 and 2847 of the Civil Code for the Federal District of Mexico.  Each Guarantor also hereby irrevocably and
expressly waives any requirement of judicial demand for payment, whether under
Article 2848 or 2849 of the Civil Code for the Federal District of Mexico or
otherwise.  All such Articles are not
reproduced herein as a result of the express acknowledgment of each Guarantor
that the contents of said Articles are known to it.  The Guarantee shall be discharged upon the payment in full of all
Guarantee Obligations, including the principal, premium, if any, and interest
and Additional Amounts, if any, on the Notes and all other costs provided for
under this Indenture or as provided in Article Fourteen, and after such
termination is not reinstated except as set forth in the second succeeding
paragraph.  Each Guarantor waives notice
of any default under the Notes or the obligations under this Indenture, the
Notes and the Collateral Documents.  The
obligations of each Guarantor hereunder shall not be affected by (i) the
failure of any Holder, Trustee or the Collateral Agent to assert any claim or
demand or to enforce any right or remedy against the Company or any other
Person under this Indenture, the Notes, the Collateral Documents or any other
agreement or otherwise; (ii) any extension or renewal of any thereof;
(iii) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Notes, the Collateral Documents or
any other agreement; (iv) the release of any security held by any Holder,
the Collateral Agent or the Trustee for the obligations under this Indenture,
the Notes and the Collateral Documents or any of them; (v) the failure of
any Holder, the Trustee or the Collateral Agent to exercise any right or remedy
against any guarantor of the obligations under this Indenture, the Notes and
the Collateral Documents; or (vi) any change in the ownership of such
Guarantor.

Each
Guarantor further agrees that its Guarantee herein constitutes a guarantee of
payment, performance and compliance when due (and not a guarantee of
collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the obligations under
this Indenture, the Notes and the Collateral Documents.

 

116

 

If
any Holder or the Trustee is required by any court or otherwise to return to
either the Company or the Guarantors, or any trustee or similar official acting
in relation to either the Company or the Guarantors, any amount paid by the
Company or the Guarantors to the Trustee or such Holder, the Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
The Guarantors agree that they shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guarantee Obligations
hereby until payment in full of all such obligations guaranteed hereby. The
Guarantors agree that, as between themselves, on the one hand, and the Holders
of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guarantee
Obligations, and (y) in the event of any acceleration of such obligations as
provided in Article Six hereof, such Guarantee Obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantors for the
purpose of the Guarantee.

Each
Guarantor agrees that it shall not be entitled to any right of subrogation,
contribution, exoneration, indemnification or reimbursement in relation to the
Holders in respect of any Guarantee Obligations until payment in full of all
Guarantee Obligations.  If any amount
shall be paid to such Guarantor in violation of the preceding sentence at any
time prior to the later of the payment in full of the Notes and all other
amounts payable under this Indenture and under each Guarantee upon the Stated
Maturity of the Notes, such amount shall be held in trust for the benefit of
the Holders and the Trustee and shall forthwith be paid to the Trustee to be
credited and applied to the Notes and all other amounts payable under each
Guarantee, whether matured or unmatured, in accordance with the terms of this
Indenture, or to be held as security for any obligations under this Indenture,
the Notes and the Collateral Documents or other amounts payable under any
Guarantee thereafter arising.

Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) subject to this
Article Fourteen, the maturity of the Guarantee Obligations may be
accelerated as provided in Article Six for the purposes of each Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guarantee Obligations, and (y) in the event
of any acceleration of such Guarantee Obligations as provided in
Article Six, such obligations (whether or not due and payable) shall,
forthwith become due and payable by the Guarantor for the purposes of each
Guarantee.

A
Guarantor that makes a distribution or payment under its Guarantee shall be
entitled to contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each such other Guarantor for all payments,
damages and expenses incurred by that Guarantor in discharging the Company’s
obligations with respect to the Notes and this Indenture or any other Guarantor
with respect to its Guarantee, so long as the exercise of such right does not
impair the rights of the Holders of the Notes under the Guarantees.

