SC 13D

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GtLYwZDnzUP0uGJxY6WvITkEI1pzeY8unbQwsXaCw7uWNaIIXJgrJQFTkFHWXUZI QmOYH6+IOmGjuCk/l0+f1w== 0000950123-05-009908.txt : 20050815 0000950123-05-009908.hdr.sgml : 20050815 20050815060056 ACCESSION NUMBER: 0000950123-05-009908 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20050815 DATE AS OF CHANGE: 20050815 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KANSAS CITY SOUTHERN CENTRAL INDEX KEY: 0000054480 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 440663509 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-31194 FILM NUMBER: 051023433 BUSINESS ADDRESS: STREET 1: 427 W 12TH STREET CITY: KANSAS CITY STATE: MO ZIP: 64105 BUSINESS PHONE: 8169831303 MAIL ADDRESS: STREET 1: PO BOX 219335 CITY: KANSAS CITY STATE: MO ZIP: 64121 FORMER COMPANY: FORMER CONFORMED NAME: KANSAS CITY SOUTHERN INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GRUPO TMM SA CENTRAL INDEX KEY: 0001163560 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD SWITCHING & TERMINAL ESTABLISHMENTS [4013] IRS NUMBER: 000000000 STATE OF INCORPORATION: O5 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: AVENIDA DE LA CUSPIDE NO 4755 STREET 2: COLONIA PARQUES DEL PEDREGAL CITY: MEXICO CITY STATE: O5 ZIP: 14010 BUSINESS PHONE: 011525556298866 MAIL ADDRESS: STREET 1: AVENIDA DE LA CUSPIDE NO 4755 STREET 2: COLONIA PARQUES DEL PEDREGAL CITY: MEXICO CITY STATE: O5 ZIP: 14010 FORMER COMPANY: FORMER CONFORMED NAME: TMM GROUP DATE OF NAME CHANGE: 20011213 SC 13D 1 y11973sc13d.htm SCHEDULE 13D SC 13D

OMB APPROVAL

OMB Number: 3235-0145

Expires: December 31, 2005

Estimated average burden
hours per response...15

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Kansas City Southern

(Name of Issuer)

Common Stock, par value $0.01

(Title of Class of Securities)

485170 30 2

(CUSIP Number)

Thomas C. Janson, Esq.
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

April 1, 2005

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

TABLE OF CONTENTS


	Item 1. SECURITY AND ISSUER
	Item 2. IDENTITY AND BACKGROUND
	Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
	Item 4. PURPOSE OF TRANSACTION
	Item 5. INTEREST IN SECURITIES OF THE ISSUER
	ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
	ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
SIGNATURE
	Schedule A.
EX-1: STOCKHOLDERS' AGREEMENT
EX-2: SECURITY AGREEMENT

1. Name of Reporting Person:
Grupo TMM, S.A. I.R.S. Identification Nos. of above persons (entities only):

2. Check the Appropriate Box if a Member of a Group (See Instructions):

(a) o

(b) þ

3. SEC Use Only:

4. Source of Funds (See Instructions):
OO

5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

6. Citizenship or Place of Organization:
United Mexican States

Number of
Shares
Beneficially
Owned by
Each Reporting
Person With

7. Sole Voting Power:
-0-

8. Shared Voting Power:
18,000,000

9. Sole Dispositive Power:
18,000,000

10. Shared Dispositive Power:
-0-

11. Aggregate Amount Beneficially Owned by Each Reporting Person:
18,000,000

12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o

13. Percent of Class Represented by Amount in Row (11):
22.03%

14. Type of Reporting Person (See Instructions):
CO

Item 1. SECURITY AND ISSUER

This Statement relates to the Common Stock, par value $0.01 per share, of Kansas City Southern (“KCS”), a Delaware corporation, held by Grupo TMM, S.A. (“Grupo TMM”), a sociedad anónima organized under the laws of the United Mexican States (“Mexico”) (the “Subject Shares”). The principal executive offices of KCS are located at 427 West 12^th Street, Kansas City, MO 64105, United States.

Item 2. IDENTITY AND BACKGROUND

This Statement is filed by Grupo TMM with respect to itself and each of its executive officers, directors and control persons (the “Other Persons”). Grupo TMM, which maintains its principal executive offices at Avenida de la Cúspide, No. 4755, Colonia Parques del Pedregal, 14010 México, D.F., is a logistics and transportation services company offering an integrated network of transportation services in Mexico, including port management, freight distribution, specialized maritime operations, logistics operations and technology services.

Set forth on Schedule A hereto, which is incorporated herein by reference, is the name, citizenship, residence or business address and present principal occupation or employment of each of the Other Persons.

Neither Grupo TMM nor, to the best knowledge of Grupo TMM, any of the Other Persons, has been convicted in a criminal proceeding in the past five years (excluding traffic violations or similar misdemeanors).

During the past five years, neither Grupo TMM nor, to the best knowledge of Grupo TMM, any of the Other Persons, was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

Grupo TMM acquired beneficial ownership of 18,000,000 of the Subject Shares, representing approximately 22.0% of the issued and outstanding Common Stock of KCS, as follows: TMM Multimodal, S.A. de C.V. (“MM”), a sociedad anónima de capital variable organized under the laws of Mexico and a subsidiary of Grupo TMM, received the Subject Shares on April 1, 2005 as partial consideration for a transaction pursuant to which Grupo TMM caused MM to sell to KCS (the “TFM Sale”) MM’s interest in Grupo Transportaction Ferroviaria Mexicana, S.A. de C.V. (“GTFM”), a sociedad anónima de capital variable organized under the laws of Mexico and a subsidiary of MM, upon the terms and subject to the conditions set forth in that certain Amended and Restated Acquisition Agreement (the “Acquisition Agreement”), dated as of December 15, 2004, by and among KCS, Grupo TMM, KCS Sub, Inc., GTFM, MM and certain affiliates thereof. On April 1, 2005, immediately following the consummation of the

TFM Sale, MM transferred all of the Subject Shares it received in the TFM Sale to Grupo TMM, which presently holds such Subject Shares directly.

To the best knowledge of Grupo TMM, none of the Other Persons presently holds any Subject Shares.

Item 4. PURPOSE OF TRANSACTION

Grupo TMM acquired the Subject Shares pursuant to the TFM Sale described in Item 3 hereof. Grupo TMM effected the TFM Sale for the purposes of refocusing its operations on non-rail transportation services and strengthening its balance sheet. Subject to the terms and conditions set forth in the Stockholders’ Agreement (as described below), Grupo TMM may from time to time, in one or more transactions, sell some or all of its Subject Shares on the open market, in privately negotiated transactions or otherwise, including in hedging, swap, exchange or other derivative transactions (including through a transaction involving an exchange of securities that may be issued by Grupo TMM or its affiliates). There can be no assurance that any such disposition of shares will occur or any assurance as to the timing or method of any such disposition. All such dispositions must be made in compliance with the terms of the Stockholders’ Agreement and the Indenture (as defined below), which place certain restrictions on the ability of Grupo TMM to sell the Subject Shares. Pursuant to the terms of the Acquisition Agreement, additional amounts payable thereunder may be paid, at the option of KCS, through the delivery of additional shares of the Common Stock of KCS.

Except as set forth in this Item 4, Grupo TMM does not have any current plans or proposals which relate to or would result in any of the matters specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. Grupo TMM reserves the right to at any time change its present intention with respect to any or all of the matters referred to in this Item 4.

Item 5. INTEREST IN SECURITIES OF THE ISSUER

(a) Grupo TMM beneficially owns 18,000,000 of the Subject Shares, or 22.03% of the 81,707,000 shares of KCS’ Common Stock that KCS reported are issued and outstanding in its report on Form 8-K filed with the Securities and Exchange Commission on August 4, 2005.

(b) Grupo TMM has the shared power to vote or direct the vote. Grupo TMM has the sole power to dispose and to direct the disposition of the Shares of KCS, subject to certain limitations under the Stockholder's Agreement as described below.

(c) No transactions in the Shares of KCS were effected during the past sixty days by Grupo TMM or, to the best knowledge of Grupo TMM, any of the Other Persons.

(d) Not applicable.

(e) Not applicable.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Stockholders’ Agreement

In connection with the Subject Shares received as part of the consideration for the TFM Sale, Grupo TMM and certain of its subsidiaries and principal stockholders (the “Stockholder Parties”) entered into a Stockholders’ Agreement with KCS that contains provisions which, inter alia, (i) grant Grupo TMM preemptive rights with respect to future issuances of Common Stock by KCS enabling Grupo TMM to maintain its percentage interest in KCS, (ii) restrict certain transfers of the Subject Shares by the Stockholder Parties, (iii) limit certain activities aimed at influencing the control and management of KCS by the Stockholder Parties, (iv) obligate KCS to assist in a transaction to distribute the Subject Shares to Grupo TMM’s stockholders and (v) limit the circumstances under which Grupo TMM may pledge the Subject Shares.

Registration Rights Agreement

KCS entered into a Registration Rights Agreement with Grupo TMM and certain of its affiliates pursuant to which KCS agreed to register under the U.S. securities laws the Subject Shares. Pursuant to the Registration Rights Agreement, Grupo TMM has the right to demand that KCS file and have declared effective a total of six registration statements. The requests for registration may be made at any time after the six-month anniversary of the closing. One of the registrations may be a shelf registration that is required to be kept effective for a period of at least one year. Any of the registrations may be underwritten registrations and Grupo TMM has the right to select the underwriter, subject to the reasonable approval of KCS. In addition, Grupo TMM has unlimited piggy-back rights, subject to customary cut-back rights. The obligation of KCS to file any registration statement or to maintain its effectiveness is subject to typical holdback, delay and deferral provisions. KCS is required to pay all costs associated with the registration of the shares, but not any indemnity fees or commissions.

Consulting Agreement

José F. Serrano International Business, S.A. de C.V. (the “Consultant”) a consulting company organized by Sr. José Serrano Segovia, an executive officer and director of Grupo TMM, entered into a Consulting Agreement with KCS pursuant to which it will provide consulting services to KCS in connection with the portion of the business of KCS conducted in Mexico (with particular focus on the maintenance, fostering and promotion of a positive relationship between KCS and Mexican Government officials) for a period of three years. Consulting services will be provided exclusively in Mexico. As consideration for the services, the Consultant will receive an annual fee of $3,000,000 per year for a period of three years. The Consultant will be entitled to receive an additional fee of $9,000,000 payable in cash or shares of KCS common stock on the one hundred eightieth (180th) day following the final resolution certain outstanding legal disputes.

Indenture and Security Agreement

In connection with the issuance of its Senior Secured Notes due 2007 (the “Notes”), Grupo TMM, certain of its subsidiaries and The Bank of New York, as Trustee, entered into that certain Indenture (as amended, the “Indenture”), dated as of August 11, 2004. Pursuant to the terms of the Indenture, Grupo TMM was required, subject to the terms and conditions stated therein, to pledge (the “Pledge”) the Subject Shares received in connection with the Acquisition pursuant to a security agreement to secure its obligations under the Notes, the Indenture and certain collateral documents entered into in connection with the Indenture. In order to give effect to the foregoing, Grupo TMM and The Bank of New York, as Collateral Agent, entered into that certain Security Agreement (the “Security Agreement”), dated as of April 1, 2005. As a result of the implementation of the Pledge, Grupo TMM’s right to sell, assign, transfer or otherwise dispose of the Subject Shares is subject to certain limitations set forth in the Indenture and the Security Agreement.

