DATED AS OF NOVEMBER 2, 2005

THE KANSAS CITY SOUTHERN RAILWAY COMPANY

- and –

NAFTA RAIL, S.A. de C.V.

(AS BORROWERS)

- and –

EXPORT DEVELOPMENT CANADA

- and –

KfW (f/k/a KREDITANSTALT fur WIEDERAUFBAU)

(AS LENDERS)

1

AMENDED AND RESTATED LOAN AGREEMENT
TABLE OF CONTENTS

     
ARTICLE 1
1.01
1.02
1.03
1.04
1.05
1.06
ARTICLE 2
2.01
2.02
ARTICLE 3
3.01
3.02
3.03
3.04
3.05
ARTICLE 4
4.01
4.02
ARTICLE 5
5.01
ARTICLE 6
6.01
6.02
6.03
ARTICLE 7
7.01
ARTICLE 8
8.01
ARTICLE 9
9.01
9.02
9.03
9.04
9.05
9.06
9.07
9.08
9.09
9.10
9.11
9.12
9.13
  INTERPRETATION
Definitions
Currency
Reference
Accounting Terms
Invalidity
Schedules
ISSUANCE OF REPLACEMENT NOTES
The Replacement Notes.
Compliance with the Interest Act (Canada)
REPAYMENTS AND PREPAYMENTS
Mandatory Prepayments
Voluntary Prepayments
Costs and Illegality
No Deduction for Taxes
Place and Manner of Payment
REPRESENTATIONS AND WARRANTIES
Representations and Warranties
Survival of Representations and Warranties
COVENANTS
Covenants
THE EFFECTIVE DATE
Conditions Precedent
Actions to be taken by or on the Effective Date
Waiver
DEFAULT AND REMEDIES
Events of Default
SECURITY
Security
MISCELLANEOUS
Waivers and Amendments
Notices
Successors and Assigns
Assignment by Borrowers – Transfer of Obligations for New Leveraged Lease
Assignment by KfW
Implementation of Agreement
Costs and Expenses
English Language
Currency
Entire Agreement
Governing Law
Obligations Joint and Several
Counterparts

Schedule “A-1” — Schedule of KCSR Locomotives
Schedule “A-2” — Schedule of SPV Locomotives
Schedule “B-1” — Form of EDC Notes
Schedule “B-2” — Form of KfW Notes
Schedule “C” — Form of Mortgage and Security Agreement

2

THIS AMENDED AND RESTATED LOAN AGREEMENT made as of the 2nd day of November,
2005.

BETWEEN:

THE KANSAS CITY SOUTHERN RAILWAY COMPANY, a corporation incorporated

pursuant to the laws of the State of Missouri (“KCSR”)

- and -

NAFTA RAIL, S.A. de C.V., a corporation organized under the laws of Mexico
(“SPV”)

(KCSR and SPV herein collectively referred to as the “Borrowers”),

- and -

EXPORT DEVELOPMENT CANADA (“EDC”)

- and -

KfW (f/k/a KREDITANSTALT fur WIEDERAUFBAU) (“KfW”)

(EDC and KfW herein collectively referred to as the “Lenders”)

RECITALS:

  A.   WHEREAS the Lenders and El-Mo-Mex, Inc. (“El-Mo-Mex”) previously entered
into a Loan Agreement dated as of September 8, 1999, which Loan Agreement was
subsequently amended on November 30, 1999, December 15, 1999 and March 14, 2003
(as so amended, the “Original Loan Agreement”);

  B.   AND WHEREAS the Original Loan Agreement provided for the secured
financing of seventy five (75) General Motors SD70MAC 4,000 horse power
diesel-electric locomotives (the “Locomotives” and each, a “Locomotive”) and the
sublease of such Locomotives to TFM, S.A. de C.V. (“TFM”) under a Sublease of
Locomotives dated as of September 8, 1999 (the “Lease”) from General Motors de
Mexico, S. de R.L., de C.V. (“GM de Mexico”), as lessor, to TFM, as lessee;

  C.   AND WHEREAS the Locomotives described on Schedule A-1 (the “KCSR
Locomotives”) have now been sold by El-Mo-Mex to KCSR and the Locomotives
described on Schedule A-2 (the “SPV Locomotives”) have now been sold by
El-Mo-Mex to SPV,

  D.   AND WHEREAS the rights and obligations of the “Lessor” under the Lease
have been assigned from GM de Mexico to El-Mo-Mex and then further assigned from
El-Mo-Mex to the Borrowers;

  E.   AND WHEREAS, the Borrowers have assumed the obligations of El-Mo-Mex
under the Original Loan Agreement pursuant to an Assignment and Assumption
Agreement dated as of November 2, 2005 (the “Assignment and Assumption
Agreement”);

  F.   AND WHEREAS, the KCSR Locomotives and the SPV Locomotives constitute all
of the Locomotives and, after giving effect to the transactions described above,
the Locomotives are now owned by either KCSR or SPV and are leased by the
Borrowers to TFM under the Lease;

  G.   AND WHEREAS various advances were made by the Lenders to El-Mo-Mex under
the Original Loan Agreement which were evidenced by notes (the “Original Notes”)
issued by El-Mo-Mex, as contemplated by the Original Loan Agreement;

  H.   AND WHEREAS the Lenders have no further obligation to make any additional
loans or advances to the Borrower or any other person under the Original Loan
Agreement or under such agreement as amended and restated hereby;

  I.   AND WHEREAS as of the dated hereof, the outstanding principal balance of
the Original Notes issued to EDC is USD$63,962,452.85 and the outstanding
principal balance of the Original Notes issued to KfW is USD$31,981,635.06;

  J.   AND WHEREAS the Original Notes are to be replaced with the Notes of the
Borrowers to be issued pursuant to this Agreement;

