Document:

<PAGE>

                                                          Exhibit 10.31

                          SUPPLEMENT NO. 1 dated as of January 29, 2001, to the
                  Security Agreement dated as of January 11, 2000, among THE
                  KANSAS CITY SOUTHERN INDUSTRIES, INC., a Delaware corporation
                  ("Holdings"), THE KANSAS CITY SOUTHERN RAILWAY COMPANY, INC.,
                    --------
                  a Missouri corporation (the "Borrower"), each other Subsidiary
                                               --------
                  of Holdings listed on Schedule I thereto or becoming a party
                  thereto as provided in Section 7.15 thereof (collectively, the
                  "Subsidiary Grantors"; Holdings, the Borrower and the
                   -------------------
                  Subsidiary Grantors being referred to collectively as the
                  "Grantors") and THE CHASE MANHATTAN BANK, ("Chase"), as
                   --------                                   -----
                  collateral agent (in such capacity, the "Collateral Agent"),
                                                           ----------------
                  for the Secured Parties (as defined in the Credit Agreement
                  referred to below).

     A. Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
 ----------------
party thereto (the "Lenders"), and Chase, as administrative agent (in such
                    -------
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
               --------------------
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
 ----------------                                            ------------
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement.

     B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Credit Agreement.

     C. The Grantors have entered into the Security Agreement in order to induce
the Lenders to make Loans and the Issuing Bank to issue Letters of Credit.
Section 7.15 of the Security Agreement provides that additional Subsidiaries may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. Each of the undersigned Subsidiaries
(each a "New Grantor" and collectively, the "New Grantors") is executing this
                                             ------------
Supplement in accordance with the requirements of the Credit Agreement to become
a Grantor under the Security Agreement in order to induce the Lenders to make
additional Loans and the Issuing Bank to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.

     Accordingly, the Collateral Agent and the New Grantors agree as follows:

     SECTION 1. In accordance with Section 7.15 of the Security Agreement, each
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and each New Grantor hereby (a) agrees to all the terms and provisions
of the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, each New Grantor, as security for the payment and
performance in full of the Obligations (as defined in the Credit Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of such New Grantor's right, title and
interest in and to the Collateral (as defined in the Security Agreement) of such
New Grantor. Each reference to
<PAGE>

a "Grantor" in the Security Agreement shall be deemed to include the New
   -------
Grantors. The Security Agreement is hereby incorporated herein by reference.

     SECTION 2. Each New Grantor represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

     SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantors and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

     SECTION 4. Each New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of such New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of such New Grantor.

     SECTION 5. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.

     SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

     SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Security Agreement. All communications
and notices hereunder to the New Grantors shall be given to them in care of the
Borrower.

     SECTION 9. The New Grantors agree to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
<PAGE>

     IN WITNESS WHEREOF, the New Grantors and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

                                    PABTEX GP, LLC

                                    By: SOUTHERN INDUSTRIAL
                                        SERVICES, INC., its sole member

                                        By:/s/ Robert H. Berry
                                           ----------------------------------
                                           Name:  Robert H. Berry
                                           Title: Vice President and Treasurer
                                           Address: 114 West 11th Street
                                                    Kansas City, MO 64105-1804

                                    SIS BULK HOLDING, INC.

                                    By: /s/ Robert H. Berry
                                       -------------------------------------
                                       Name:  Robert H. Berry
                                       Title: Vice President and Treasurer
                                       Address: 114 West 11th Street
                                                Kansas City, MO 64105-1804

                                    THE CHASE MANHATTAN BANK, as
                                    Collateral Agent,

                                    By: /s/ Robert A. Krasnow
                                       -------------------------------------
                                       Name:  Robert A. Krasnow
                                       Title: V.P.
<PAGE>

                                                                      SCHEDULE I
                                                       to Supplement No.1 to the
                                                              Security Agreement
                            LOCATION OF COLLATERAL
                            ----------------------

Description                                        Location
-----------                                        --------