ITEM 7. MATERIALS TO BE FILED AS EXHIBITS


Exhibit 1.		Stockholders’ Agreement, dated as of December 15, 2004, entered into by and among KCS, TMM, TMMH, MM and the Principal Stockholders identified therein.
Exhibit 2.		Security Agreement, dated as of April 1, 2005, entered into by and between Grupo TMM and The Bank of New York.
Exhibit 3.		Indenture, dated as of August 11, 2004, entered into by and among Grupo TMM, certain of its subsidiaries, and The Bank of New York, as Trustee, relating to Grupo TMM’s Senior Secured Notes due 2007 (incorporated herein by reference to Exhibit 4.26 of the Registration Statement on Form F-4 — Registration No. 333-112242).

SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Schedule 13D is true, complete and correct.

Dated as of this August 15, 2005.


		Grupo TMM, S.A.

		By: /s/ Juan Fernández Galeazzi

		Juan Fernández Galeazzi
		Director of Finance & Treasurer

Schedule A.



				# of KCS
			# of KCS	Shares that	Principal
Name	Business Address	Citizenship	Shares owned	can be voted	Occupation
José F. Serrano Segovia	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	Chairman of the Board & CEO
Ramón Serrano Segovia	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	Vice Chairman
Javier Segovia Serrano	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	President
José Luis Salas Cacho	Vancouver 159 Col. Vista Hermosa, Monterrey, N.L. 64620	Mexican	None	None	Private Investor
Ignacio Rodríguez Pullen	Pedro Antonio de los Santos No. 2-4 Col. San Miguel Chapultepec, México, D.F.11859	Mexican	None	None	Attorney
Lorenzo Cué Sánchez Navarro	Av. Chapultepec No. 230 4° Piso Col. Roma, México, D.F. 06700	Mexican	None	None	Private Investor
Robert Carl Rosenthal	650 From Road — 2nd Floor Paramus, NJ 07652 U.S.A.	U.S. Citizen	None	None	Global Head of Capital Markets, Maple Financial
José Serrano Cuevas	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	College Student
Gerardo Primo Ramírez	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	General Director, TMM Logistics
Horacio Reyes Guzmán	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	Corporate Administrative and Planning Director
Mario Mohar Ponce	Montes Himalaya 1010, Col. Lomas de Chapultepec, México D.F. 11000	Mexican	None	None	President, Grupo TFM
Ignacio Rodríguez Rocha	Pedro Antonio de los Santos No. 2-4 Col. San Miguel Chapultepec, México, D.F.11859	Mexican	None	None	Attorney
Antonio Cúe Sánchez Navarro	18400 Avalon Boulevard Suite. 500 Carlson California 90746	Mexican	None	None	Private Investor
Juan Pablo Mariño	650 From Road — 2nd Floor Paramus, NJ 07652 U.S.A.	U.S. Citizen	None	None	Director, Maple Trade and Finance Corp.
Juan Fernández Galeazzi	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	Finance Director and Treasurer
Brad Lee Skinner	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	U.S. Citizen	None	None	Senior Vice President
Elvira Ruiz Carreño	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	Corporate Audit Director
Silverio Di Costanzo Pérez	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	General Director, Specialized Maritime Transportation
Eduardo Solórzano Caraza	Av. de la Cúspide 4755, Col. Parques del Pedregal, México D.F. 14010	Mexican	None	None	General Director, Ports and Terminals

EX-1 2 y11973exv1.htm EX-1: STOCKHOLDERS' AGREEMENT EX-1

Exhibit 1

STOCKHOLDERS’ AGREEMENT

STOCKHOLDERS’ AGREEMENT dated as of December 15, 2004, but to become effective as herein provided, by and among Kansas City Southern, a Delaware corporation (“KCS”), Grupo TMM, S.A., a sociedad anónima organized under the laws of the United Mexican States (“UMS”) (“TMM”), TMM Holdings, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of the UMS and a subsidiary of TMM (“TMMH”), TMM Multimodal, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of the UMS and a subsidiary of TMMH) (“MM”), and the stockholders of TMM who have executed this Stockholders’ Agreement (collectively, the “Principal Stockholders”).

RECITALS

A. Pursuant to an Amended and Restated Acquisition Agreement (the “Acquisition Agreement”) dated the date hereof among KCS, certain subsidiaries of KCS, TMM, TMMH, and MM, KCS will acquire from MM all of the issued and outstanding capital stock of Grupo Transportación Ferroviaria Mexicana, S.A. de CV., a sociedad anónima de capital variable organized under the laws of the UMS (“GTFM”), held by MM and MM will receive from KCS shares of Common Stock of KCS;

B. Upon completion of the transactions contemplated by the Acquisition Agreement and the Ancillary Agreements, MM will become a significant stockholder of KCS, each of TMM, TMMH, MM and the Principal Stockholders will thereby obtain the opportunity to derive substantial economic benefits and one or more of the Principal Stockholders may become significant stockholders of KCS, and

C. The parties hereto (each, a “Party,” and collectively, the “Parties”) desire to set forth herein certain of their rights and duties arising out of and in connection with the Acquisition Agreement and the transactions contemplated thereby.

NOW, THEREFORE, in consideration of the recitals (which are deemed to be part of this Stockholders’ Agreement), the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article I.

REPRESENTATIONS AND WARRANTIES

1.1 Representations and Warranties of KCS. KCS represents and warrants to TMM, TMMH, MM and the Principal Stockholders that as of the Effective Date:

(a) The execution, delivery and performance by KCS of this Stockholders’ Agreement and the performance by KCS of its obligations hereunder are within its corporate powers and have been duly authorized by all necessary corporate action on its part. This Stockholders’ Agreement constitutes a legal, valid and binding agreement of KCS enforceable against KCS in accordance with its terms (i) except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now

or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity); and

(b) The execution, delivery and performance of this Stockholders’ Agreement by KCS does not (i) violate, conflict with or result in any breach of any provision of the charter or by-laws of KCS, (ii) violate, conflict with or result in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under, or permit the termination of, or require any notice under, or require the consent of any other party to, or result in the acceleration of, or entitle any party to accelerate (whether as a result of a change in control of KCS or otherwise) any obligation or agreement, or result in the loss of any benefit or the imposition of any fee or penalty, or give rise to the creation of any lien or encumbrance upon any of the properties or assets of KCS, under any of the terms, conditions or provisions of any debt, note, bond, mortgage, indenture, deed of trust, license, lease, permit, agreement or other instrument or obligation to which KCS is a party or by which KCS or any of its respective properties or assets may be bound or affected, or (iii) violate any Rules (including foreign, federal and state securities laws) of any Governmental Authority applicable to KCS or any of its properties, assets or operations.

1.2 Representations and Warranties of TMM, TMMH and MM. TMM, TMMH, and MM, each represents and warrants, jointly and severally, to KCS that as of the Effective Date:

(a) The execution, delivery and performance by each of TMM, TMMH and MM of this Stockholders’ Agreement and the performance by TMM, TMMH and MM of its obligations hereunder are within its corporate powers and have been duly authorized by all necessary corporate action on its part. This Stockholders’ Agreement constitutes a legal, valid and binding agreement of TMM, TMMH and MM enforceable against TMM, TMMH and MM in accordance with its terms (i) except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity);

(b) The execution, delivery and performance of this Stockholders’ Agreement by TMM, TMMH and MM does not (i) violate, conflict with or result in any breach of any provision of the respective charters or by-laws of TMM, TMMH or MM, (ii) violate, conflict with or result in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under, or permit the termination of, or require any notice under, or require the consent of any other party to, or result in the acceleration of, or entitle any party to accelerate (whether as a result of a change in control of MM or otherwise) any obligation or agreement, or result in the loss of any benefit or the

- 2 -

imposition of any fee or penalty, or give rise to the creation of any lien or encumbrance upon any of the properties or assets of TMM, TMMH or MM under any of the terms, conditions or provisions of any debt, note, bond, mortgage, indenture, deed of trust, license, lease, permit, agreement or other instrument or obligation to which MM or any of its subsidiaries is a party or by which TMM, TMMH, MM or any of their respective subsidiaries or any of their respective properties or assets may be bound or affected, or (iii) violate any Rules (including foreign, federal and state securities laws) of any Governmental Authority applicable to TMM, TMMH, MM or any of their respective subsidiaries, or any of their respective properties, assets or operations.

(c) Except for shares of Common Stock issuable pursuant to the Acquisition Agreement, neither TMM, TMMH, MM nor any of their respective controlled Affiliates is the beneficial owner of any Voting Securities of KCS.

(d) No insolvency proceedings against TMM or any of its Subsidiaries are pending.

1.3 Representations and Warranties of Principal Stockholders. Each of the Principal Stockholders represents and warrants, severally, to KCS as follows as of the Effective Date:

(a) Such Principal Stockholder is either (i) an entity that is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with full power and authority to enter into, execute and deliver this Stockholders’ Agreement and to perform and observe fully its obligations hereunder and to perform the transactions contemplated hereby, or (ii) a natural person who has the legal capacity to enter into this Stockholders’ Agreement and to consummate the transactions contemplated hereby. Such Principal Stockholder has taken all action required by law, such Person’s organizational or governing documents (if applicable), or otherwise to authorize the execution, delivery and performance of this Stockholders’ Agreement and the consummation by such Principal Stockholder of the transactions contemplated hereby. This Stockholders’ Agreement has been duly and validly executed and delivered by such Principal Stockholder and, assuming due authorization, execution and delivery by KCS, constitutes valid and binding legal obligations of such Principal Stockholder, enforceable against such Principal Stockholder in accordance with its terms (i) except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(b) The execution, delivery and performance of this Stockholders’ Agreement by such Principal Stockholder does not (i) violate, conflict with or result in any breach of any provision of the organizational or governing documents of any of such Principal Stockholder (if applicable), (ii) violate, conflict with or result in a violation or breach of,

- 3 -

or constitute a default (with or without due notice or lapse of time or both) under, or permit the termination of, or require any notice under, or require the consent of any other party to, or result in the acceleration of, or entitle any party to accelerate any obligation or agreement, or result in the loss of any benefit or the imposition of any fee or penalty, or give rise to the creation of any lien or encumbrance upon any of the respective properties or assets of TMM, TMMH or MM or any of their respective Affiliates or any of the Principal Stockholders, in each case under any of the terms, conditions or provisions of any debt, note, bond, mortgage, indenture, deed of trust, license, lease, permit, agreement or other instrument or obligation to which such Principal Stockholder is a party or by which they or any of their respective properties or assets may be bound or affected or (c) violate any Rules (including foreign, federal and state securities laws) of any Governmental Authority applicable to such Principal Stockholder or any of their respective properties, assets or operations; and

(c) Except for shares of Common Stock issuable pursuant to the Acquisition Agreement, neither such Principal Stockholder nor any controlled Affiliate of such Principal Stockholder is the beneficial owner of any Voting Securities of KCS.