Each
Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section 14.01.

 

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SECTION 14.02   LIMITATION ON GUARANTOR LIABILITY.  Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
of such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal, state or foreign law to the
extent applicable to any Guarantee.  To
effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor under its
Guarantee and this Article Fourteen shall be limited to the maximum amount
as will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Guarantor that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Fourteen, result in
the obligations of such Guarantor under its Guarantee not constituting a
fraudulent transfer or conveyance.  Each
Guarantor that makes a payment or distribution under its Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each such other Guarantor.

SECTION 14.03   SUCCESSORS
AND ASSIGNS.  This Article Fourteen shall be binding
upon each Guarantor and its successors and assigns and shall inure to the benefit
of the successors and assigns of the Trustee and the Holders and, in the event
of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Notes shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.

SECTION 14.04   NO WAIVER.  Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this
Article Fourteen shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege.  The rights,
remedies and benefits of the Trustee and the Holders herein expressly specified
are cumulative and not exclusive of any other rights, remedies or benefits
which either may have under this Article Fourteen, at law, in equity, by
statute or otherwise.

SECTION 14.05   EXECUTION AND DELIVERY OF GUARANTEE.  To evidence the Guarantee set forth in Section 14.01 hereof, the
Guarantors agree that a notation of the Guarantee substantially in the form
included in Section 2.04 shall be endorsed on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
the Guarantors by an officer of the Guarantors.

The
Guarantor agrees that the Guarantee set forth in this Article Fourteen shall
remain in full force and effect and apply to all the Notes notwithstanding any
failure to endorse on each Note a notation of the Guarantees.

If
an officer whose facsimile signature is on a Note or a notation of Guarantee no
longer holds that office at the time the Trustee authenticates the Note on
which the Guarantee is endorsed, the Guarantee shall be valid nevertheless.

 

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The
delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of the Guarantors.

In
the event that any Subsidiary subsequent to the date of this Indenture, is
required to become a Guarantor by Section 5.23 hereof, the Company shall
cause such Subsidiary to execute supplemental indentures to this Indenture and
Guarantees in accordance with Section 5.23 hereof and this
Article Fourteen, to the extent applicable.

SECTION 14.06   GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS.  No
Guarantor may consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person whether or not affiliated
with such Guarantor unless (i) subject to the provisions of the following
Section, the Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) assumes all the obligations of such Guarantor under
the Notes, this Indenture and the Collateral Documents; and
(ii) immediately after giving effect to such transaction, no Default or
Event of Default exists.

SECTION 14.07   RELEASES FOLLOWING SALE OF ASSETS OR CAPITAL STOCK.  In the event of a sale or other disposition of all of the assets
of any Guarantor (other than to the Company, another Guarantor or a Restricted
Subsidiary), by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor (other than to, the
Company, another Guarantor or a Restricted Subsidiary), then such Guarantor (in
the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the entity acquiring the property (in the event of a sale or other disposition
of all of the assets of such Guarantor) will be released and relieved of any
obligations under its Guarantee and any such acquiring entity will not be
required to assume any obligations of such Guarantor under the applicable
Guarantee; provided
that such sale or other disposition complies with all applicable provisions of
this Indenture including, without limitation, Section 5.18 and this
Article Fourteen.

Any
Guarantor not released from its obligations under its Guarantee shall remain
liable for the full amount of principal of and interest and Additional Amounts
on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article Fourteen.

SECTION 14.08   APPLICATION OF CERTAIN TERMS AND
PROVISIONS TO THE GUARANTORS.

(a)   For
purposes of any provision of this Indenture that provides for the delivery by
the Guarantors of an Officers’ Certificate and/or an Opinion of Counsel, the
definitions of such terms in Section 1.01 shall apply to the Guarantors as if
references therein to the Company were references to the Guarantors.

(b)   Any
request, direction, order or demand that by any provision of this Indenture is
to be made by the Guarantors, shall be sufficient if evidenced as described in
Section 1.04 as if references therein to the Company were references to the
Guarantors.