  K.   AND WHEREAS the Borrowers have agreed with the Lenders that in
consideration of the Lenders consent to the transactions described above and
such further modifications to the Original Loan Agreement as are set forth
herein, the Borrowers shall grant to the Lenders a security interest in the
Locomotives and shall be jointly and severally liable to the Lenders under this
Agreement and under the Notes;

      L. AND WHEREAS, the Borrowers now wish to further amend and to restate the
Original Loan Agreement to give effect to the transactions described above and
to make such other modifications to such agreement as are set contained herein,
so that the Original Loan Agreement, as amended and restated hereby, shall be
and read as set forth herein;

  M.   AND WHEREAS this Agreement shall be effective on and as of the Effective
Date, as hereinafter defined.

NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:

ARTICLE 1

INTERPRETATION

  1.01   Definitions

Whenever used in this Agreement, unless the context otherwise specifies or
requires, the following words and terms shall have the meanings set out below
(all terms defined in this Section 1.01 or in the recitals in the singular shall
have the same meaning when used in the plural and vice-versa):

“Agreement” means this Amended and Restated Loan Agreement and all schedules and
instruments supplementing or confirming or amending this Agreement and
references to “Article”, “Section”, “Schedule”, mean and refer to the specified
Article, Section or Schedule of this Agreement;

“Affiliate” shall have the meaning ascribed thereto in the Canada Business
Corporations Act (Canada);

“Applicable Law” means, with respect to any Person, property, transaction or
event, all laws, statutes, regulations, judgments and decrees applicable to such
Person, property, transaction or event and all official directives, rules,
guidelines and policies issued by any Governmental Authority having authority
over such Person, property, transaction or event;

“Banking Day” means any day other than a Saturday or Sunday on which banks are
generally open for business in Toronto, Canada, Frankfurt, Germany, New York,
New York and Kansas City, Missouri;

“Casualty Occurrence” means an event in which any Locomotive;

  (a)   shall have been expropriated by any Governmental Authority;

  (b)   shall be requisitioned or taken over for use by any Governmental
Authority for a period in excess of fifty-five (55) days or such shorter period
equal to the remaining term of the Lease as it may apply to such Locomotive
unless such Governmental Authority continues to perform all obligations of TFM
thereunder; or

  (c)   any Locomotive is not available for use by TFM for a period of
fifty-five (55) days for reasons of Force Majeure (as such term is defined in
the Sublease).

“Casualty Value” with respect to each Locomotive, means the pro-rata portion of
the principal outstanding under the applicable Note, plus accrued and unpaid
interest;

“Change of Control” means, with respect to any corporation, the acquisition by
any Person, other than a Permitted Person (as defined below) of (a) beneficial
ownership of more than 50% of the outstanding voting shares of such corporation,
or (b) all or substantially all of the assets of such corporation. For the
purposes hereof, “Permitted Person” means any Person which, as at the date
hereof, is an Affiliate of such corporation;

“Default” means any event which is or which, with the passage of time, the
giving of notice or both, would be an Event of Default;

“Designated Account” means an account of the Borrower of which the Lenders are
notified by the Borrower from time to time for the purposes of the transactions
under this Agreement.

“Effective Date” shall have the meaning set forth in Section 6.01;

“Encumbrance” means any pledge, lien, charge, security agreement, lease,
hypothec, title retention contract, mortgage, encumbrance, option, adverse
claim, demand or restriction of any kind;

“Event of Default” means any one of the events set forth in Section 7.01;

“Excluded Taxes” means Taxes imposed on or with respect to the Lender’s income
or capital or Taxes imposed in Canada with respect to EDC and Germany with
respect to KfW;

“Governmental Authority” means any government, regulatory authority,
governmental department, agency, commission, board, tribunal or court or other
law, rule, or regulation-making entity having jurisdiction on behalf of any
nation, or province, state or municipality;

“Interest Rate” means 8.836% per annum;

“Lease” means the lease between the Borrowers as “Lessors” and TFM as “Lessee”,
originally dated September 8, 1999 and providing for the lease of the
Locomotives to TFM, as the same may be amended, extended, supplemented, restated
or replaced from time to time;

“Loan Documents” means this Agreement and the Security Documents;

“Locomotive”, “KCSR Locomotive” and “SPV Locomotive” shall have the meaning
ascribed thereto in the recitals;

“Make Whole Amount” means the amount payable by the Borrowers equal to the
present value of foregone scheduled interest and principal payments for the
principal indebtedness prepaid less the principal amount being prepaid. Such
present value shall be determined based on a discount rate (the “Discount Rate”)
equal to the sum of i) the then existing interpolated yield of on the run liquid
benchmark U.S. Treasury Notes (bid yield) as indicated on Reuters Page RTRTSY1
(or such other pages as may be substituted by Reuters), at 11 o’clock a.m. New
York City time on the date of such prepayment with a maturity closest to the
remaining average life to maturity of the outstanding principal of the principal
amount being prepaid, and ii) the Margin. In the event that the Discount Rate is
greater than the Interest Rate, prepayment would be permitted on similar notice
against receipt of the outstanding principal plus any accrued interest to the
date of prepayment;

“Margin” means 1.75%.