(d) To the best of their knowledge, no insolvency proceedings against TMM or any of its Subsidiaries are pending.

Article II.

STANDSTILL PROVISIONS

2.1 Standstill Provisions. (a) TMM, TMMH, MM and each of the Principal Stockholders covenants to and agrees with KCS that, unless it is specifically invited in writing to do so by the Board of Directors, during the Standstill Period such Person will not, and will cause each of its Affiliates not to, directly or indirectly, alone, as part of a Group or in concert with others:

(i) acquire or agree to acquire (other than pursuant to the Acquisition Agreement, the Consulting Agreement, or this Agreement) beneficial ownership of any Voting Securities (or any direct or indirect rights or options to acquire (through purchase, exchange, conversion or otherwise) beneficial ownership of any Voting Securities), if after any such acquisition, such Person and its Affiliates, or such Group would beneficially own aggregate outstanding Voting Securities representing more than 20% of the Total Voting Power;

(ii) make any public announcement with respect to any acquisition or proposal by any TMM Holder, or any Group of which any TMM Holder is a member or acting in concert with, for the acquisition of Voting Securities with respect to any merger, consolidation or business combination involving KCS or its Affiliates or for or with respect to any purchase of a substantial portion of the

- 4 -

assets of KCS or its Affiliates, whether or not such proposal might require the making of a public announcement by KCS;

(iii) solicit, initiate, make, or in any way participate in, any “solicitation” of “proxies” to vote any Voting Securities or become a “participant” in any “election contest” (as such terms are defined or used in Regulation 14A under the Exchange Act, as such Regulation is currently in effect, disregarding clause (iv) of Rule 14a-l(l)(2) and including any exempt solicitation pursuant to Rule 14a-2(b)(l));

(iv) except as approved by the Board of Directors, call, or vote in favor of a call for, any special meeting of stockholders of KCS;

(v) initiate or propose any matter for submission to a vote of stockholders of KCS or participate in the making of, or solicit stockholders for the approval of, any stockholder proposal;

(vi) grant any proxy with respect to any Voting Securities to any Person not approved in writing by KCS, except for proxies granted to representatives of KCS in connection with the voting of shares at an annual or special meeting of stockholders or to a pledgee pursuant to a pledge that complies with Section 3.6 of this Agreement;

(vii) take any action which would be reasonably likely to require KCS to make a public announcement regarding any of the matters specified in this Section 2.l(a)(i)-(xi); or

(viii) initiate or participate in any negotiations or arrangements with any third party with respect to any of the foregoing, or provide any information or take any action designed to advise, assist, encourage or act in concert with any third party in connection with any of the foregoing;

(ix) disclose publicly any intention, plan or arrangement inconsistent with the foregoing;

(x) make any request in a public manner or that would require public disclosure, that KCS (or any of its officers, directors, representatives, employees, attorneys, advisors, agents or Affiliates) to waive, amend or modify any provisions of Section 2.1(a)(i)-(xi); or

(xi) otherwise act, alone or in concert with others, to seek to control or influence materially the management, Board of Directors or policies of KCS.

(b) TMM, TMMH, MM and each of the Principal Stockholders covenants to and agrees with KCS that such Person will promptly notify the Board of Directors of any serious inquiry from any third party regarding any of the matters specified in Section

- 5 -

2.1(a)(i)-(xi) (which notification shall include the identity of each such third party and the material terms and conditions of each such inquiry). The Parties acknowledge that any such inquiry made by a Competitor or a representative of a Competitor shall be regarded as a serious inquiry.

2.2 Effect of violations. If TMM, TMMH, MM, the Principal Stockholders or any of their respective Affiliates owns or acquires beneficial ownership of any Voting Securities of KCS in violation of Section 2.1(a)(i), none of TMM, TMMH, MM, the Principal Stockholders, nor any of their Affiliates shall be entitled to vote, or cause to be voted, any Voting Securities in excess of the greater of (i) the level owned immediately prior to the acquisition of Voting Securities that resulted in the violation and (ii) the level permitted to be owned by Section 2.1(a)(i), for any purposes (including, without limitation, with respect to a transaction of any type or for the election of directors) and shall be deemed thereby to have granted to any Person designated by the Board of Directors an irrevocable proxy to vote such securities in proportion to the votes cast by all other holders of Voting Securities of KCS on such matter; provided, that the right to vote such securities shall be reinstated, and such proxy shall be deemed to be revoked, upon the earlier of (i) any transfer of such securities other than to an Affiliate of the transferor and that is not otherwise in violation of this Stockholders’ Agreement and (ii) the first date on which the beneficial ownership of Voting Securities is reduced to the greater of (x) the level owned immediately prior to the acquisition of Voting Securities that resulted in the violation and (y) the level permitted by Section 2.1(a)(i). KCS shall (as specified in Section 9.11) be entitled to enforce specifically the terms of this Section 2.2 and may also pursue any other available remedy to which it may be entitled as a result of any violation of this Stockholders’ Agreement.

2.3 Termination. The rights and obligations under this Article II shall immediately and irrevocably terminate upon the earliest to occur of (i) a Change of Control of KCS, or (ii) the first date the TMM Holders beneficially own in the aggregate less than 15% of the outstanding Voting Securities of KCS for at least 30 consecutive days.

2.4 Section 203, Delaware General Corporation Law. The acquisition of Voting Securities of KCS by any of the TMM Holders pursuant to this Agreement, the Acquisition Agreement or the Consulting Agreement shall not be subject to Section 203 of the Delaware General Corporation Law (“Section 203”), but Section 203 shall remain applicable to any other acquisitions of Voting Securities by any of the TMM Holders.

Article III.

RESTRICTIONS ON TRANSFER

3.1 General restrictions on transfers. The TMM Holders shall not, directly or indirectly, alone or in concert with others, sell, assign, transfer, pledge, hypothecate, otherwise subject to any lien, grant any option with respect to or otherwise dispose of any interest in (or enter into an agreement or understanding with respect to the foregoing) any Voting Securities beneficially owned by them (a “Disposition”), except in accordance with the terms of this Stockholders’ Agreement.

- 6 -

3.2 Dispositions to Competitors.

(a) For a period of seven years after the Effective Date, the TMM Holders shall not, directly or indirectly, alone or in concert with others, effect a Disposition to a Competitor; provided that no Disposition pursuant to a Public Offering or a Rule 144 Transaction will be deemed to violate this prohibition if the selling TMM Holder(s) invoke and follow or require participating underwriters or brokers to invoke and follow, appropriate and reasonable procedures (subject to the prior approval of KCS, which shall not be unreasonably withheld) designed to prevent the sale of such Voting Securities to any Competitor. The Parties agree that a written representation from the purchaser or a representative of the purchaser shall satisfy the requirements of appropriate and reasonable procedures set forth in this Section 3.2(a) provided such representation authorizes reliance thereon by KCS and KCS has no reasonable grounds to believe that such representation cannot be relied upon to satisfy such requirements.

(b) After the earliest of (i) seven years following the Effective Date, or (ii) the first date on which the TMM Holders have beneficially owned in the aggregate, directly or indirectly and alone or as part of a Group, less than 15% of the outstanding Voting Securities of KCS for at least 30 consecutive days (such earlier time being referred to herein as the “ROFR Commencement Date”), any TMM Holder may sell Voting Securities to a Competitor so long as the procedures set forth in this Section 3.2(b) are followed. If after the ROFR Commencement Date the selling TMM Holder proposes to sell Voting Securities to a Competitor (it being agreed that no Disposition pursuant to a Public Offering or a Rule 144 Transaction will be deemed to give rise to this right of first refusal), then KCS shall have a right of first refusal. If such a Disposition to a Competitor is proposed, the selling TMM Holder shall deliver a written notice to KCS advising KCS of the number of Voting Securities such holder desires to sell and the bona fide terms, including price, of any such proposed transaction. KCS shall have the right (but not the obligation) to purchase, in whole but not in part, such Voting Securities at a per share cash purchase price equal to the cash purchase price, or on such other terms as provided, in the agreement between the selling TMM Holder and a Competitor. In order to exercise its purchase rights hereunder, KCS must deliver a written notice to the seller to such effect within 10 business days after receipt of written notice of the proposed sale. If KCS timely elects to purchase the Voting Securities specified in the notice, it shall complete the purchase within 60 days from the delivery of such notice, unless a longer time is required to secure any regulatory approvals, in which case the purchase shall occur on the second business day after the receipt of any such required approvals, which approvals shall be obtained as soon as practicable. Unless KCS exercises its right of first refusal by delivering written notice to the selling TMM Holder prior to the expiration of the offering period described above, the selling TMM Holder shall be entitled to sell such Voting Securities which KCS has not elected to purchase during the 120 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to KCS. Any Voting Securities not so sold by the selling TMM Holder during such 120 day period may not thereafter be sold unless again offered to KCS pursuant to the terms of this provision. This purchase right shall be assignable, in whole

- 7 -

or in part, by KCS to any other Person, but no such assignment shall relieve KCS of its obligation to assure payment of the purchase price for any Voting Securities as to which a notice of election to exercise the right of first refusal is made by KCS or any such assignee.

3.3 Dispositions to Affiliates. For a period of seven years after the Effective Date, each of the TMM Holders shall not, directly or indirectly, alone or in concert with others, effect a Disposition of Voting Securities to any Affiliate of TMM, TMMH, or MM or any Affiliate of any Principal Stockholders unless such Affiliate agrees in writing to be bound by the terms of this Stockholders’ Agreement and provided that the TMM Holders shall remain responsible, jointly and severally, for any breaches of this Stockholders’ Agreement by such Affiliate (provided that any TMM Holder which is a Principal Stockholder shall be severally responsible only for breaches by an Affiliate of the Principal Stockholder to which such Principal Stockholder effects a Disposition).

3.4 Dispositions to Certain Holders. Subject to the provisions of Sections 3.2 and 3.3, the TMM Holders may make a Disposition of any or all Voting Securities beneficially owned by such Person, provided that:

(a) No Disposition (whether in a single transaction or series of transactions) that in the aggregate represents 5% or more of the outstanding Voting Securities shall be made to any Person (other than a Permitted Underwriter or an Affiliate pursuant to and in accordance with Section 3.3) other than a Person who is eligible to file reports pursuant to Rule 13d-l under the Exchange Act (a “13G Filer”), unless such Person would not be so eligible with respect to the Voting Securities acquired from the Disposition; and

(b) No Disposition (whether in a single transaction or series of transactions) of Voting Securities that in the aggregate represents 5% or more of the outstanding Voting Securities shall be made to any 13G Filer unless:

(i) such 13G Filer would continue to be eligible to file reports pursuant to Section 13(g) under the Exchange Act with respect to the Voting Securities after giving effect to the proposed acquisition of such Voting Securities; and

(ii) the selling TMM Holder shall have delivered a written notice to KCS advising KCS of the number of Voting Securities the seller desires to sell and the terms, including price, of the proposed transaction and KCS has been provided the right (but not the obligation) to purchase, in whole or in part, such Voting Securities at a per share cash purchase price equal to the purchase price, or upon such other terms as provided, in the proposed transaction. In order to exercise its purchase rights hereunder, KCS must deliver a written notice to the seller to such effect within five business days after receipt of written notice of the proposed sale. Upon the expiration of the offering period described above, the selling TMM Holder shall be entitled to sell such Voting Securities which KCS

- 8 -

has not elected to purchase during the 120 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to KCS. Any Voting Securities not so sold by the selling TMM Holder during such 120 day period may not thereafter be sold unless again offered to KCS pursuant to the terms of this provision. This purchase right shall be assignable, in whole or in part, by KCS to any other Person, but no such assignment shall relieve KCS of its obligation to assure payment of the purchase price for any Voting Securities as to which KCS has delivered such a written notice.