 

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(c)   Any
notice or demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Notes to or
on the Guarantors may be given or served as described in Section 1.04 as if
references therein to the Company were references to the Guarantors.

(d)   Upon
any demand, request or application by the Guarantors to the Trustee to take any
action under this Indenture, the Guarantors shall furnish to the Trustee such
certificates and opinions as are required in Section 1.02 hereof as if all
references therein to the Company were references to the Guarantors.

ARTICLE
FIFTEEN

SECURITY

SECTION 15.01   COLLATERAL; COLLATERAL DOCUMENTS.

(a)   To secure the due and
punctual payment of principal of and interest, and Additional Amounts on the
Notes by the Company when and as the same shall be due and payable (whether on
an Interest Payment Date, at Stated Maturity, by acceleration, call for
redemption, upon an Offer or an Excess Proceeds Offer, or otherwise) and
interest on the overdue principal of, and premium, if any, Additional Amounts,
if any, and (to the extent permitted by law) interest on unpaid interest, if
any, on, the Notes and performance of all other obligations of the Company and
the Guarantors to the Holders of the Notes, the Trustee or the Collateral Agent
under this Indenture, the Notes, the Guarantees and the Collateral Documents,
according to the terms hereunder and thereunder, on the Initial Issuance Date
each of the Company and the Guarantors will pledge or cause to be pledged for
the benefit of the Holders of the Notes, and will grant or cause to be granted
to the Collateral Agent for the benefit of the Trustee and equal and ratable
benefit of the Holders of the Notes a first priority security interest, subject
only to existing liens and restrictions specified in the Collateral Documents,
in the assets and securities of the Company and the Guarantors set forth in the
Collateral Documents (all such assets and securities, together with
(i) all other assets and securities acquired after the Initial Issuance
Date, (ii) all dividends or distributions paid or payable in respect of,
or payments or rights to receive payment in respect of the purchase, redemption
or other retirement or acquisition for value of, any securities included
therein, and (iii) all cash, instruments, securities and other property
and proceeds thereof from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for or in payment of
any such assets or securities, but excluding, in any case, such of the
foregoing that may be duly released pursuant to Section 15.03, collectively,
the “Collateral”).  On the Initial Issuance Date, each of the
Company and the Guarantors shall enter into the applicable Collateral Documents
to create the security interests with respect to the Collateral.  The Trustee, the Guarantors and the Company
hereby acknowledge and agree that the Collateral Agent holds the Collateral in
trust for the benefit of the Holders and the Trustee, among others, pursuant to
the terms of the Collateral Documents.

(b)   Each Holder, by its acceptance of a Note,
consents and agrees to the terms of this Article Fifteen and of the Collateral
Documents (including, without limitation, the provisions providing for
foreclosure and release of the Collateral) as the same may be in effect or may
be amended from time to time in accordance with their terms and the terms of
this Indenture, and authorizes and directs the Trustee and the Collateral Agent
to enter into the Collateral

 

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Documents and to
perform their respective obligations and exercise their respective rights
thereunder in accordance therewith; provided, however, that if
any provisions of this Article Fifteen or of the Collateral Documents limit,
qualify or conflict with the duties imposed by the provisions of the Trust
Indenture Act, the Trust Indenture Act will control.

(c)   As
more fully set forth in, and subject to the provisions of the TMM Multimodal Trust Agreement, the Holders, and the Trustee and the
Collateral Agent on behalf of such Holders, will have rights in and to the
Collateral thereunder that are subject to the rights that have been created in
favor of the holders of the certificates under the Receivables Securitization Facility.

(d)   As
among the Holders, the Collateral shall be held for the equal and ratable
benefit of the Holders without preference, priority or distinction of any
thereof over any other.

