AMENDMENT NO. 3 TO THE CREDIT AGREEMENT
Dated as of November 4, 2005
          AMENDMENT NO. 3 TO THE CREDIT AGREEMENT (this “Amendment No. 3”) among
The Kansas City Southern Railway Company, a Missouri corporation, (the
“Borrower”), Kansas City Southern, a Delaware corporation (the “Parent”), the
subsidiary guarantors listed on the signature page hereof (the “Subsidiary
Guarantors”), the Lender Parties (as hereinafter defined) party hereto, The Bank
of Nova Scotia (“BNS”), as collateral agent (the “Collateral Agent”) and BNS, as
administrative agent (the “Administrative Agent”; together with the Collateral
Agent, the “Agents”).
PRELIMINARY STATEMENTS:
          (1) The Borrower, the Parent, the Subsidiary Guarantors, certain
financial institutions and other persons from time to time parties thereto
(collectively, the “Lender Parties”), the Agents, Morgan Stanley Senior Funding,
Inc. (“Morgan Stanley”), as syndication agent, BNS and Morgan Stanley, as joint
lead arrangers and joint bookrunners, and Harris N.A. (as successor by merger
with Harris Trust and Savings Bank), as documentation agent, have entered into
that certain Credit Agreement dated as of March 30, 2004 (as amended by
Amendment No. 1 and Amendment No. 2, and as otherwise amended, restated,
supplemented or otherwise modified, the “Credit Agreement”; capitalized terms
used herein but not defined shall be used herein as defined in the Credit
Agreement).
          (2) The Borrower has requested that the Lenders agree to amend the
Credit Agreement as set forth herein.
          (3) The Lenders have agreed, subject to the terms and conditions
hereinafter set forth, to amend the Credit Agreement in certain respects as set
forth below.
          NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereto hereby agree as follows:
      SECTION 1. Amendment of Credit Agreement(i) . Subject to Amendment No. 3
Effectiveness (as hereinafter defined), the proviso to the definition of
“EBITDA” contained in Section 1.01 of the Credit Agreement is hereby amended,
effective as of September 30, 2005, by (a) deleting the word “and” at the end of
clause two thereof, (b) deleting the period at the end of clause (iii) thereof
and (c) adding a new clause (iv) to the end thereof to read as follows:
“and (iv) non-cash charges not to exceed $35,700,000 in the aggregate for the
fiscal quarter ending September 30, 2005 with respect to an increase in claims
reserves.”
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          SECTION 2. Conditions to Effectiveness. This Amendment No. 3 and the
amendment contained herein shall become effective (“Amendment No. 3
Effectiveness”) as of September 30, 2005 when each of the conditions set forth
below shall have been fulfilled to the satisfaction of the Administrative Agent:
      (i) Execution of Counterparts. The Administrative Agent shall have
received counterparts of this Amendment No. 3, duly executed and delivered on
behalf of each of the (a) Loan Parties and (b) the Required Lenders.
      (ii) Payment of Fees and Expenses. The Borrower shall have paid all
reasonable expenses (including the reasonable fees and expenses of Shearman &
Sterling LLP) incurred in connection with the preparation, negotiation and
execution of this Amendment No. 3 and other matters relating to the Credit
Agreement from and after the last invoice to the extent invoiced.
      (iii) No Default. No Default shall have occurred and be continuing, or
would occur as a result of the transactions contemplated by this Agreement.
          SECTION 3. Confirmation of Representations and Warranties. Each of the
Loan Parties hereby represents and warrants, on and as of the date hereof, that
the representations and warranties contained in the Credit Agreement are correct
and true in all material respects on and as of the date hereof, before and after
giving effect to this Amendment No. 3, as though made on and as of the date
hereof, other than any such representations or warranties that, by their terms,
refer to a specific date.
          SECTION 4. Affirmation of Subsidiary Guarantors. Each Subsidiary
Guarantor hereby consents to the amendments to the Credit Agreement effected
hereby, and hereby confirms and agrees that, notwithstanding the effectiveness
of this Amendment No. 3, the obligations of such Subsidiary Guarantor contained
in Article VIII of the Credit Agreement, as amended hereby, or in any other Loan
Documents to which it is a party are, and shall remain, in full force and effect
and are hereby ratified and confirmed in all respects, except that, on and after
the effectiveness of this Amendment No. 3, each reference in Article VIII of the
Credit Agreement and in each of the other Loan Documents to “the Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to
the Credit Agreement, as modified by this Amendment No. 3.
          SECTION 5. Reference to and Effect on the Loan Documents. (a) On and
after the effectiveness of this Amendment No. 3, each reference in the Credit
Agreement to "hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other transaction documents to the
“Credit Agreement”, “thereunder”, “thereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
modified by this Amendment No. 3.
          (b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment No. 3, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed.
          (c) The execution, delivery and effectiveness of this Amendment No. 3
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or any Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
          SECTION 6. Execution in Counterparts. This Amendment No. 3 may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when
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so executed shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment No. 3 by telecopier or
electronic mail in “Portable Document Format” (PDF) shall be effective as
delivery of an original executed counterpart of this Amendment No. 3.
          SECTION 7. Governing Law. This Amendment No. 3 shall be governed by,
and construed in accordance with, the laws of the State of New York, and shall
be subject to the jurisdictional and service provisions of the Credit Agreement,
as if this were a part of the Credit Agreement.
          SECTION 8. Entire Agreement; Modification. This Amendment No. 3
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, there being no other agreements or understandings, oral,
written or otherwise, respecting such subject matter, any such agreement or
understanding being superseded hereby, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, and
may not be amended, extended or otherwise modified, except in a writing executed
in whole or in counterparts by each party hereto.
[Signatures follow.]
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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

            THE KANSAS CITY SOUTHERN RAILWAY COMPANY
      By   /s/ Jay M. Nadlman         Title:   Associate General Counsel &
Corporate Secretary        KANSAS CITY SOUTHERN
      By   /s/ Jay M. Nadlman         Title:   Associate General Counsel &
Corporate Secretary        SOUTHERN INDUSTRIAL SERVICES, INC.
      By   /s/ Ronald G. Russ         Title:   Vice President & Treasurer       
TRANS-SERVE, INC.
      By   /s/ Ronald G. Russ         Title:   Vice President & Treasurer       
VEALS, INC.
      By   /s/ Ronald G. Russ         Title:   Vice President & Treasurer       
SIS BULK HOLDING, INC.
      By   /s/ Ronald G. Russ         Title:   Vice President & Treasurer       
PABTEX GP, LLC
      By   /s/ Jay M. Nadlman         Title:   Authorized Representative     

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            PABTEX, L.P.
      By   /s/ Jay M. Nadlman         Title:   Authorized Representative       
GATEWAY EASTERN RAILROAD COMPANY
      By   /s/ Jay M. Nadlman         Title:   Vice President & Secretary       
SCC HOLDINGS, LLC
      By   /s/ Jay M. Nadlman         Title:   Authorized Representative       
SOUTHERN DEVELOPMENT COMPANY
      By   /s/ Ronald G. Russ         Title:   Vice President & Treasurer       
THE KANSAS CITY NORTHERN RAILWAY COMPANY
      By   /s/ Ronald G. Russ         Title:   Vice President & Chief Financial
Officer     

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            THE BANK OF NOVA SCOTIA, as Administrative Agent
      By   /s/ V. Gibson         Title:   Assistant Agent     

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