(c) Notwithstanding the provisions of Section 3.4(a) and (b), no Disposition (whether in a single transaction or a series of transactions) shall be made to any Person or Group that would, together with such Person’s Affiliates and Associates and after giving effect to the acquisition of such Voting Securities, beneficially own or have the right to acquire more than 15% of the Total Voting Power.

3.5 Dispositions of Holders of Voting Securities. For a period of seven years after the Effective Date, no TMM Holder shall, directly or indirectly, alone or in concert with others, sell, assign, transfer, pledge, hypothecate, otherwise subject to any lien, grant any option with respect to or otherwise dispose of any interest in (or enter into an agreement or understanding with respect to the foregoing) any capital stock or Voting Securities or control of any Person that, directly or indirectly, beneficially owns any Voting Securities of KCS to a Competitor, except as permitted by Section 3.3.

3.6 Pledges. Subject to the provisions contained herein, a TMM Holder may pledge or hypothecate as security for any indebtedness or other obligations any or all Voting Securities beneficially owned by such Person provided that such TMM Holder obtains prior to such pledge or hypothecation written consent from the pledgee that upon the occurrence of an event which gives the pledgee the right to foreclose on the pledged Voting Securities (“Foreclosure Event”) such pledgee shall provide to KCS prompt written notice of such Foreclosure Event and provide KCS the right to purchase such Voting Securities at a cash purchase price equal to the average closing price of KCS’s Common Stock on the New York Stock Exchange over the five consecutive trading days preceding the date of receipt of the notice of the pending foreclosure sale. In order to exercise its purchase rights hereunder, KCS must deliver a written notice to the pledgee to such effect within five business days after receipt of written notice of the Foreclosure Event and complete such purchase within 60 days from the delivery of such notice unless a longer time is required to secure any regulatory approvals, in which case the purchase shall occur on the second business day after the receipt of any such required approvals. This purchase right shall be assignable, in whole or in part, by KCS to any other Person, but no such assignment shall relieve KCS of its obligation to assure payment of the purchase price for any Voting Securities as to which KCS has delivered such a written notice.

3.7 Effect of Non-Compliance. Any attempted Disposition of any Voting Securities in violation of any provision of this Stockholders’ Agreement shall be void, and KCS shall not record such Disposition on its books or treat any purported transferee of such Voting Securities

- 9 -

as the owner of such shares for any purpose, including without limitation, voting, receiving dividends or other distributions and being entitled to any of the benefits of this Stockholders’ Agreement.

3.8 Permitted Dispositions in Connection with Certain Transactions. Notwithstanding the provisions of this Article III, the TMM Holders shall be permitted to make a Disposition in connection with any tender or exchange offer made by an unaffiliated third party to acquire KCS Common Stock so long as the following conditions are satisfied (i) the TMM Holders are in compliance with the provisions of Section 2.1 (a) with respect to such tender or exchange offer; (ii) such tender or exchange offer must be for all of the outstanding Voting Securities; (iii) the offerer shall have made a commitment to effect a merger after the completion of the tender or exchange offer to provide the same consideration being provided to the holders of the securities tendered in the tender offer; (iv) the holders of a majority of the Voting Securities of KCS, other than the Voting Securities beneficially owned by the TMM Holders, shall have tendered their Voting Securities pursuant to such tender or exchange offer and such Voting Securities shall not have been withdrawn; (v) such tender or exchange offer shall not be subject to any financing condition; and (vi) the TMM Holders may not tender, or publicly disclose their intention to tender, prior to the business day immediately preceding the scheduled expiration of the tender or exchange offer.

3.9 Termination. Except for Section 3.2(b) (which shall survive indefinitely), the rights and obligations under this Article III shall immediately and irrevocably terminate:

(i) on the first date the TMM Holders beneficially own in the aggregate less than 15% of the outstanding Voting Securities of KCS for at least 30 consecutive days; or

(ii) a Change of Control of KCS.

Article IV.

PRE-EMPTIVE RIGHTS

4.1 Pre-Emptive Rights.

(a) Subject to Section 4.1(d) below, except for issuances of Common Stock (including for this purpose, options, warrants and other securities convertible into or exercisable for Common Stock) issued:

(i) to KCS’s employees, directors, consultants, agents, independent contractors or other service providers in connection with a Plan existing on the date hereof or a Plan approved by the Board of Directors and adopted by KCS after the date hereof;

(ii) upon the exercise of any options, warrants, convertible or exchangeable securities which are outstanding as of the date hereof;

- 10 -

(iii) in connection with the acquisition (by merger, consolidation, acquisition of assets or equity interests or otherwise) of the equity interests or assets of another Person; or

(iv) issued pursuant to the Acquisition Agreement, the Ancillary Agreements, or the Consulting Agreement;

if KCS authorizes the issuance or sale of any shares of Common Stock or any securities containing options or rights to acquire any shares of Common Stock (other than as a dividend on the outstanding Common Stock), KCS shall first notify TMM Holders of such proposed transaction and offer to sell to each such Person a number of shares of Common Stock (or, as applicable, options, warrants or other securities convertible into or exercisable for Common Stock) equal to the product obtained by multiplying the number of shares of Common Stock or securities containing options or rights to acquire Common Stock authorized to be sold by KCS by a fraction, (1) the numerator of which is the number of shares of Common Stock owned by such Person and (2) the denominator of which is the total of all then-outstanding Voting Securities. Each TMM Holder shall be entitled to purchase such Common Stock (or, as applicable, options, warrants or other securities convertible into or exercisable for Common Stock) at the same price and on the same terms and conditions as such Common Stock (or, as applicable, options, warrants or other securities convertible into or exercisable for Common Stock) are to be offered to any other Persons. To the extent that any TMM Holder elects not to participate in such pre-emptive rights, each of the other TMM Holders shall have a prorata right to purchase at the same price and on the same terms and conditions the Voting Securities which such non-participating TMM Holder had the right but elected not to purchase; provided that the exercise of such right does not extend the time for written notice set forth in Section 4.1(b). The purchase price for all stock and securities offered to such TMM Holders shall be payable in cash or, to the extent that other payment is to be made by the other Persons to whom stock or securities are so offered, on such other payment terms.

(b) In order to exercise its purchase rights hereunder, a TMM Holder must deliver a written notice to KCS to such effect within ten business days after receipt of written notice from KCS describing in reasonable detail the stock or securities being offered, the purchase price thereof, the payment terms, such holder’s percentage allotment, and the number of shares of Common Stock (or, as applicable, options, warrants or other securities convertible into or exercisable for Common Stock) such holder has the right to purchase hereunder.

(c) Upon the expiration of the offering period described above, KCS shall be entitled to sell such stock or securities which such TMM Holders have not elected to purchase during the 120 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to such TMM Holders. Any stock or securities not so sold by KCS during such 120 day period may not thereafter be sold unless again offered to the TMM Holders pursuant to the terms of this Article IV.

- 11 -

(d) The rights of the TMM Holders under this Article IV shall immediately and irrevocably terminate on the earlier to occur of (i) the date that the TMM Holders do not beneficially own in the aggregate at least 40% of the Voting Securities initially acquired by MM pursuant to the Acquisition Agreement; or (ii) the date that is three (3) years following the date hereof.

Article V.

VOTING AGREEMENT

5.1 Voting Agreement. From and after the Effective Date and until the provisions of this Article V cease to be effective, each TMM Holder shall vote all of the Voting Securities beneficially owned by such Person and entitled to vote in the election of directors (i) in favor of all Persons nominated by the Nominating Committee for election as a member of the Board of Directors by the holders of Common Stock; and (ii) against any proposal to remove any director nominated by the Nominating Committee and elected to the Board of Directors by the holders of Common Stock; and each such holder shall take all other reasonably necessary or desirable actions within its control (including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings) to cause such actions to be taken.

Article VI.

EFFECTIVE DATE

6.1 This Stockholders’ Agreement shall become effective on and as of the Closing Date provided for in the Acquisition Agreement (“Effective Date”).

Article VII.

TERMINATION

7.1 Termination. Subject to Section 7.2, this Stockholders’ Agreement, except to the extent earlier termination is expressly provided for herein, shall terminate on the earliest to occur of:

(a) the first date the TMM Holders and their Affiliates shall have, for at least 30 consecutive days, beneficially owned in the aggregate less than 40% of the Voting Securities initially acquired by MM pursuant to the Merger contemplated by the Acquisition Agreement; and

(b) the termination of this Stockholders’ Agreement in a writing signed by each of the parties hereto and approved by the Board of Directors.

- 12 -

7.2 Effect of Termination. If this Stockholders’ Agreement is terminated in accordance with Section 7.1, hereof, this Stockholders’ Agreement shall become null and void and of no further force and effect, except that (a) the terms and provisions of this Section 7.2, Section 2.2, and Sections 3.2(b), 3.7, and 3.8 shall remain in full force and effect, and as long as such Sections remain in effect Articles 8 and 9 shall remain in full force and effect, and (b) any termination of this Stockholders’ Agreement shall not relieve any Party hereto from any liability for any breach of its obligations hereunder, regardless of whether such Party terminated this Stockholders’ Agreement.

- 13 -

Article VIII.

DEFINITIONS

8.1 Defined Terms. As used in this Stockholders’ Agreement, the following terms shall have the following meanings (unless indicated otherwise, all Article and Section references are to Articles and Sections of this Stockholders’ Agreement):

“13G Filer ” shall have the meaning assigned to such term in Section 3.4(d) of this Stockholders’ Agreement.

“Acquisition Agreement” shall have the meaning set forth in Recital A of this Stockholders’ Agreement.

“Affiliate” shall mean, with respect to any Person, (i) any other Person directly or indirectly through one or more intermediaries controlling or controlled by, or under direct or indirect common control with, such specified Person; (ii) any other Person that owns, directly or indirectly, ten percent or more of such Person’s capital stock or other equity interests or any officer or director of any such Person or other Person or, (iii) with respect to any natural Person, any person having a relationship with such Person by blood, marriage or adoption not more remote than first cousin; provided, however, that for the purposes of this Stockholders’ Agreement, (w) KCS and its subsidiaries and Affiliates shall not be deemed Affiliates of TMM, TMMH, MM or any of their respective subsidiaries and (x) TMM, TMMH, MM and any of their respective subsidiaries and Affiliates shall not be deemed Affiliates of KCS and its subsidiaries. For purposes hereof, (y) a “subsidiary” of a Person shall mean any other Person more than 50% of the outstanding Voting Securities of which are owned, directly or indirectly, by such Person and (z) “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” shall have correlative meanings.