“Material Adverse Effect” means (a) a material adverse effect on the condition,
financial or otherwise, or to the earnings, operations, assets, business affairs
or business prospects of the Borrowers; (b) a material adverse effect on the
ability of the Borrowers to perform its payment or other obligations under this
Agreement or (c) a material adverse effect on the rights and remedies available
to EDC or KfW under the Loan Documents;

“Mortgage and Security Agreement” means the mortgage and security agreement
substantially in the form of Schedule C appended hereto between the Borrowers,
as the borrowers and the Lenders, as secured party;

“Notes” means the replacement Notes issued to the Lenders in exchange for the
Original Notes;

“Original Loan Agreement” shall have the meaning ascribed thereto in the
recitals;

“Original Notes” means the Notes issued to the Lenders under the Original Loan
Agreement;

“Permitted Encumbrances” means:

  (d)   Encumbrances for Taxes and assessments not at the time overdue; or

  (e)   any undetermined or inchoate Encumbrances and charges that have not at
the time been filed against the Borrower.

“Person” means any individual, sole proprietorship, partnership, unincorporated
association, trust, body corporate, or a natural person;

“Post-Default Rate” means (i) a rate per annum during the period from and
including the due date to, but excluding, the date on which such amount is paid
in full, equal to 2% plus (ii) the Interest Rate. Such rate shall be calculated
on the basis of the actual number of day elapsed divided by 360;

“Security” means the security or other interest provided by the Borrowers
pursuant to the provisions of the Mortgage and Security Agreement;

“Security Documents” means the Mortgage and Security Agreement and the Notes, or
any other document which evidences the Lenders’ security interest in the
Security;

“Taxes” means all present or future taxes of any kind or nature whatsoever
(other than Excluded Taxes) including, without limitation, income taxes, sales
or value-added taxes, stamp taxes, levies, imposts, duties, fees, royalties and
all deductions and withholdings together with any fines, penalties and interest
thereon and any restrictions or conditions resulting in an obligation to pay
monies to a Governmental Authority; and

      “U.S. Dollars” and US$means the currency of the United States of America.

 
   
1.02
  Currency

Unless otherwise specified, all references to money amounts are to lawful
currency of the United States of America.

  1.03   Reference

The words “hereto”, “hereunder” and similar expressions refer to this Agreement.
Unless otherwise specifically provided, words importing the singular include the
plural and vice versa and words importing gender include all genders. Headings
in this Agreement have been inserted for convenience only and do not form part
of the agreement between the parties.

  1.04   Accounting Terms

All accounting terms not otherwise defined in this Agreement shall have the
meanings assigned to them in accordance with United States of America generally
accepted accounting principles applied on a consistent basis.

  1.05   Invalidity

If any of the provisions contained in any Loan Document are invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby.

  1.06   Schedules

The Schedules to this Agreement are listed in the Table of Contents to this
Agreement.

ARTICLE 2

ISSUANCE OF REPLACEMENT NOTES

  2.01   The Replacement Notes.

To evidence the obligations of the Borrowers to the Lenders with respect to the
advances previously made by the Lenders pursuant to the Original Loan Agreement,
the Borrowers shall, on the Effective Date, issue to the Lenders, in exchange
for the Original Notes, their recourse promissory notes in the form of
Schedule B-1, with respect to the Notes to be issued to EDC, and in the form of
Schedule B-2, with respect to the Notes to be issued to KfW. Each Note shall be
in the aggregate principal amount equal to the unpaid principal amount of the
Original Notes that it is replacing, shall bear interest at the Interest Rate
and, expect as expressly set forth herein, shall be repayable in accordance with
the terms therein set forth. The Notes shall be entitled to the security
provided for in the Mortgage and Security Agreement. The Borrowers, as a direct
and recourse obligation, jointly and severally hereby agree to pay in full all
principal and interest on the Notes in the amounts and on the dates prescribed
in the Notes for payment of such principal and interest, all in accordance with
the terms and provisions of the Notes and of this Agreement.

2.02 Compliance with the Interest Act (Canada)

Any interest rate or fee based on a period less than a year expressed as an
annual rate for the purposes of the Interest Act (Canada) is equivalent to such
determined rate multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by the number of days in the
period upon which it was based.

ARTICLE 3

REPAYMENTS AND PREPAYMENTS

  3.01   Mandatory Prepayments

The Borrowers shall prepay to the Lenders an amount equal to the applicable
Casualty Value within five (5) Banking Days of receipt by a Borrower of a
Casualty Value pertaining to a Locomotive pursuant to the Lease. Upon payment of
such Casualty Value, the Lenders shall release to the Borrowers or to such
person as they may direct in writing to the Lenders any interests in any such
Locomotive which is the subject matter of such payment pursuant to the Lease.
The portion of the Casualty Value to be paid to each Lender shall be equal to
the proportion that the outstanding principal amount of the Notes held by such
Lender bears to the outstanding principal amount of all Notes held by both
Lenders. After receipt of the Casualty Value, the remaining installments of
principal and interest on the Notes shall be reduced pro-rata to give effect to
the receipt of the Casualty Value.

After the number of Casualty Occurrences with respect to Locomotives exceeds in
the aggregate 15, the Borrowers shall, in addition to the Casualty Value, pay to
the Lenders a Make Whole Amount with respect to each prepayment on account of a
Casualty Occurrence thereafter.

  3.02   Voluntary Prepayments

Upon not less than 90 days prior written notice, the Borrowers shall be entitled
to prepay the outstanding principal amount of the Notes, ratably, in an
aggregate amount of not less than US$10,000,000 together with the applicable
Make Whole Amount. Amounts prepaid (excluding any Make Whole Amount) shall be
applied to payments of principal in inverse order of maturity. The Make Whole
Amount, for the purposes of this section only, shall be determined based on a
discount rate equal to the sum of i) the then existing interpolated yield of on
the run liquid benchmark U.S. Treasury Notes (bid yield) as indicated on Reuters
Page RTRTSY1 (or such other pages as may be substituted by Reuters), at 11
o’clock a.m. New York City time on the date of such prepayment with a maturity
closest to the remaining average life to maturity of the outstanding principal
of the Notes, and ii) 250 basis points. In the event that the Discount Rate is
greater than Interest Rate, prepayment would be permitted on similar notice
against receipt of the outstanding principal plus any accrued interest to the
date of prepayment.