(e)   The Company and the Guarantors will do or
cause to be done all such acts and things as may be necessary or reasonably
requested by the Trustee, or as may be required by the provisions of this
Article Fifteen or the Collateral Documents, to assure and confirm to the
Trustee the security interests in the Collateral contemplated hereby, or by the
Collateral Documents or any part thereof, as from time to time constituted, so
as to render the same available for the security and benefit of this Indenture
and of the Notes and each Guarantee, according to the intent and purposes
herein and therein expressed. The Company and the Guarantors shall take, or
shall cause to be taken, upon request of the Trustee or the Collateral Agent,
any and all actions reasonably required to cause the Collateral Documents to
create and maintain, as security for the obligations of the Company and the
Guarantors under this Indenture, the Notes, the Guarantees and the Collateral
Documents, valid and enforceable first priority and perfected Liens in and on
the Collateral as provided in the Collateral Documents, subject only to
existing liens and restrictions specified in the Collateral Documents, in favor of the Collateral Agent for the
benefit of the Trustee and for the equal and ratable benefit of the Holders of
the Notes.

(f)    The
Company and the Guarantors shall pledge any additional Collateral, and shall
grant to the Collateral Agent for
the benefit of the Trustee and for the equal and ratable benefit of the Holders
of the Notes a first priority security interest in, any non-cash proceeds of
any Asset Disposition or Qualifying Disposition and any non-cash VAT Proceeds,
and in furtherance thereof the Company and the Guarantors, as applicable, the
Trustee and, if applicable, the Collateral Agent shall, promptly upon receipt
of such non-cash proceeds, enter into either a new Collateral Document or a
supplement or amendment of an existing Collateral Document (whichever
Collateral Document to be determined based on the character and location of the
Collateral) in order to provide for the creation of such security interest.

(g)   Any
cash held from time to time as Collateral that (i) was received following
the occurrence and during the continuance of any Default or Event of Default as
a dividend, distribution or payment in respect of the purchase, redemption, or
other retirement or acquisition for value of, any securities constituting
Collateral (other than any cash of the type described in clause (ii)) or
(ii) constitutes Net Cash Proceeds of an Asset Disposition or Qualifying
Disposition or VAT Cash Proceeds, in each case, until applied in accordance
with Section 5.18, shall be converted into U.S. Dollars and held in a cash
collateral account for the benefit of the

 

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Holders of the Notes pursuant to the applicable Collateral Document
under which the assets disposed of pursuant to such Asset Disposition or
Qualifying Disposition were held and shall be invested in Cash
Equivalents.  The Trustee shall give
notice to the applicable Collateral Agent directing such Collateral Agent to
invest such cash in Cash Equivalents; provided
that cash shall not be required to be converted into U.S. Dollars
unless such cash arising from (i) or (ii) above exceeds the U.S. Dollar
equivalent of $10 million.

 

SECTION 15.02   VOTING RIGHTS AND PAYMENT OF DIVIDENDS
AND DISTRIBUTIONS IN RESPECT OF COLLATERAL.  So long as no Default or Event of Default
shall have occurred and be continuing, each of the Company and the Guarantors
shall be permitted to receive directly all dividends or distributions paid in
respect of, or payments in respect of the purchase, redemption, or other
retirement or acquisition for value of, any securities constituting Collateral,
except for Net Cash Proceeds of Asset Dispositions or Qualifying Dispositions
and VAT Cash Proceeds which shall be applied in accordance with Section
5.18.  So long as no Default or Event of
Default shall have occurred and be continuing, each of the Company and the
Guarantors shall have the right to vote, or to provide a consent, waiver or
ratification, as it sees fit in its sole discretion, any securities
constituting Collateral, provided that no vote may be cast, and no
consent, waiver or ratification may be given or action taken, which would be
inconsistent with or violate any provision of this Indenture, the Notes, the
Guarantees or the Collateral Documents. 
The Trustee shall notify the applicable Collateral Agent of a Default or
an Event of Default upon obtaining knowledge thereof.

 

SECTION
15.03   RELEASE OF COLLATERAL.