“Ancillary Agreements” shall have the meaning assigned to such term in the Acquisition Agreement.

“Applicable Law” shall mean any Law applicable to KCS, TMM, TMMH, MM or any of their respective Affiliates, properties, assets, officers, directors, employees or agents, as the case may be.

“Arbitration Costs” shall have the meaning assigned to such term in Section 9.12(d)(iii) of this Stockholders’ Agreement.

“Arbitrators” shall have the meaning assigned to such term in Section 9.12(d)(i) of this Stockholders’ Agreement.

“Associate” shall have the meaning set forth in Rule 12b-2 under the Exchange Act.

- 14 -

“beneficial ownership” shall be determined pursuant to Rule 13d-3 of the Exchange Act or, if Rule 13d-3 shall be rescinded and there shall be no successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in effect on the date hereof; provided, that Voting Securities issued or issuable pursuant to the Consulting Agreement shall not be counted for purposes of Section 2.l(a)(i).

“Board of Directors” shall mean the board of directors of KCS.

“Change of Control” shall mean, with respect to such Person, the occurrence of any of the following: (a) any Person or Group, other than a subsidiary or any employee benefit plan (or any related trust) of such Person or a subsidiary of such Person, becomes the beneficial owner of 20% or more of the Voting Securities representing 20% or more of the combined Total Voting Power of all Voting Securities of such Person, except that (1) no such Person or Group shall be deemed to beneficially own any securities held by such Person or a subsidiary or any employee benefit plan (or any related trust) of such Person or a subsidiary, or (2) no Person who or which, together with all Affiliates of such Person, was the beneficial owner of Voting Securities representing 20% or more of the combined Total Voting Power of all Voting Securities of such Person issued and outstanding as of the Effective Time of the Merger, as defined in the Acquisition Agreement shall be deemed as a result thereof to have caused a Change of Control of such Person hereunder; provided, however, that if such Person or any of its Affiliates, after the Effective Time, as defined in the Acquisition Agreement, of the Merger (A) acquires, in one or more transactions, beneficial ownership of an additional number of Voting Securities which exceeds 5% of the then-outstanding Voting Securities or Total Voting Power and (B) beneficially owns after such acquisition Voting Securities representing 20% or more of the combined Total Voting Power of all Voting Securities of such Person, then such Person shall be deemed to have caused a Change of Control hereunder; or (b) within a period of 24 months or less, the individuals who, as of any date, constitute the board of directors of such Person (the “Incumbent Directors”) cease for any reason to constitute at least 75% of the members of such board of directors unless at the end of such period, at least 75% of the individuals then constituting such board of directors were either Incumbent Directors or nominated upon the recommendation of at least 75% of the Incumbent Directors or other directors so nominated; or (c) approval by the stockholders of such Person of any of the following: (1) a merger, reorganization or consolidation (“Acquisition”) with respect to which the individuals and entities who were the respective beneficial owners of the stock and Voting Securities of the Person immediately before such Acquisition do not, after such Acquisition, beneficially own, directly or indirectly, more than 80% of, respectively, the common stock and the combined voting power of the Voting Securities of the Person resulting from such Acquisition in substantially the same proportion as their ownership immediately before such Acquisition, (2) a liquidation or dissolution of such Person, or (3) the sale or other disposition of all or substantially all of the assets of such Person.

“Closing Date” shall have the meaning assigned to such term in the Acquisition Agreement.

- 15 -

“Common Stock” shall mean the common stock, par value $.01 per share, of KCS, as set forth in the Restated Certificate of Incorporation of KCS.

“Competitor” shall mean Canadian National Railway, Canadian Pacific Railway Company, Union Pacific Corporation, Burlington Northern Santa Fe Corporation, CSX Corporation, Norfolk Southern Corp., Ferrocarril Mexicano, S.A. de C.V., Ferrocarril del Sureste, S.A. de C.V., Grupo Mexico, S.A. de C.V., the Anschutz Corporation, Carlos Slim Helu, and any other Person who operates a railroad in the United States, Mexico or Canada after the date hereof which, if operated in the United States would be regarded as a Class I railroad, and any of their respective successors or Affiliates.

“Consulting Agreement” shall mean the agreement between KCS and Consulting Firm referred to in the Acquisition Agreement.

“Disposition” shall have the meaning assigned to such term in Section 3.1 of this Stockholders’ Agreement.

“Dispute Notice” shall have the meaning assigned to such term in Section 9.12(c) of this Stockholders’ Agreement.

“Dispute Party” and “Dispute Parties” shall have the meaning assigned to such terms in Section 9.12(a) of this Stockholders’ Agreement.

“Disputes” shall have the meaning assigned to such term in Section 9.12(a) of this Stockholders’ Agreement.

“Effective Date” shall have the meaning assigned to such term in Section 6.1 of this Stockholders’ Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

“Foreclosure Event” shall have the meaning assigned to such term in Section 3.6 of this Stockholders’ Agreement.

“Governmental Authority” shall mean any United States, Mexican or foreign government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the SEC or any other United States, Mexican or foreign government authority, agency, department, board, commission or instrumentality of the United States, any state of the United States or any political subdivision thereof or any foreign jurisdiction, and any court, tribunal or arbitrator(s) of competent jurisdiction, and any United States, Mexican or foreign governmental or non-governmental self-regulatory organization, agency or authority (including the New York Stock Exchange).

“Group” shall have the meaning specified in Section 13(d)(3) of the Exchange Act.

- 16 -

“Law” shall mean any U.S., Mexican or foreign federal, state or local statute, law (whether statutory or common law), ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree, policy, guideline or other requirement or arbitration award or finding (including, without limitation, those of the New York Stock Exchange or any other applicable self-regulatory organization).

“Merger” shall have the meaning assigned to such term in the Acquisition Agreement.

“Nominating Committee” shall mean the Nominating Committee of the Board of Directors.

“Parties” and “Party” shall have the meaning assigned to such term in Recital C of this Stockholders’ Agreement.

“Permitted Underwriter” shall mean any underwriter who is in the business of underwriting securities and who, in the ordinary course of its business as an underwriter, acquires Voting Securities in connection with a public offering with the bona fide intention of reselling all of the Voting Securities so acquired pursuant to such public offering.

“Person” shall mean any individual, firm, corporation, partnership (limited or general) limited liability company, joint venture organization, or other entity and shall include any group comprised of any Person and any other Person with whom such Person or an Affiliate of such Person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of any shares of Voting Securities.

“Plan” shall mean each bonus, pension, stock option, stock purchase, stock bonus, benefit, profit sharing, retirement, severance, incentive, deferred compensation and other similar employee benefit plans, funds, programs or arrangements, all employment contracts or executive compensation agreements, written or oral, and all collective bargaining agreements, each other “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) and each other superannuation and similar schemes, in each of the foregoing cases which cover, are maintained for the benefit of, or relate to any or all employees (regardless whether such employees’ regular place of employment is within or without the United States) or terminated employees of KCS or any subsidiary or Affiliate.

“Public Offering” shall mean an underwritten public offering of securities of KCS pursuant to an effective registration statement under the Securities Act or such other public offering pursuant to an effective registration statement under the Securities Act effecting a broad distribution of the Voting Securities offered.

“Registration Rights Agreement” shall mean the Registration Rights Agreement, dated the date hereof, by and among KCS, TMM, TMMH, MM and the Principal Stockholders.

“Rights Agreement” shall have the meaning assigned to such term in Section 2.3 of this Stockholders’ Agreement.

- 17 -

“ROFR Commencement Date” shall have the meaning assigned to such term in Section 3.2(b) of this Stockholders’ Agreement.

“Rules” shall mean any federal, state, local or foreign statute, law, code, ordinance, rule, regulation, judgment, writ, decree, injunction, order, concession, grant, franchise, permit or license or other governmental or regulatory authorization, consent or approval applicable to TMM, TMMH, MM or any of the Principal Stockholders or any of their respective assets, properties, operations or Plans, in each case as applicable.

“Rule 144 Transaction” shall mean sale(s) of Common Stock made in accordance with the provisions of Rule 144 under the Securities Act, as currently in effect, including the brokers’ transaction, volume and manner of sale provisions thereof.

“SEC” shall mean the United States Securities and Exchange Commission and any successor thereto.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.

“Standstill Period” shall mean the period commencing on the Effective Date and ending on the date seven years after the Effective Date.

“TFM” shall mean TFM, S.A. de C.V.

“TMM Holders” shall mean, at any date, each of TMM, TMMH, MM, the Principal Stockholders, and any of their respective Affiliates who are then holders of Common Stock.

“Total Voting Power” shall mean, at any date, the total number of votes that may be cast in the election of directors of KCS (including all outstanding shares of Common Stock) at any meeting of stockholders of KCS held on such date assuming all Voting Securities then entitled to vote at such meeting were present and voted at such meeting, other than votes that may be cast only upon the happening of a contingency.

“Voting Securities” shall mean any securities of KCS (unless the context specifically contemplates another issuer) which are entitled to vote generally in the election of directors without regard to any event or occurrence (including, without limitation, the Common Stock), and any other securities by their terms convertible into or exercisable or exchangeable for such securities (whether or not any event or occurrence required to occur prior to such conversion, exercise or exchange shall have occurred).

Article IX.

MISCELLANEOUS

9.1 Amendments; Waiver. This Stockholders’ Agreement may not be amended, altered or modified except by written instrument executed by KCS and TMM. KCS and TMM

- 18 -

may amend this Stockholders’ Agreement without notice to or the consent of any third party. Any agreement on the part of KCS and TMM to waive (i) any inaccuracies in any representation and warranty contained herein or in any document, certificate or writing delivered pursuant hereto, or (ii) compliance with any of the agreements, covenants or conditions contained herein, shall be valid only if set forth in an instrument in writing signed on behalf of the Party against whom the waiver is to be effective. No such waiver shall constitute a waiver of, or estoppel with respect to, any subsequent or other inaccuracy, breach or failure to strictly comply with the provisions of this Stockholders’ Agreement. Any delay or omission on the part of KCS or TMM to exercise any right hereunder shall not in any manner impair the exercise of any right accruing to it hereafter.

9.2 Entire Agreement. This Agreement constitutes the entire agreement of the Parties, except as provided herein, and supersedes all prior agreements and understandings, written and oral, among the Parties with respect to the subject matter hereof.

9.3 Interpretation. This Stockholders’ Agreement is in the English language. The Parties waive any rights they may have under Applicable Law to have this Stockholders’ Agreement made in any language other than English; provided to the extent that any such waiver shall not be valid under Applicable Law, the Parties agree that in case of any ambiguity or contradiction between the English language version of this Stockholders’ Agreement and any translation into any other language, that the English language version shall control.