  3.03   Costs and Illegality

  (a)   In the event after the date hereof that a law or regulation is enacted
or changed, or the interpretation or administration thereof is changed by the
administering governmental authority, or in the event that a judgment is
rendered which:

  (i)   subjects either Lender to any tax with respect to payments to be made by
the Borrowers to such Lender hereunder (except for Excluded Taxes);

  (ii)   imposes or modifies any reserve or similar requirements against assets
held by, or deposits in or for the account of, or loans by, an office of a
Lender; or

  (iii)   imposes on a Lender any other condition with respect to this
Agreement;

which for certainty, does not include any costs incurred by a Lender as a result
of a participation of all or any part of the Note held by such Lender with the
net result that the cost to such Lender with respect to the loan evidenced by
such Note is increased then, within twenty (20) days after demand by such Lender
to the Borrowers claiming compensation (which demand shall set forth the
additional amount to be paid by the Borrower and the basis therefor), the
Borrowers agree to pay to such Lender such additional amounts in respect of any
period which is no more than ninety (90) days prior to such demand to compensate
such Lender for such increased costs. Each Lender will promptly notify the
Borrowers of any event of which it has knowledge occurring after the date hereof
which will entitle such Lender to compensation pursuant this Section 3.03(a). In
the event that a Lender demands compensation under this Section 3.03(a) the
Borrowers may at its option, upon at least three Banking Days prior notice to
such Lender, prepay all or a portion, without penalty, of the outstanding
principal indebtedness of the Borrowers together with accrued interest thereon,
and all other sums due hereunder together with the Make Whole Amount.

In determining the amount of compensation payable by the Borrowers under this
Section 3.03(a), the Lenders shall use reasonable efforts to minimize the
compensation payable by the Borrowers including using reasonable efforts to
obtain refunds or credit and any compensation paid by the Borrowers, which is
later determined not to have been properly payable, shall forthwith be
reimbursed by the Lenders to the Borrowers.

The obligations of the Borrowers under this Section 3.03(a) will survive the
repayment to the Lender of the principal of and interest on the indebtedness of
the Borrowers to the Lenders hereunder.

  (b)   If it will become unlawful in any relevant jurisdiction for a Lender to
continue to maintain the advances that are evidenced by the Note or for a Lender
to make or receive any payment or to perform, exercise or to give effect to any
obligation, right or benefit under this Agreement or any related document, the
Borrowers will prepay to such Lender, if requested by such Lender, forthwith or
at the end of such period as such Lender will have permitted, the principal
indebtedness of the Borrowers together with interest accrued thereon and all
other sums due hereunder to the date of such prepayment together with a Make
Whole Amount.

  3.04   No Deduction for Taxes

  (a)   All payments by the Borrowers to the Lenders hereunder or under the
Notes will be made free and clear of and without deduction or withholding on
account of any Taxes except for Excluded Taxes unless the Borrowers are required
by law to make such a payment subject to the deduction or withholding of such
Taxes, (other than Excluded Taxes) in which case the amount payable by the
Borrowers will be increased to the extent necessary to ensure that, after the
making of the required deduction or withholding, the Lenders receive a net sum
equal to the sum which it would have received had no such deduction or
withholding been made or required. The Borrowers will pay all Taxes payable by
the Borrowers pursuant to this Section 4.08, and will deliver to the Lenders
proof of payment of all such Taxes within thirty (30) days of the due date for
such payment. The obligations of the Borrowers under this Section 3.04 will
survive the repayment to the Lenders of the principal of and payment of interest
on the indebtedness of the Borrowers to the Lenders thereunder. To the extent
that the Lenders recover such Taxes the Borrowers shall be reimbursed for any
payments made by the Borrowers in relation to such Taxes.

  (b)   If the Borrowers cannot legally pay or remit such Taxes as provided in
Section 3.04(a), the rate of interest payable under this Agreement will be
increased to such rate as will yield to the Lenders, after payment of such
Taxes, the Interest Rate specified in this Agreement, and all other amounts
payable by the Borrowers hereunder. The Borrowers will, at the request of
Lenders, execute and deliver any further instruments necessary or advisable to
reflect such increase in the rate of interest.

  (c)   The Lenders will co-operate with the Borrowers to the extent reasonably
possible in obtaining and maintaining any withholding tax exemptions.

  3.05   Place and Manner of Payment

Amounts payable by the Borrowers to the Lenders pursuant hereto will be paid in
United States Dollars without set-off or counterclaim not later than 11:00 a.m.
(New York City time) on the day such payment is due and in funds which are for
same day settlement, at:

CITIBANK N.A.
New York, New York USA
Account Number : 36236357
ABA # 021000089
UID 189284
SWIFT CITIUS33

in respect of amounts payable to EDC, and to:

CITIBANK N.A.
New York, New York USA
Account Number : 109 260 93
ABA # 021000089
SWIFT CITIUS33
Reference K 8388

with respect to amounts payable to KfW, or at such other account or financial
institution as EDC or KfW may from time to time notify the Borrowers. Any
payments received after 11:00 a.m. (New York City time) will be considered for
all purposes as having been made on the next following Banking Day.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

  4.01   Representations and Warranties

To induce the Lenders to enter into this Agreement, the Borrowers hereby
represent and warrant to the Lenders as at the date hereof and as of the
Effective Date and acknowledge and confirm that the Lenders are relying upon
such representations and warranties in executing this Agreement.

  (a)   Status and Power. Each Borrower is duly organized and validly subsisting
under the laws of its jurisdiction of organization. Each of the Borrowers has
all requisite capacity, power and authority to enter into and carry out the
transactions contemplated by the Loan Documents to which it is a party.