(a)   So
long as no Default or Event of Default shall have occurred and be continuing,
the Company will be entitled, from time to time, to request the Trustee to give
notice to the applicable Collateral Agent directing such Collateral Agent to
cause the release of all or a portion of the Collateral from the Collateral
Pledge in accordance with the following terms hereof; provided, however,
that (x) such request to the Trustee must be in writing and accompanied by
an Officers’ Certificate and an Opinion of Counsel in English (which may be
Mexican counsel to the Company) stating that such release is permitted by this
Indenture and the applicable Collateral Document and (y) the applicable
conditions set forth in this Section 15.03 are met.  The Company shall, as promptly as practicable after such release
pursuant to this Section 15.03 give notice thereof to Holders of the Notes in
the manner provided under Section 1.05 hereof. 
Upon receipt of such Officers’ Certificate and Opinion of Counsel, the
Trustee will direct the Collateral Agent to execute, deliver and acknowledge
any necessary or proper instruments of release to evidence the release of any
Collateral permitted to be released pursuant to this Indenture and the
Collateral Documents.

(i)            Releases in connection with Asset Dispositions and
Qualifying Dispositions.   In
connection with an Asset Disposition or a Qualifying Disposition with respect
to assets or securities that constitute Collateral, the Company may request the
Trustee to direct the applicable Collateral Agent to release from the
Collateral Pledge the assets or securities to be sold in such disposition;
provided that (A) the Company shall have delivered to the Trustee, in

 

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form and substance satisfactory to it and its
counsel, the Officers’ Certificate and Opinion of Counsel required by Section
15.03(a) and an Opinion of Counsel to the effect that the Notes, the
Guarantees, this Indenture and the Collateral Documents will be secured by a
first priority security interest in the Net Cash Proceeds and the non-cash
proceeds of such Asset Disposition or Qualifying Disposition, and (B)
simultaneously with such release, the Company shall cause such Net Cash
Proceeds to be paid in U.S. Dollars directly into the cash collateral account
as set forth in the applicable Collateral Document under which the assets
disposed of pursuant to such Asset Disposition or Qualifying Disposition were
held and shall cause any non-cash proceeds to be delivered to the applicable
Collateral Agent under the Collateral Documents.

(ii)           Releases of Net Cash Proceeds and VAT Cash Proceeds.  In connection with any application of Net
Cash Proceeds or VAT Cash Proceeds or any Excess Proceeds Offer pursuant to
Section 5.18 following an Asset Disposition or a Qualifying Disposition, the
Company may request the Trustee to direct the applicable Collateral Agent to
release from the Collateral Pledge the Net Cash Proceeds or VAT Cash Proceeds,
as the case may be; provided that the Company shall have delivered to the
Trustee, in form and substance satisfactory to it and its counsel, the
Officers’ Certificate and Opinion of Counsel required by Section 15.03(a).

(iii)          Releases
of Cash Held in Cash Collateral Account.  Upon the cure of
any Default or Event of Default as described in clause (i) of
Section 15.01(g) and provided that no other Default or Event of Default
shall have occurred and be continuing, any cash deposited in a collateral
account pursuant to such clause (i) shall be delivered to the Company and the
Lien thereon shall be released.  In
addition, to the extent that the Company makes an Excess Proceeds Offer
pursuant to Section 5.18 and the amount required to be paid pursuant to such
Excess Proceeds Offer is less than the amount of cash in the collateral
account, and provided no Default or Event of Default shall have occurred and be
continuing, all cash not applied pursuant to such Excess Proceeds Offer shall,
immediately following the settlement of such Excess Proceeds Offer, be
delivered to the Company and the Lien thereon shall be released.  In connection with any release pursuant to
this clause (iii), the Company shall have delivered to the Trustee, in form and
substance satisfactory to it and its counsel, the Officers’ Certificate and
Opinion of Counsel required by clause (a) of this Section 15.03.