9.4 Severability. Any term or provision of this Stockholders’ Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Stockholders’ Agreement or affecting the validity or enforceability of any of the terms or provisions of this Stockholders’ Agreement in any other jurisdiction. If any provision of this Stockholders’ Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

9.5 Notices. Unless otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed given if (a) delivered in person, (b) transmitted by facsimile (with written confirmation), (c) mailed by certified or registered mail (return receipt requested) (in which case such notice shall be deemed given on the third day after such mailing) or (d) delivered by an express courier (with written confirmation) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

If to TMM, TMMH, MM or the Principal Stockholders:

Grupo TMM, S.A.
Avenida de la Cuspide, No. 4755
Colonia Parques del Pedregal
14010 Mexico, D.F.

- 19 -

CT Corporation
1209 Orange Street
Wilmington, Delaware 19801

With a copy (which shall not constitute notice) to:

Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Attention: Thomas C. Janson

If to KCS:

Kansas City Southern
P.O. Box 219335
427 West 12^th Street
Kansas City, MO 64121-9335
Attention: President

With a copy (which shall not constitute notice) to:

Sonnenschein Nath & Rosenthal LLP
4520 Main Street, Suite 1100
Kansas City, MO 64111
Attention: John F. Marvin, Esq.

Any Party hereto may from time to time change its address for notices under this Section 9.5 by giving at least 10 days’ notice of such changed address to the other Parties hereto.

9.6 Headings. The headings herein are for convenience only, do not constitute a part of this Stockholders’ Agreement and shall not be deemed to limit or affect any of the provisions of this Stockholders’ Agreement.

9.7 Binding Effect; Persons Benefiting; No Assignment. This Stockholders’ Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns (including transferees of Voting Securities). No provision of this Stockholders’ Agreement is intended or shall be construed to confer upon any entity or Person other than the Parties and their respective successors and permitted assigns any right, remedy or claim under or by reason of this Stockholders’ Agreement or any part hereof. This Stockholders’ Agreement may not be assigned by any of the Parties without the prior written consent of the other Parties.

9.8 Restrictive Legend. A copy of this Stockholders’ Agreement shall be filed with the Secretary of KCS and kept with the records of KCS. Upon original issuance thereof and until such time as the same is no longer required hereunder or under any Applicable Law, any

- 20 -

certificate issued representing any shares of Common Stock issued to any of the TMM Holders and all certificates issued upon transfer (except for transfers in accordance with Section 3.3) or in exchange or substitution therefor in accordance with this Stockholders’ Agreement shall bear the following restrictive legend:

THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF (“TRANSFERRED”) UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNLESS SUCH TRANSFER IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT.

THE TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE STOCKHOLDERS’ AGREEMENT, DATED DECEMBER 15, 2004, BETWEEN KCS AND CERTAIN STOCKHOLDERS, AS FROM TIME TO TIME IN EFFECT, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF KCS AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST TO KCS. NO SUCH TRANSFER WILL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SUCH STOCKHOLDERS’ AGREEMENT HAVE BEEN COMPLIED WITH IN FULL AND NO PERSON MAY REQUEST KCS TO RECORD THE TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION OF SUCH STOCKHOLDERS’ AGREEMENT.

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING PROVIDED FOR IN THE STOCKHOLDERS’ AGREEMENT AND NO VOTE OF SUCH SHARES THAT CONTRAVENES SUCH AGREEMENT SHALL BE EFFECTIVE.

The certificates representing Voting Securities beneficially owned by the TMM Holders (including, without limitation, all certificates issued upon transfer or in exchange thereof or substitution therefor in accordance with this Stockholders’ Agreement) shall also bear any legend required under any other applicable laws, including state securities or blue sky laws. KCS may make a notation on its records or give instructions to any transfer agents or registrars for such shares in order to implement the restrictions on transfer set forth in this Stockholders’ Agreement. KCS shall not incur any liability for any refusal or delay in recognizing any transfer of Voting Securities if KCS in good faith reasonably believes that such transfer may have been or would be in violation of the provisions of applicable law or this Stockholders’ Agreement.

9.9 No Third Party Beneficiaries. This Stockholders’ Agreement is intended for the benefit of the Parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision of this Stockholders’ Agreement be enforced by, any other Person.

9.10 Counterparts. This Stockholders’ Agreement may be executed in two or more counterparts, each original or facsimile of which shall be deemed an original, but all of which

- 21 -

taken together shall constitute one and the same agreement, it being understood that all of the Parties need not sign the same counterpart.

9.11 Specific Enforcement. The Parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Stockholders’ Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each of the Parties hereto shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Stockholders’ Agreement by the other and to enforce specifically the terms and provisions of this Stockholders’ Agreement, this being in addition to any other remedy to which they may be entitled by law or equity.

9.12 Governing Law; Dispute Resolution.

(a) Resolution of any and all disputes between KCS, on the one hand, and one or more of TMM, TMMH, MM, the Principal Stockholders, and any of their respective Affiliates on the other hand, (each of KCS, on the one hand, and TMM, TMMH, MM, the Principal Stockholders, or any of their respective Affiliates, on the other hand, a “Dispute Party” and, both of KCS, on the one hand, and TMM, TMMH, MM, the Principal Stockholders, or any of their respective Affiliates, on the other hand, the “Dispute Parties”) arising from or in connection with this Stockholders’ Agreement or any transactions contemplated by this Stockholders’ Agreement, whether based on contract, tort, common law, equity, statute, regulation, order or otherwise, (“Disputes”), including Disputes arising in connection with claims by third Persons, shall be exclusively governed by and settled in accordance with the provisions of this Section 9.12; provided, that the foregoing shall not preclude equitable or other judicial relief to enforce the provisions hereof or to preserve the status quo pending resolution of Disputes hereunder.

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

(c) As to any Dispute which is not resolved in the ordinary course of business, the Dispute Parties shall first attempt in good faith to promptly resolve any Dispute by negotiations between executives. Either of the Dispute Parties may initiate this procedure by delivery of written notice of the Dispute (the “Dispute Notice”) to the other. Not later than 20 days after delivery of the Dispute Notice, one executive of one of the Dispute Parties with authority to settle the Dispute shall meet with one executive of the other Dispute Party with authority to settle the Dispute at a reasonably acceptable time and place, and thereafter as such executives shall deem reasonably necessary. The executives shall exchange relevant information and endeavor to resolve the Dispute. Prior to any such meeting, each Dispute Party’s executive shall advise the other as to any individuals who will attend such meeting with the executive. All negotiations pursuant to this Section 9.12(c) shall be confidential and shall be treated as compromise

- 22 -

negotiations for purposes of Rule 408 of the Federal Rules of Evidence and similarly under other local or foreign rules of evidence.

(d) Each Dispute Party hereby agrees to submit all Disputes not resolved pursuant to Section 9.12(c) hereof to final and binding arbitration in New York, New York. Either Dispute Party may initiate such arbitration by delivery of a demand therefor (the “Arbitration Demand”) to the other Dispute Party not sooner than 60 days after the date of delivery of the Dispute Notice but promptly thereafter; provided, that if a Dispute Party rejects participation in the procedures provided under Section 9.12(c), the other Dispute Party may initiate arbitration at such earlier time as such rejection shall become reasonably apparent, and, whenever arbitration is initiated, may seek recovery of any damages or expenses arising from such rejection, including attorney’s fees and expenses, and Arbitration Costs (as defined below) in connection with arbitration hereunder.

(i) Three Arbitrators shall be appointed (the “Arbitrators”), one of whom shall be appointed by KCS, one by TMM, and the third of whom, who shall act as the chairman of the arbitral tribunal, shall be appointed by the first two Arbitrators within 10 business days of the first two Arbitrators confirmation by the American Arbitration Association. Each Party agrees that the TMM Holders shall be considered jointly as one side for the purposes of constitution of the arbitration tribunal hereunder. If either Dispute Party fails to appoint an Arbitrator within 10 business days of a request in writing by the other Dispute Party to do so or if the first two Arbitrators cannot agree on the appointment of the third Arbitrator within 10 business days of their confirmation by the American Arbitration Association, then such Arbitrator shall be appointed by the American Arbitration Association in accordance with its Commercial Arbitration Rules. As soon as the arbitration tribunal has been convened, a hearing date shall be set within 15 days thereafter; provided, that the Arbitrators may extend the date of the hearing upon request of any Dispute Party to the extent necessary to insure that such Dispute Party is given a reasonable period of time to prepare for the hearing. Written submittals in the English language shall be presented and exchanged by both Dispute Parties five business days before the hearing date. At such time the Dispute Parties shall also exchange copies of all documentary evidence upon which they will rely at the arbitration hearing and a list of the witnesses whom they intend to call to testify at the hearing. The Arbitrators shall make their determination as promptly as practicable after conclusion of the hearing.

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

(iii) The Arbitrators shall endeavor to complete all hearings not later than 120 days after their tribunal has been convened, and shall make a final award as promptly as

- 23 -

practicable thereafter. Such award shall be communicated, in writing, by the Arbitrators to the Dispute Parties, and shall contain specific findings of fact and conclusions of law in accordance with the governing law set forth in Section 9.12(b) of this Agreement. Any award of such Arbitrators shall be final and binding upon the Parties to this Agreement and shall not be attacked by any of the Parties to this Agreement in any court of law and may be enforced in any court having jurisdiction, including expressly the courts of the State of New York, United States of America, and the courts of the Federal District of Mexico. The Arbitrators shall apportion all costs and expenses of the arbitration, including the Arbitrators’ fees and expenses, fees and expenses of experts and fees and expenses of translators (“Arbitration Costs”) between the prevailing and non-prevailing Dispute Party as the Arbitrators shall deem fair and reasonable. In circumstances where (A) a Dispute has been asserted or defended against on grounds that the Arbitrators deem manifestly unreasonable, or (B) the non-prevailing Dispute Party has rejected participation in procedures under Section 9.12(c), the Arbitrators may assess all Arbitration Costs against the non-prevailing Dispute Party and may include in the award the prevailing Dispute Party’s attorney’s fees and expenses in connection with any and all proceedings under this Section 9.12. Notwithstanding the foregoing, in no event may the arbitrator award multiple or punitive damages.

(e) Pursuant to an agreement of the Parties hereto or a judicial determination that a Dispute is not subject to final and binding arbitration as set forth in Section 9.12(d), KCS, TMM, TMMH, MM and the Principal Stockholders each irrevocably agrees that any legal action or proceeding against it with respect to this Stockholders’ Agreement and any transaction contemplated by this Stockholders’ Agreement shall be brought only in the courts of the State of New York, or of Federal courts of the United States of America sitting in New York, and by execution and delivery of this Stockholders’ Agreement, KCS and each of TMM Holders irrevocably submits to the venue and jurisdiction of each such court and irrevocably waives any objection or defense such Party may have to venue or personal jurisdiction in any such court for the purpose of resolving any claim, dispute, cause of action arising out of or related to this Stockholders’ Agreement (including any claim that the suit or action has been brought in an inconvenient forum and any right to which it may become entitled on account of place of residence or domicile), the alleged breach of this Stockholders’ Agreement, the enforcement of the terms of this Stockholders’ Agreement, the Acquisition Agreement, the Ancillary Agreements and the other terms contemplated hereby and thereby. A final judgment in any suit, action or proceeding shall be conclusive and may be enforced in any court where jurisdiction over the Parties may be had or in which the Parties are subject to service of process.