  (b)   Authorization and Enforcement of Loan Documents. All necessary action
has been taken to authorize the execution, delivery and performance of the Loan
Documents by the Borrowers and each of the Borrowers has duly executed and
delivered the Loan Documents to which it is a party. Each Loan Document to which
a Borrower is a party is a legal, valid and binding obligation of such Borrower,
enforceable against such Borrower by the Lenders in accordance with its terms.

  (c)   Compliance with Other Instruments. The execution, delivery and
performance of the Loan Documents and the consummation of the transactions
contemplated herein and therein do not and will not conflict with, result in any
breach or violation of, or constitute a default under or under which an
Encumbrance would be created, the terms, conditions or provisions of the
organization documents or by-laws of the Borrowers or of any Applicable Law, or
of any material agreement, or other instrument to which the Borrowers (or any of
them) are a party or are otherwise bound.

  (d)   All Approvals in Place. All approvals, qualifications, authentications,
licenses and permits of any Governmental Authority or any other third party
required in connection with the Loan Documents have been procured.

  (e)   Litigation. There are no actions, suits, inquiries, claims or
proceedings pending or threatened against or affecting the Borrowers (or any of
them) which could impair the ability of the Borrowers to perform their
respective obligations under the Loan Documents to which they are a party.

  (f)   No Default. No condition, event or act has occurred which constitutes or
which, with giving of notice, lapse of time or both, would constitute an Event
of Default.

  (g)   Income Taxes. Each of the Borrowers have filed all income tax returns
required by Applicable Law with all relevant Governmental Authorities in all
applicable jurisdictions and has paid all Taxes stated therein or in any
relevant assessment to be due and payable in respect of the current fiscal year
except those Taxes, the payment of which is being contested in good faith
through appropriate proceedings and for which adequate reserves are being
maintained.

  (h)   Material Adverse Change. Since January 1, 2005, no event has occurred
which caused a Material Adverse Effect on the Borrowers (or any of them) and
there has not occurred any event or circumstance which will or could reasonably
be expected to have a Material Adverse Effect on the Borrowers (or any of them).

  (i)   Permitted Encumbrances. The Borrowers are the owner of the Locomotives
free and clear of any Encumbrances, except Permitted Encumbrances.

  4.02   Survival of Representations and Warranties

All of the representations and warranties contained in Section 4.01 shall
survive the execution and delivery of this Agreement notwithstanding any
investigation made at any time by or on behalf of the Lenders.

ARTICLE 5

COVENANTS

  5.01   Covenants

The Borrowers hereby covenant and agree with the Lenders that, so long as any
principal or interest on the Notes remains unpaid and so long as there is any
other amount payable to the Lenders from the Borrowers hereunder and unless the
Lenders otherwise expressly consent in writing:

  (a)   Payment When Due. The Borrowers shall pay all sums of money when due by
them to the Lenders under the Notes and under this Agreement.

  (b)   Corporate Existence. The Borrowers shall maintain their existence in
good standing and shall not take part in any dissolution, reorganization,
amalgamation, merger, arrangement or any similar proceeding.

  (c)   Remaining a Railroad. KCSR shall at all times remain a “railroad”, as
such term is defined in Section 101 (44) of the U.S. Bankruptcy Code, such that
KCSR’s obligations hereunder shall be subject to the provisions of Section 1168
of the U.S. Bankruptcy Code.

  (d)   Payment of Taxes and Claims. The Borrowers shall pay and discharge all
Taxes imposed upon the Borrowers or upon their income, profits or properties
prior to the date on which penalties attach thereto except for those Taxes which
are being contested in good faith through appropriate proceedings and for which
adequate reserves are being maintained.

  (e)   Notice of Default. The Borrowers shall promptly notify the Lender of the
occurrence of any Default or Event of Default and shall concurrently deliver to
the Lenders a detailed statement of a senior officer of KCSR of the steps, if
any, being taken to cure or remedy such Default or Event of Default.

  (f)   Maintenance of Ownership. Substantially all of the interests
constituting the ownership of SPV shall at all times be wholly owned, directly
or indirectly, by KCSR.

ARTICLE 6

THE EFFECTIVE DATE

  6.01   Conditions Precedent

This Agreement shall become effective on such date (the “Effective Date”) as
each of the following shall have been satisfied to the reasonable satisfaction
of the Lenders, as evidenced by a notice submitted by each of the Lenders to the
Borrowers electronically on the Effective Date:

  (a)   the Lenders shall have received the following:

  (i)   certified copies of the organizational documents and by-laws of the
Borrowers;

  (ii)   a certificate of good standing for KCSR in Missouri:

  (iii)   certified copies of the resolutions of the board of directors or other
managing body of each of the Borrowers, authorizing such Borrower to execute,
deliver and perform its obligations under the Loan Documents to which each it is
a party;

  (iv)   a certified copy of the Lease;

  (v)   opinion of KCSR’s counsel addressed to each of the Lenders in form and
substance reasonably satisfactory to the Lenders, including with respect to the
matters described in Section 5.01(c) concerning the applicability of
Section 1168 of the U.S. Bankruptcy Code to KCSR’s obligations hereunder, and
such matters of Canadian law as were provided in connection with the execution
of the Original Loan Agreement, with such Canadian law opinion to be provided by
Osler, Hoskin & Harcourt LLP;

     
(vi)
(vii)
(viii)
  a fully executed copy of the Mortgage and Security Agreement;
a fully executed copy of the Termination of Trust Agreement;
a fully executed copy of the Assignment and Assumption Agreement;

  (ix)   a fully executed copy of the Purchase and Sale Agreement between the
Borrowers and El-Mo-Mex covering the Locomotives; and

  (x)   such other documents, opinions and certificates as the Lenders may
reasonably request.