Notwithstanding
the foregoing, any Net Cash Proceeds resulting from a Qualifying Disposition
shall be subject to any rights of the holders of the certificates under the
Receivables Securitization Facility as provided in Section 5.18(b), provided
the Net Cash Proceeds payable to such holders of certificates shall be the
Investor Certificate Obligations (as defined in the TMM Multimodal Trust
Agreement) with respect to all certificates at the time outstanding; provided,
that for purposes hereof, the principal balance outstanding of such
certificates shall not exceed $76,300,000.

 

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(b)     The release of any Collateral from the
Collateral Pledge or the release of, in whole or in part, the Liens created by
the Collateral Documents, or the termination of the Collateral Documents, will
not be deemed to impair the Liens on the Collateral in contravention of the
provisions hereof if and to the extent that the Liens on Collateral are
released, or the Collateral Documents are terminated, pursuant to this Section
15.03 and the applicable Collateral Documents. 
The Trustee and each of the Holders acknowledge that a release of Collateral
or a Lien in accordance with the terms of this Section 15.03 and the Collateral
Documents will not be deemed for any purpose to be an impairment of the Lien on
the Collateral in contravention of the terms of this Indenture.  To the extent applicable, the Company, the
Guarantors and each other obligor on the Notes shall cause Section 314(d)
of the Trust Indenture Act relating to the release of property or securities
from the Lien hereof and of the Collateral Documents to be complied with. Any
certificate or opinion required by Section 314(d) of the Trust Indenture
Act may be made by an officer of the Company, except in cases which
Section 314(d) of the Trust Indenture Act requires that such certificate
or opinion be made by an independent Person, in which case such independent
Person shall be selected by the Company. 
In releasing any Collateral pursuant to the terms of this Indenture,
including the provisions of this Section 15.03, or any Collateral
Document, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, in addition to the documents required by this
Section 15.03, an Officers’ Certificate certifying that such release is
authorized or permitted by this Indenture and the Collateral Documents and that
all conditions precedent, if any, to such release have been satisfied.

SECTION 15.04   REMEDIES
UPON ACCELERATION.  Upon the occurrence and during
the continuance of an Event of Default and after the acceleration of the
principal amount of the Notes pursuant to Section 6.03 (so long as such
acceleration has not been rescinded), the Trustee shall deliver an appropriate
Notice of Sale to the applicable Collateral Agent with a copy to the Company,
in accordance with Section 6.03 hereof. 
Thereafter, the Trustee shall take specific action in accordance with
the directions of the Holders of not less than a majority in principal amount
of the Outstanding Notes, subject to the terms set forth herein and in
accordance with applicable law.  In the
event that Holders of not less than a majority in principal amount of the
Outstanding Notes fail, within 30 days of a request for direction by the
Trustee, to direct the Trustee to take specific action hereunder or under the
applicable Collateral Documents, the Trustee may retain an investment banker,
broker/dealer, or other expert as the Trustee may determine, and subject to
Sections 7.01 and 7.02, the advice of such investment banker,
broker/dealer or other expert shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the Trustee
hereunder, or as agent of the applicable Collateral Agent under the applicable
Collateral Documents, in good faith and in reliance thereon; provided
that such investment banker, broker/dealer or other expert was selected by the
Trustee with due care.  Upon the receipt
of any Notice of Sale, the Company shall promptly inform the Trustee whether
any of the Collateral is subject to a right of first refusal or other similar
restriction.

SECTION 15.05   FURTHER ASSURANCES AND SECURITY. 
The Company and the Guarantors will execute, acknowledge and deliver to
the Trustee, at the Company’s and/or such Guarantors’ expense, at any time and
from time to time such further assignments, transfers, assurances or other
instruments as may be reasonably required by the Trustee, to assure and confirm
to the Trustee, in its capacity as Collateral Agent, the Liens in the

 

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Collateral contemplated hereby and by the Collateral Documents, all to
the extent contemplated hereby and by the Collateral Documents.

SECTION 15.06   OPINIONS AS TO RECORDING.