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

- 24 -

9.13 Announcements. KCS and TMM shall consult with each other before issuing, and provide each other the opportunity to review, comment on and concur with, any press release or other public statement with respect to this Stockholders’ Agreement, except as KCS or TMM may determine is otherwise required by Applicable Law, judicial or administrative action or any requirement of the Mexican Stock Exchange, the New York Stock Exchange or any other applicable self-regulatory organization.

9.14 Cooperation on TMM Distribution. KCS acknowledges that holders may desire to effect a distribution of the shares of Common Stock to the stockholders of TMM in a tax efficient manner (a “Spin-Off”). In the event that TMM determines to effect a Spin-Off, KCS will, and will cause its subsidiaries to, take commercially reasonable efforts to cooperate with TMM in the consummation of the Spin-Off. Without limiting the generality of the foregoing, if requested by TMM, KCS agrees to use its commercially reasonable efforts to effect the Spin-Off Merger (as defined below) as promptly as practicable after receipt from TMM of notice of its intention to effect such Spin-Off Merger. TMM shall cooperate fully with KCS, and shall reimburse KCS, for any out-of-pocket expenses that KCS incurs in connection with the Spin-Off Merger, including the reasonable fees and expenses of KCS’s counsel (other than any such expenses that constitute Registration Expenses (as defined in the Registration Rights Agreement) in the event that the Spin-Off Merger requires registration under the Securities Act (in which case such registration shall reduce by one (1) the number of registrations required to be effected by KCS under Section 2 of the Registration Rights Agreement)) and shall indemnify and hold KCS harmless from and against all costs and expenses of any nature whatsoever (including taxes in connection therewith) resulting from, arising out of, or due to, directly or indirectly, the Spin-Off Merger (other than with respect to matters as to which KCS is obligated to provide indemnification under the Registration Rights Agreement).

For purposes of this Agreement, the term “Spin-Off Merger” shall mean a transaction occurring prior to that date which shall be one year following the Effective Time (as defined in the Acquisition Agreement) in which (i) a newly-formed entity organized under the laws of the UMS whose assets consist solely of the shares of Common Stock (“Holdco”) and the stock of which is distributed to the holders of capital stock of TMM is merged with and into a wholly-owned subsidiary of KCS and, in such merger, the outstanding shares of capital stock of Holdco are converted into the right to receive, in the aggregate, a number of shares of Common Stock equal to the number of shares of Common Stock held by Holdco; (ii) Holdco shall not have any indebtedness or other obligations (other than any obligations related solely to its organization and the holding of the shares of Common Stock, which obligations TMM shall agree to indemnify KCS against pursuant to an indemnity agreement satisfactory in form and substance to KCS and TMM); (iii) KCS and its subsidiaries shall not be required to assume or become liable for any other liabilities as a result of the Spin-Off Merger (other than any obligations or liabilities resulting from the registration of the shares of Common Stock issuable pursuant to the Spin-Off Merger); and (iv) KCS shall be reasonably satisfied that the transaction will not affect adversely in any material way any rights of KCS or any of its Affiliates under the Acquisition Agreement or any of the Ancillary Agreements, including without limitation, rights to receive any indemnification determined to be due thereunder.

- 25 -

IN WITNESS WHEREOF, the parties hereto have caused this Stockholders’ Agreement to be duly executed by their respective authorized officers as of the date hereof.


		KANSAS CITY SOUTHERN

		By:		/s/ Michael R. Haverty

		Name:		Michael R. Haverty
		Title:		Chairman, President & CEO

		GRUPO TMM, S.A.

		By:		/s/ Jose F. Serrano Segovia

		Name:		JOSE F. SERRANO SEGOVIA
		Title:		ATTORNEY IN FACT

		By:		/s/ Javier Segovia Serrano

		Name:		JAVIER SEGOVIA SERRANO
		Title:		ATTORNEY IN FACT

		TMM HOLDINGS, S.A. de C.V.

		By:		/s/ Jose F. Serrano Segovia

		Name:		JOSE F. SERRANO SEGOVIA
		Title:		ATTORNEY IN FACT

		By:		/s/ Javier Segovia Serrano

		Name:		JAVIER SEGOVIA SERRANO
		Title:		ATTORNEY IN FACT

		TMM MULTIMODAL, S.A. de C.V.

		By:		/s/ Jose F. Serrano Segovia

		Name:		JOSE F. SERRANO SEGOVIA
		Title:		ATTORNEY IN FACT

		By:		/s/ Javier Segovia Serrano

		Name:		JAVIER SEGOVIA SERRANO
		Title:		ATTORNEY IN FACT

- 26 -


		PRINCIPAL STOCKHOLDERS

		/s/ Jose F. Serrano Segovia

		Jose F. Serrano Segovia

		/s/ Ramon Serrano Segovia

		Ramon Serrano Segovia

		/s/ Teresa Serrano Segovia

		Teresa Serrano Segovia

		SERVICIOS DIRECTIVOS SERVIA, S.A. DE C.V.

		By:		/s/ Jose F. Serrano Segovia

		Name:		JOSE F. SERRANO SEGOVIA
		Title:		ATTORNEY IN FACT

		By:		/s/ Javier Segovia Serrano

		Name:		JAVIER SEGOVIA SERRANO
		Title:		ATTORNEY IN FACT

		PROMOTORA SERVIA, S.A. de C.V.

		By:		/s/ Jose F. Serrano Segovia

		Name:		JOSE F. SERRANO SEGOVIA
		Title:		ATTORNEY IN FACT

		By:		/s/ Javier Segovia Serrano

		Name:		JAVIER SEGOVIA SERRANO
		Title:		ATTORNEY IN FACT

- 27 -

EX-2 3 y11973exv2.htm EX-2: SECURITY AGREEMENT EX-2

Exhibit 2

SECURITY AGREEMENT

This SECURITY AGREEMENT (the “Agreement”) is entered into as of this 1st day of April, 2005, by and among Grupo TMM, S.A. (the “Grantor”), a sociedad anónima organized under the laws of the United Mexican States (the “UMS”), having its principal business office at Avenida de la Cúspide, No. 4755, Colonia Parques de Pedregal, 14010 Mexico, D.F., and THE BANK OF NEW YORK, a New York banking corporation with its principal corporate trust office at 101 Barclay Street, New York, New York 10286 (in its capacities hereunder, the “Collateral Agent”) (i) for the benefit of itself and THE BANK OF NEW YORK, a New York banking corporation with its principal corporate trust office at 101 Barclay Street, New York, New York 10286 in its capacity as Trustee (as defined below) and (ii) for the equal and ratable benefit of the Holders (as defined in the Indenture, as defined below). The term “Secured Parties” shall mean the Collateral Agent, the Holders, and the Trustee. This Agreement shall be deemed to be a Collateral Document in the meaning of the Indenture. Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Indenture.

W I T N E S S E T H:

WHEREAS, pursuant to Section 5.18(c) and 15.01(f) of that certain Indenture, dated as of August 11, 2004 (as amended by that certain Supplemental Indenture, effective as of August 20, 2004, the “Indenture”), by and among the Grantor, the Guarantors and The Bank of New York, as Trustee (in such capacity, the “Trustee”), the Grantor is required, subject to the terms and conditions stated therein, to pledge certain non-cash proceeds of a Qualifying Disposition consummated as of the date hereof pursuant to a Collateral Document to secure the Grantor’s obligations under the Notes, the Indenture and the Collateral Documents and the Grantor intends this Agreement to satisfy such requirement;

WHEREAS, the conditions precedent to the performance contemplated herein by the parties hereto have been satisfied; and

WHEREAS, the Collateral Agent is willing to perform pursuant to the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, it is hereby agreed by and among the parties hereto as follows:

SECTION 1. Definitions.

(a) Reference is hereby made to the Indenture for a statement of the terms thereof. All terms used in this Agreement and the recitals hereto which are defined in the Indenture or in Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “Code”) and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute.

SECTION 2. The Bank of New York is hereby appointed and authorized to act as Collateral Agent hereunder with such powers as are expressly delegated to the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Collateral Agent shall not have any duties or responsibilities except those expressly set forth herein, and no implied covenants or obligations shall be read into this Agreement against the Collateral Agent. The Bank of New York hereby agrees to and accepts such appointment. As collateral security for the payment and performance in full of all of the Secured Obligations (as defined in Section 3 hereof), Grantor (i) delivers herewith to the Collateral Agent, for the equal and ratable benefit of the Holders, the 18,000,000 shares of common stock of Kansas City Southern (the “Collateral”), represented by Certificate No. KS9303, duly indorsed in blank, received by the Grantor in connection with a Qualifying Disposition consummated as of the date hereof and (ii) hereby pledges, assigns and grants to the Collateral Agent, for the equal and ratable benefit of the Holders, a first priority continuing security interest in all right, title and interest of the Grantor in the Collateral. The account number of the segregated trust account established hereunder is 144541.

SECTION 3. Security for Obligations. The security interest created hereby in the Collateral constitutes continuing collateral security for the due and punctual payment of principal of and interest, and Additional Amounts on the Notes by the Grantor 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 the Indenture, the Notes, the Guarantees and the Collateral Documents, according to the terms thereunder (the “Secured Obligations”).

SECTION 4. Certain Rights Upon a Foreclosure Event. The Collateral Agent hereby acknowledges and agrees that upon the occurrence of an event which gives it the right to foreclose on the Collateral (“Foreclosure Event”) hereunder, such Collateral Agent shall provide to Kansas City Southern (“KCS”) prompt written notice at P.O. Box 219335, 427 West 12th Street, Kansas City, MO 64121-9335, Attention: President, of such Foreclosure Event and provide KCS the right to purchase the Collateral at a cash purchase price equal to the average closing price of KCS’s common stock on the New York Stock Exchange over the five consecutive trading days preceding the date of receipt of the notice of the pending foreclosure sale. In order to exercise such purchase right, KCS must deliver a written notice to the Collateral Agent at the address of its principal corporate trust office set forth in the preamble hereto to such effect within five business days after receipt of written notice of the Foreclosure Event and complete such purchase within 60 days from the delivery of such notice unless a longer time is required to secure any regulatory approvals, in which case the purchase shall occur on the second business day after the receipt of any such required approvals. This purchase right shall be assignable, in whole or in part, by KCS to any other person, but no such assignment shall relieve KCS of its obligation to assure payment of the purchase price for the Collateral as to which KCS has delivered such a written notice.

SECTION 5. Representations and Warranties. Grantor represents and warrants as follows:

-2-

(a) Subject to the provisions of the Indenture and the terms hereof, the Grantor is and will be at all times the sole and exclusive owner of, or otherwise has and will have adequate rights in, the Collateral free and clear of any Lien except for (i) the Lien created by this Agreement and (ii) the Liens permitted under the Indenture, including, but not limited to, Section 5.17 thereof.

(b) This Agreement creates in favor of the Collateral Agent, for the benefit of the Holders, a legal, valid and enforceable first priority security interest in the Collateral, as security for the Secured Obligations.