  (b)   each of the Lenders shall have received its Notes as required hereby,
together with a written authorization from the Borrowers to date such Notes the
Effective Date;

  (c)   the Lenders shall be satisfied that all necessary approvals, consents
and authorizations of any Governmental Authority shall have been obtained;

  (d)   an incumbency certificate with respect to the signatures and
officerships of each officer of a Borrower executing any of the Loan Documents;

  (e)   all documents and instruments have been properly registered, recorded or
where applicable submitted for registration and filed in all places where such
filing is necessary to perfect the security created by the Security Documents to
ensure the intended first ranking priority of the Security;

  (f)   no Default shall have occurred and be continuing or would arise
immediately after giving effect to or as a result of the occurrence of the
Effective Date;

  (g)   the representations and warranties contained in Section 4.01 shall be
true and correct in all respects on the Effective Date as if such
representations and warranties were made on such date, and the Borrowers shall
be in compliance with the covenants of the Borrowers contained in Section 5.01;
and

  (h)   confirmation satisfactory to the Lenders shall have been received that
the application for registration of the bills of sale with respect to the
conveyance of the Locomotives from El-Mo-Mex to the Borrowers, the Assignment
and Assumption Agreement and any other required documents have been filed in the
Mexican Railroad Registry.

  6.02   Actions to be taken by or on the Effective Date

  (a)   The Lenders shall be paid all unpaid and accrued interest on the
Original Notes, calculated through the Effective Date, together with the portion
of the principal installment due on the immediately succeeding payment date
under the Original Notes that has accrued through the Effective Date; and

  (b)   The Lenders shall return to the Borrowers the Original Notes, which
shall have been cancelled by the Lenders by appropriate notation on the face of
the Original Notes.

  6.03   Waiver

The terms and conditions of Sections 6.01 and 6.02 are inserted for the sole
benefit of the Lenders and the Lenders and only the Lenders may waive them, in
whole or in part.

ARTICLE 7

DEFAULT AND REMEDIES

  7.01   Events of Default

Upon the occurrence of any one or more of the following events:

  (a)   the non-payment of any amount due hereunder or under the Notes by the
Borrowers and a period of five (5) Banking Days has elapsed;

  (b)   the commencement of proceedings for the dissolution, liquidation or
winding-up of any of the Borrowers or for the suspension of the operations of
any of the Borrowers;

  (c)   any Borrower shall admit its inability to pay its debts generally as
they become due, or cease to carry on its business, or is adjudged or declared
bankrupt or insolvent, or make an assignment for the general benefit of
creditors, or petition or apply to any tribunal for the appointment of a
receiver or trustee for it or for any substantial part of its property, or
commences any proceedings relating to it under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or by any act indicate its
consent to, approval of, or acquiescence in, any such proceeding for it or for
any part of its property, or suffer the appointment of any receiver or trustee;

  (d)   other than with respect to (a), (b) and (c) above; the breach by the
Borrowers of any provision of any covenant contained herein provided that the
Borrowers shall have a period of sixty (60) days to cure such breach after
notice is given by the Lenders to the Borrowers of such breach;

  (e)   any representation or warranty made herein shall be false or inaccurate
in any material respect when made;

  (f)   if at any time a court of competent jurisdiction makes any final
judgment or order, or any law, ordinance, decree or regulation is enacted, the
effect whereof is to render any of the Loan Documents or any material provision
thereof, invalid or unenforceable, and if within 90 days after the making or
enactment of such judgment, order, law, ordinance, decree or regulation, the
Borrowers fails to furnish or cause to be furnished replacement documents
evidencing and, where applicable, securing its indebtedness hereunder which are
adequate in the reasonable opinion of the Lenders;

  (g)   if a Borrower fails to comply with the provisions of Section 4.1 of the
Mortgage and Security Agreement;

  (h)   there shall have occurred an Event of Default (as defined in the Lease)
under the Lease, provided that the Borrowers shall have the right to cure in the
aggregate up to twelve (12) payment defaults thereunder; and

  (i)   a Change of Control of KCSR occurs without the prior written consent of
the Lenders.

The Lenders may, by notice to the Borrowers, declare all indebtedness of the
Borrower to the Lenders pursuant to this Agreement and the Notes to be
immediately due and payable whereupon all such indebtedness shall immediately
become and be due and payable and the Security shall become enforceable.

ARTICLE 8

SECURITY

  8.01   Security

The Borrowers have entered into the Mortgage and Security Agreement
substantially in the form of Schedule C appended hereto.

ARTICLE 9

MISCELLANEOUS

  9.01   Waivers and Amendments

No failure or delay by the Lenders in exercising any right hereunder shall
operate as a waiver of such right nor shall any single or partial exercise of
any power or right hereunder preclude their further exercise or the exercise of
any other power or right. Any waiver by the Lenders of the strict observance,
performance or compliance with any term, covenant or condition of this Agreement
is not a waiver of any subsequent default and any indulgence by the Lenders with
respect to any failure to strictly observe, perform or comply with any term,
covenant or condition of this Agreement is not a waiver of the entire term,
covenant or condition or any subsequent default. Any term, covenant, agreement
or condition of this Agreement may only be amended with the consent of the
Borrowers and the Lenders or compliance therewith may only be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the Lenders.