(a)   Each
of the Company and the Guarantors represents that it has caused or will
promptly cause to be executed and delivered, filed and recorded and covenants
that it will promptly cause to be executed and delivered and filed and
recorded, all instruments and documents, and represents that it has done and
will do or will cause to be done all such acts and other things, at the
Company’s or the Guarantors’ expense, as applicable, as are necessary to
subject the applicable Collateral to valid Liens and to perfect those Liens to
the extent contemplated hereby and by the Collateral Documents.

(b)   The
Company and the Guarantors shall furnish to the Trustee and the Collateral
Agent promptly after the execution and delivery of this Indenture, Opinions of
Counsel of United States and Mexican counsel either (i) stating that in
the opinions of such counsel all action has been taken with respect to the
recording, registering and filing of this Indenture, financing statements or
other instruments or otherwise necessary to make effective the Liens intended
to be created by the Collateral Documents and reciting the details of such
action, or (ii) stating that, in the opinions of such counsel, no such action
is necessary to make such Lien effective. 
Such Opinion of Counsel may contain such qualifications, assumptions and
limitations as are customary for such opinions.

(c)   The
Company and the Guarantors shall furnish to the Trustee and the Collateral
Agent within three months after each anniversary of the Initial Issuance Date,
Opinions of Counsel of United States and Mexican counsel, dated as of such
date, stating either that (i) in the opinions of such counsel, all action
has been taken with respect to the recording, filing, re-recording, and
refiling of this Indenture and related financing statements, continuation
statements and other instruments and documents as is necessary to maintain the
effectiveness of the Liens intended to be created by the Collateral Documents
and reciting the details of such action or (ii) in the opinions of such
counsel, no such action is necessary to maintain the effectiveness of such
Liens.  Such Opinions of Counsel may contain
such qualifications, assumptions and limitations as are customary for such
opinions.

(d)   The
Company and the Guarantors shall otherwise comply with the provisions of
Section 314(b) and, as applicable Sections 314(c), (d) and (e) of the
Trust Indenture Act.

SECTION 15.07   LIMITATION ON DUTY OF TRUSTEE IN RESPECT OF THE COLLATERAL
PLEDGE.

(a)   Beyond
the exercise of reasonable care in the custody thereof, the Trustee shall have
no duty as to any property in the Collateral Pledge under the Collateral
Documents in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Trustee shall not
be responsible for filing any financing or continuation statements or recording
any documents or instruments in any public office at any time or times or
otherwise perfecting or maintaining the perfection of any security interest in
such property.  The Trustee

 

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shall be deemed to have exercised reasonable care in the custody of
such property in its possession if the property is accorded treatment
substantially equal to that which it accords its own property, and shall not be
liable or responsible for any loss or diminution in the value of any of such
property by reason of the act or omission of any carrier, forwarding agency or
other agent or bailee selected by the Trustee with due care and in good faith.

(b)   The
Trustee shall not be responsible for the existence, genuineness or value of any
such property or for the validity, perfection, priority or enforceability of
the Liens in any of the property, whether impaired by operation of law or by
reason of any action or omission to act on its part hereunder, except to the
extent such action or omission constitutes negligence, bad faith or willful
misconduct on the part of the Trustee, for the validity or sufficiency of such
property or any agreement or assignment contained therein, for the validity of
the title of the Company or any Guarantor to such property, for insuring such
property or for the payment of taxes, charges, assessments or Liens upon such
property or otherwise as to the maintenance of such property.  The Trustee shall have no duty to inquire as
to the performance or observance of any of the terms of this Indenture or any
of the Collateral Documents by the Company, any Guarantor or the applicable
Collateral Agent.

(c)   Except
as set forth in the Collateral Documents, the Trustee shall have no duty to
exercise any voting rights with respect to the Collateral or otherwise manage,
monitor, supervise or insure the business to which the Collateral relate.

(d)   Other
than as contemplated hereunder, the Trustee shall have no duty to act outside
of the United States in respect of any Collateral located in a jurisdiction
other than the United States.