SECTION 6. Covenants as to the Collateral. So long as any of the Secured Obligations shall remain outstanding, unless the Collateral Agent shall otherwise consent in writing:

(a) Further Assurances. Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that may be necessary or desirable or that the Collateral Agent may request in order to (i) enable the Collateral Agent; for the equal and ratable benefit of the Holders, to protect and maintain the perfection of the security interest created hereby; (ii) enable the Collateral Agent, for the equal and ratable benefit of the Holders, to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement. The Grantor will at its own expense file any and all financing and continuation statements in effect in any jurisdiction with respect to the security interest created hereby, and take all necessary action to enable the Collateral Agent to obtain “control” within the meaning of the UCC with respect to the Collateral or to maintain possession thereof.

(b) Transfers and Other Liens.

(i) Except to the extent expressly permitted by the Indenture and the terms hereof, the Grantor will not sell, assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral.

(ii) Except to the extent expressly permitted by the Indenture, including, but not limited to, Section 5.17 thereof, Grantor will not create, suffer to exist or grant any Lien upon or with respect to any Collateral.

SECTION 7. Additional Provisions Concerning the Collateral.

(a) Grantor hereby agrees to file one or more financing or continuation statements, and amendments thereto, relating to the Collateral within 10 business days of the date hereof and to provide the Collateral Agent with a certified copy thereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(b) If Grantor fails to perform any agreement contained herein as and when required, the Collateral Agent may but shall not be obligated to itself perform, or cause performance of, such agreement or obligation, in the name of Grantor or the Collateral Agent,

-3-

and the expenses of the Collateral Agent incurred in connection therewith shall be payable by the Grantor pursuant to Section 9 hereof.

(c) So long as no Default or Event of Default under the Indenture shall have occurred and be continuing, the Collateral Agent shall promptly deliver to the Grantor in a manner reasonably satisfactory to the Grantor all dividends or distributions paid in respect of, or payments in respect of the purchase, redemption, or other retirement or acquisition for value of, the Collateral, except as otherwise provided in Section 15.02 of the Indenture.

(d) So long as no Default or Event of Default shall have occurred and be continuing, the Grantor 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 the Collateral.

(e) Notwithstanding any other provision herein, the Collateral shall be subject to release pursuant to the terms of the Indenture, including, but not limited to, Section 15.03 thereof.

SECTION 8. Remedies Upon Default. If any Event of Default shall have occurred and be continuing, the Collateral Agent shall be entitled to exercise any and all remedies set forth in Article 6 of the Indenture. Notwithstanding the foregoing, the Collateral Agent may exercise all of its remedies as a secured party with respect to the Collateral upon the occurrence of an Event of Default pursuant to the Code with respect to such Collateral.

SECTION 9. Indemnity and Expenses.

(a) Grantor agrees to defend, protect, indemnify and hold each Indemnitee harmless from and against any and all damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including, without limitation, reasonable legal fees, costs and expenses of counsel) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement); provided, however, that Grantor shall not have any obligation under this Section 9(a) to any Indemnitee caused by such Person’s gross negligence or willful misconduct.

(b) Grantor agrees to pay to the Collateral Agent compensation for its services hereunder, as has been agreed to in writing, and upon reasonable request the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent, which the Collateral Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder, or (iv) the failure by Grantor to perform or observe any of the provisions hereof.

(c) Notwithstanding anything to the contrary in this Agreement, the Grantor hereby grants to the Collateral Agent a lien on the Collateral such that, in the event that any and all charges payable under this Section 9 shall not be timely paid, the Collateral Agent shall have the right to pay itself from the Collateral the full amount owed, provided that written notice of the

-4-

Collateral Agent’s intent to proceed under this section be given at least five business days in advance of such action.

The provisions of this Section 9 shall survive the termination of the Agreement

SECTION 10. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered, if to Grantor, to it in care of the Parent at its address specified in the preamble hereto, and if to the Collateral Agent, to it at its address specified in the preamble hereto. All such notices and other communications shall be effective (a) if sent by certified mail, postage prepaid and return receipt requested, when received.

SECTION 11. Miscellaneous.

(a) No amendment of any provision of this Agreement (including any Schedule attached hereto) shall be effective unless it is in writing and signed by Grantor and the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure by Grantor therefrom, shall be effective unless it is in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(b) No reasonable failure on the part of the Collateral Agent to exercise, and no reasonable delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral Agent provided herein are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.

(c) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(d) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the indefeasible payment in full of all of the Secured Obligations and (ii) be binding on Grantor and all other Persons who become bound pursuant to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the Collateral Agent to the benefit of the Collateral Agent and its permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, the Collateral Agent may assign or otherwise transfer its rights and obligations under this Agreement in accordance with the provisions of the Indenture. Upon any such permitted assignment or transfer, all references in this Agreement to the Collateral Agent shall mean the assignee of the Collateral Agent

(e) Upon the satisfaction in full of the Secured Obligations and the termination of the Indenture, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the Grantor and (ii) the Collateral Agent will, upon the Grantor’s request, and at the Grantor’s expense, without any representation,

-5-

warranty or recourse whatsoever, (A) return to the Grantor, or to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct, such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination.

(f) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(g) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

(h) GRANTOR (AND BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT, THE AGENT) WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

(i) Nothing contained herein shall affect the right of the Collateral Agent to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against Grantor or any property of Grantor in any other jurisdiction.

(j) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

-6-

(k) This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one in the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be as effective as delivery of an original executed counterpart.

(l) This Agreement is subject to the terms of the Indenture. In the event that there exists any conflict between the terms of this agreement and the terms of the Indenture, the Indenture shall govern as to such conflict.

SECTION 12. The Collateral Agent.

(a) The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent are solely to protect the Collateral Agent’s and the Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and it shall not be responsible to any Grantor or any Secured Party for any act or failure to act hereunder, except for its own gross negligence or willful misconduct.

(b) Notwithstanding anything to the contrary contained herein, in no event shall the Collateral Agent have any obligation to monitor the perfection, continuation of perfection or the sufficiency or validity of any security interest in or related to the Collateral or to prepare or file any Code financing statement or continuation statements.

(c) The Collateral Agent shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties made herein, all of which are made solely by the Grantor. The Collateral Agent makes no representations as to, nor shall it be responsible for, the existence, genuineness, value or condition of any of the Collateral or any part thereof, the title of the Grantor thereto or the security afforded or intended to be afforded by this Agreement, or the validity, execution (except its execution), enforceability, legality or sufficiency of this Agreement, or the validity, perfection, priority or enforceability of the liens or security interests in any of the Collateral created or intended to be created by this Agreement, or the payment of taxes, charges, assessments or liens upon the Collateral or otherwise as to the maintenance of the Collateral, and the Collateral Agent shall incur no liability or responsibility in respect of any such matters. The Collateral Agent shall have no responsibility for preparing, recording, filing, re-recording or refiling any financing statement, continuation statement or other instrument in any public office at any time.

(d) The Collateral Agent shall not be required to ascertain or inquire as to the performance by the Grantor of any of the covenants or agreements contained herein, in the other collateral documents of under the Indenture.

(e) The Collateral Agent shall be under no obligation or duty to take any action under this Agreement or otherwise if taking such action (i) would subject the Collateral

-7-

Agent to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the Collateral Agent to qualify to do business in any jurisdiction where it is not then so qualified, unless the Collateral Agent shall receive security or indemnity satisfactory to it against such tax (or equivalent liability), or any liability resulting from such qualification, in each case as results from the taking of such action under this Agreement.

(f) The Collateral Agent shall not be liable for any action taken or omitted to be taken in accordance with this Agreement except for its own gross negligence or willful misconduct.

(g) The permissive right of the Collateral Agent to take any action under this Agreement shall not be construed as a duty to so act.

(h) The Collateral Agent may execute any of the trusts or powers hereof and perform any duty hereunder or under either directly or by or through agents or attorneys, and the Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys selected by it with due care. The Collateral Agent shall be entitled to advice of counsel concerning all matters pertaining to the administration of this Agreement, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in accordance therewith.

(i) Whenever in the administration of this Agreement, the Collateral Agent shall deem it necessary or desirable that a factual matter be proved or established in connection with the Collateral Agent taking, suffering or omitting any action hereunder or thereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of an officer of the Grantor delivered to the Collateral Agent, and such certificate shall be full warrant to the Collateral Agent for any action taken, suffered or omitted in reliance thereon.

(j) The Collateral Agent shall have the right at any time to seek instructions concerning the administration of this Agreement from any court of competent jurisdiction.

(k) The Collateral Agent may conclusively rely upon, and shall be fully protected in acting upon or failing to act as a consequence of, any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document which it believes in good faith is genuine and has been signed or presented by the proper party or parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties. In the absence of its own gross negligence or willful misconduct, the Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any such certificates, opinions or other information and need not investigate any fact or matter stated therein.

(l) In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

-8-

(m) In no event shall the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

(n) The Collateral Agent may at any time, by giving written notice to the Grantor, resign and be discharged of the responsibilities hereby created, such resignation to become effective upon (i) the appointment of a successor Collateral Agent and (ii) the acceptance of such appointment by such successor Collateral Agent. If no successor Collateral Agent shall be appointed and shall have accepted such appointment within 30 days after the Collateral Agent gives the aforesaid notice of resignation, the Collateral Agent, the Grantor or any Secured Party may apply to any court of competent jurisdiction at the expense of the Grantor to appoint a successor Collateral Agent to act until such time, if any, as a successor Collateral Agent shall have been appointed.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

-9-

IN WITNESS WHEREOF, Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.


	GRANTOR: GRUPO TMM, S.A.
	By:
		Name:
		Title:

SIGNATURE PAGE TO SECURITY AGREEMENT

IN WITNESS WHEREOF, Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.


	COLLATERAL AGENT: THE BANK OF NEW YORK
	By:
		Name:
		Title:

SIGNATURE PAGE TO SECURITY AGREEMENT

EXECUTION COPY

ACKNOWLEDGMENT OF GRANTOR

On , 2005, before me, the undersigned, a Notary Public in and for said State, personally appeared JUAN FERNANDEZ GALEAZZI, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity on behalf of GRUPO TMM, S.A., and that by his signature on the instrument the person, or entity upon behalf of which the person acted, executed the instrument.




	Notary Public
	{seal}

-----END PRIVACY-ENHANCED MESSAGE-----

STATE OF NEW YORK

COUNTY OF NEW YORK




	1.	Name of Reporting Person: Grupo TMM, S.A.			I.R.S. Identification Nos. of above persons (entities only):

	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	o
		(b)	þ

	3.	SEC Use Only:

	4.	Source of Funds (See Instructions): OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

	6.	Citizenship or Place of Organization: United Mexican States

Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: -0-

			8.	Shared Voting Power: 18,000,000

			9.	Sole Dispositive Power: 18,000,000

			10.	Shared Dispositive Power: -0-

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 18,000,000

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o

	13.	Percent of Class Represented by Amount in Row (11): 22.03%

	14.	Type of Reporting Person (See Instructions): CO