  9.02   Notices

All notices and other communications provided for herein shall be in writing and
shall be personally delivered to an officer or other responsible employee of the
addressee or sent by telefacsimile or other direct written electronic means,
charges prepaid, at or to the applicable addresses or telefacsimile numbers, as
the case may be, set opposite the party’s name on a signature page hereof or at
or to such other address or addresses or telefacsimile number or numbers as
either party hereto may from time to time designate to the other party in such
manner. Any communication which is personally delivered as aforesaid shall be
deemed to have been validly and effectively given on the date of such delivery
if such date is a Banking Day and such delivery was made during normal business
hours of the recipient; otherwise, it shall be deemed to have been validly and
effectively given on the Banking Day next following such date of delivery. Any
communication which is transmitted by telefacsimile or other direct written
electronic means as aforesaid shall be deemed to have been validly and
effectively given on the date of transmission if such date is a Banking Day and
such transmission was made during normal business hours of the recipient;
otherwise, it shall be deemed to have been validly and effectively given on the
Banking Day next following such date of transmission. Notwithstanding anything
contained in this Agreement to the contrary, delivery of a notice to KCSR by the
Lenders shall constitute satisfactory delivery of such notice to both of the
Borrowers for all purposes of this Agreement, and separate delivery of such
notice to SPV shall not be required to render such delivery effective.

  9.03   Successors and Assigns

This Agreement shall enure to the benefit of and shall be binding upon the
parties hereto and their respective successors and permitted assigns.

  9.04   Assignment by Borrowers – Transfer of Obligations for New Leveraged
Lease

Neither this Agreement nor the benefit hereof may be assigned by any party
hereto without the prior written consent of the other parties hereto, which
consent shall not be unreasonably withheld. In addition to the foregoing, the
Lenders agree to permit the assignment and assumption of the Borrowers’
obligations hereunder and under the Notes to facilitate a new leveraged lease
financing under which a grantor trust (the “Lessor”) will be the debtor and will
lease the Locomotives to KCSR; provided, however, that prior to such assignment
and assumption, each of the following shall be accomplished to the reasonable
satisfaction of the Lenders:

  (a)   All existing leases covering the Locomotives shall be terminated and a
new lease entered into between the Lessor, as lessor, and KCSR, as lessee (the
“KCSR Lease”), pursuant to which KCSR shall be unconditionally obligated to make
rental payments at all times in amounts sufficient to discharge all payments of
principal and interest then due on the Notes and containing such other
provisions as are customary for leveraged lease documentation covering rail
locomotives as are reasonably satisfactory to the Lenders;

  (b)   The Lessor shall have entered into a new loan and security agreement
containing terms and provisions reasonably acceptable to the Lenders, and the
Borrowers shall be released form their obligations hereunder and under the
Notes;

  (c)   New notes shall be issued in exchange for the Notes but without payment
of a Make Whole Amount in connection with such substitution of notes, with such
new notes evidencing the obligations of the Lessor to pay principal and interest
as therein provided, such new Notes to be for a term of up to 15 years and with
the amortization of the new Notes to be tied to the rent optimization specified
by the new lessor (but with an average life to maturity of not to exceed
10 years), but in all events each installment of rent payable by KCSR under the
KCSR Lease shall be in an amount sufficient to pay in full the installment of
principal and interest then due to the Lenders, with interest on such new Notes
payable at the Interest Rate;

  (d)   The Lenders shall receive on the effective date of the new leveraged
lease financing a first perfected security interest and assignment in and to the
Locomotives and the KCSR Lease and a payment equal to any accrued but unpaid
interest on the Notes;

  (e)   The Lenders shall be reimbursed for any costs incurred by them in
connection with the new leveraged lease financing, including the reasonable fees
and disbursements of their counsel;

  (f)   The Lenders will be paid a fee at the closing of the leveraged lease
transaction equal to 1% of the principal amount of the debt to be assumed by the
new lessor;

  (g)   The Lenders shall have received evidence of the filing of all documents
necessary to perfect the security interest of the Lenders in and to the
Locomotives and the KCSR Lease;

  (h)   The Lenders shall have received such other agreements, certificates,
affidavits, legal opinions and other documents as they deem necessary or
desirable to protect their interests in the repayment of the advances previously
made by the Lenders and in their security interest in the Locomotives and the
KCSR Lease, including legal opinions of the scope specified in clause (v) of
Section 6.01(a);

  (i)   All of the above shall be accomplished not later than December 31, 2005,
and

  (j)   Notwithstanding any of the above clauses, provided that if KCSR notifies
the Lenders that a subsequent closing with a third party equity is contemplated
to occur between December 31, 2005 and March 31, 2006, the Lenders agree that
the loan amortization schedule may be amended in connection with such event, so
long as the constraints described in clause (c) above continue to be satisfied
and provided that the Lenders are indemnified for any increased funding costs
caused by such revised amortization schedule, such indemnified amount to be
determined by the Lenders and to be payable at the time of the adoption of the
amended amortization schedule.

  9.05   Assignment by KfW

In addition to any other right or privilege granted to KfW herein or in the
Mortgage and Security Agreement, the parties hereto agree that KfW may transfer
or assign any or all of its rights and obligations under this Agreement and
under the Mortgage and Security Agreement to any other entity (an “Assignee”)
that may lawfully receive and perform the rights and obligations being
transferred or assigned (including, without limitation, any company that
qualifies as a “Subsidiary” of KfW within the meaning of section 15 ff. of the
German Stock Corporation Act (Aktiengesetz) in that such Subsidiary is directly
or indirectly (i) majority owned (im Mehrheitsbesitz) by KfW or (ii) controlled
(abhängig) by KfW); provided, however, that in connection with any such
assignment or transfer:

  1.   KfW will provide to all other parties hereto timely notice of such
assignment or transfer and the Assignee becomes a party to this Agreement and
the Mortgage and Security Agreement;

  2.   If, by reason of circumstances already existing at the time of such
assignment or transfer, the Borrowers would be obligated to make a payment to
the Assignee under Sections 3.03 or 3.04, the Borrowers’ obligation to the
Assignee under such sections shall be limited to the amount that the Borrowers
would have been required to pay to KfW under such sections assuming such
assignment or transfer had not occurred; and

  3.   KfW will pay the costs of any such assignment or transfer.

  9.06   Implementation of Agreement

The parties agree to execute such further documents and to perform, or cause to
be performed, such further and other acts as may be necessary or desirable to
give full effect to this Agreement.