SECTION 15.08   AUTHORIZATION OF ACTIONS TO BE TAKEN BY COLLATERAL AGENT UNDER THE
COLLATERAL DOCUMENTS.  The Trustee, in its capacity
as Collateral Agent, may, in its sole discretion and without the consent of the
Holders, on behalf of the Holders, take all actions it deems necessary or
appropriate in order to (i) enforce any of the terms of the Collateral
Documents and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company and the Guarantors hereunder and
under the Notes, the Guarantees and the Collateral Documents.  The Trustee, in its capacity as Collateral
Agent, shall have the power to institute and to maintain such suits and
proceedings as such Person may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders or of the Trustee).

SECTION 15.09   AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE COLLATERAL
DOCUMENTS.  The Trustee, in its capacity
as Collateral Agent, is authorized to receive any funds for the benefit of the
Holders distributed

 

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under the Collateral Documents, and to make further distributions of
such funds to the Holders according to the provisions of this Indenture and the
Collateral Documents.

SECTION
15.10   ASSIGNMENT OF RIGHTS, NOT
ASSUMPTION OF DUTIES. 
Anything herein contained to the contrary notwithstanding, (a) the
Company and the Guarantors shall remain liable under each of the Collateral
Documents to the extent set forth therein to perform all of their duties and
obligations thereunder to the same extent as if this Indenture had not been
executed, (b) the exercise by the Trustee or the Holders of any of their
rights, remedies or powers hereunder shall not release the Company or the
Guarantors from any of their duties or obligations under each of the Collateral
Documents and (c) neither the Holders nor the Trustee shall have any obligation
or liability under any of the Collateral Documents by reason of or arising out
of this Indenture, nor shall the Holders or Trustee be obligated to perform any
of the obligations or duties of the Company or the Guarantors thereunder or,
except as expressly provided herein with respect to the Trustee, to take any
action to collect or enforce any claim for payment assigned hereunder or
otherwise.

 

SECTION 15.11   NO ELECTION OF REMEDIES.  Nothing
contained in this Indenture or in any of the Collateral Documents shall require
the Trustee or any Collateral Agent to foreclose on any of the Collateral under
any one of the Collateral Documents before foreclosing on any of the Collateral
under any of the other Collateral Documents, all of which shall be in the sole
discretion of the Trustee or the Collateral Agent, as applicable.

 

127

 

In Witness Whereof, the parties hereto have
caused this Indenture to be duly executed as of the day and year first above
written.

	
  Grupo
  Tmm, S.A.,

  	
   

  
	
  as Issuer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tmm Holdings, S.A. De C.V.,

  
	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan Fernandez
  Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Operadora De Apoyo Logístico, S.A.
  De C.V.,

  
	
  as Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Compañía Arrendadora Tmm, S.A. De
  C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					

 

128

 

	
  Transportes Marítimos México, S.A.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  División De Negocios
  Especializados, S.A., De C.V.

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Inmobiliaria
  Tmm, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lacto Comercial Organizada, S.A. De
  C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					

 

129

 

	
  Línea Mexicana Tmm, S.A. De
  C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Naviera Del Pacifico, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Operadora Marítima Tmm, S.A. De
  C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Operadora Portuaria De Tuxpan, S.A.
  De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan Fernandez
  Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					

 

130

 

	
  Personal Marítimo, S.A. De
  C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Servicios Administrativos De
  Transportación, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Servicios De Logística De México,
  S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Servicios En Operaciones
  Logísticas, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					

 

131

 

	
  Servicios En Puertos Y
  Terminales, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Terminal Marítima De Tuxpan, S.A.
  De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tmg
  Overseas, S.A.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tmm
  Agencias, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					

 

132

 

	
  Tmm Logistics, S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Transportación Portuaria Terrestre,
  S.A. De C.V.,

  
	
  as Guarantor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Juan
  Fernandez Galeazzi

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

133

 

	
  The Bank
  Of New York,

  
	
  as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

134

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]