  9.07   Costs and Expenses

The Borrower shall pay all reasonable out-of-pocket fees and expenses of the
Lenders (i) in connection with the Loan Documents, the Lease and any other
related document for which costs or expenses were incurred by the Lenders (the
“Documents”), including, without limitation, legal fees, in connection with the
drafting and negotiation of the Documents and the enforcement of any of the
Documents in addition to all expenses, costs associated with the approval of the
Documents, travel expenses and appraisal costs and (ii) in connection with the
negotiation, documentation and closing of the leveraged lease transaction
described in Section 9.04.

  9.08   English Language

The parties confirm that it is their wish that this Agreement, as well as any
other documents relating to this Agreement, including notices and Schedules,
have been and shall be drawn up in the English language only.

  9.09   Currency

This Agreement is part of an international loan transaction in which the
specification of United States Dollars and payment in New York City as the case
may be, is of the essence, and the obligations of the Borrower under this
Agreement to make payment to (or for the account of) the Lenders in United
States Dollars shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any other currency or in
another place except to the extent that such tender or recovery results in the
effective receipt by the Lenders of the full amount in United States Dollars
payable to the Lenders hereunder. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due under this Agreement to the
Lenders or any indemnified Person into another currency, the rate of exchange
used shall be that at which, in accordance with normal banking procedures, such
party could purchase United States Dollars with such other currency in New York
on the Banking Day next preceding the day on which final judgment is rendered.
The obligation of the Borrower in respect of any sum payable under this
Agreement by it to the Lenders or any indemnified Person (in this Section,
called the “Entitled Person”) shall, notwithstanding any judgment in a currency
(the “Judgment Currency”) other than United States Dollars, be discharged only
to the extent that on the Banking Day following receipt by such Entitled Person
of any sum adjudged to be so due in the Judgment Currency such Entitled Person
may, in accordance with normal banking procedures purchase and transfer United
States Dollars to New York City with the amount of the Judgment Currency so
adjudged to be due; if the amount of the United States Dollars which could have
been so purchased and transferred is less than the sum originally due in United
States Dollars to such Entitled Person, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Entitled
Person against, and to pay such Entitled Person on demand in United States
Dollars, the amount by which the sum originally due to such Entitled Person in
United States Dollars hereunder exceeds the amount of the United States Dollars
so purchased and transferred.

  9.10   Entire Agreement

This Agreement and the agreements referred to herein and delivered pursuant
hereto constitute the entire agreement between the parties hereto and supersede
any prior agreements, undertakings, declarations, representations and
understandings, both written and verbal, in respect of the subject matter
hereof.

  9.11   Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable in such
Province.

  9.12   Obligations Joint and Several

The Borrowers acknowledge and agree that each and every obligation of the
Borrowers or any of them hereunder or under the Notes shall be and constitute
the direct and recourse obligation of each of the Borrowers, in the full amount
of such obligation and without division or apportionment as between the
Borrowers, and the Borrowers further acknowledge and agree that all such
obligations shall be the joint and several obligations of the Borrowers. In
furtherance of the preceding and not in limitation thereof, each of the
Borrowers agrees that suit or other action may be brought against such Borrower
for the full amount due the Lenders hereunder or under the Notes, without the
requirement that the other Borrower shall be named, served or otherwise included
in any such action or proceeding.

  9.13   Counterparts

This Agreement may be executed by the parties in separate counterparts and by
facsimile transmission, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

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IN WITNESS WHEREOF the parties hereto have executed this Agreement.

         
EXPORT DEVELOPMENT CANADA 151 O’Connor Street Ottawa, Canada, K 1 A 1K3
       
Attention:
  Asset Management

Telefax:
    (613) 598-3186  
Signature: /s/ Ian Cameron
       
 
       
(Print Name): Ian Cameron
        Asset Management

Signature: /s/ Bruce Dunlop
       
 
       
(Print Name): Bruce Dunlop Director
       
KfW Palmengartenstrasse 5-9 60325 Frankfurt am Main Germany
       
Attention:
    X2c  
Telefax:
    0049-69-7431-2428  
Signature: /s/ Wolfgang Reuß
       
 
       
(Print Name): Wolfgang Reuß
        Senior Vice President

Signature: /s/ Inga Conrady
       
 
       
(Print Name): Inga Conrady
        Vice President
THE KANSAS CITY SOUTHERN RAILWAY COMPANY

Signature: /s/ Ronald G. Russ
       
 
       
Print name: Ronald G. Russ
        Title: Executive Vice President and Chief Financial

Officer
        Attn: Senior Vice President & General Counsel

PO Box 219335 Kansas City MO 64121-9335
        Address of for Courier and Similar Delivery:
Attn: Senior Vice President & General Counsel

427 West 12th Street Kansas City MO 64105 Copy to:
        The Kansas City Southern Railway Company
Attn: Executive Vice President & CFO

PO Box 219335 Kansas City MO 64121-9335
       
Telefax:
       
NAFTA RAIL, S.A. de C.V. Signature: /s/ Jay M. Nadlman
       
 
       
(Print Name): Jay M. Naldman Title: Authorized Representative c/o TFM, S.A. de
C.V. Av. Periferico Sur 4829, Piso 4 Col. Parques Del Pedregal Mexico, D.F.
14010
       

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