None*

*For a description of the Equity Interests, see Schedule II to Supplement No. 1
to the Pledge Agreement<PAGE>

                                                                   Exhibit 10.32

                         SUPPLEMENT NO. 1 dated as of January 29, 2001, to the
               Indemnity, Subrogation and Contribution Agreement dated as
               January 11, 2000, among KANSAS CITY SOUTHERN INDUSTRIES, INC., a
               Delaware corporation ("Holdings"), THE KANSAS CITY SOUTHERN
                                      --------
               RAILWAY COMPANY, a Missouri Corporation (the "Borrower"), each
                                                             --------
               Subsidiary of Holdings listed on Schedule I thereto or becoming a
               party thereto as provided in Section 12 thereof (each
               individually, a "Subsidiary Guarantor" and, collectively,
                                --------------------
               together with Holdings and the Borrower, the "Guarantors") and
                                                             ----------
               THE CHASE MANHATTAN BANK ("Chase"), as collateral agent (the
                                          -----
               "Collateral Agent") for the Secured Parties (as defined in the
               -----------------
               Credit Agreement referred to below).

     A.  Reference is made to (a) the Credit Agreement dated as of January 11,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
-----------------
party thereto (the "Lenders"), and Chase, as administrative agent (in such
                    -------
capacity, the "Administrative Agent"), collateral agent (in such capacity, the
               --------------------
"Collateral Agent") and issuing bank (in such capacity, the "Issuing Bank"), and
-----------------                                            ------------
(b) the Guarantee Agreement and the other Loan Documents referred to in the
Credit Agreement.  The rules of construction set forth in Section 1.03 of the
Credit Agreement shall apply equally to this Agreement.

     B.  Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.

     C.  Holdings and the Subsidiary Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit.  Certain additional
Subsidiaries may be required from time to time, under the terms of the Credit
Agreement, to enter into the Guarantee Agreement as a Guarantor upon becoming a
Subsidiary Loan Party.  Section 12 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries may become
Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement.  Each of
the undersigned Subsidiaries  (each a "New Guarantor" and collectively, the "New
Guarantors") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Guarantor under the Indemnity, Subrogation and
Contribution Agreement in order to induce the Lenders to make additional Loans
and the Issuing Bank to issue additional Letters of Credit and as consideration
for Loans previously made and Letters of Credit previously issued.

     Accordingly, the Collateral Agent and the New Guarantors agree as follows:
<PAGE>

     SECTION 1.  In accordance with Section 12 of the Indemnity, Subrogation and
Contribution Agreement, each New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and each New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder.  Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantors.  The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.

     SECTION 2.  Each New Guarantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

     SECTION 3.  This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantors and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

     SECTION 4.  Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.

     SECTION 5.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 6.  In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired.  The parties hereto shall endeavor in good-
faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

     SECTION 7.  All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement.  All communications and notices hereunder to the New
Guarantors shall be given to them at the address set forth under their
signatures.

     SECTION 8.  The New Guarantors agree to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN WITNESS WHEREOF, the New Guarantors and the Collateral Agent have duly
executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.

                              PABTEX GP, LLC

                              By:  SOUTHERN INDUSTRIAL SERVICES,
                                   INC., its sole member

                                   By: /s/ Robert H. Berry
                                       -------------------------------------
                                       Name:  Robert H. Berry
                                       Title: Vice President and Treasurer
                                       Address: 114 West 11th Street
                                                Kansas City, MO 64105-1804

                              SIS BULK HOLDING, INC.

                              By: /s/ Robert H. Berry
                                 --------------------------------------------
                                 Name:  Robert H. Berry
                                 Title: Vice President and Treasurer
                                 Address: 114 West 11th Street
                                          Kansas City, MO 64105-1804

                              THE CHASE MANHATTAN BANK, as
                              Collateral Agent,

                              By /s/ Robert Krasnow
                                 ------------------------------
                                 Name:  Robert Krasnow
                                 Title: Vice President
<PAGE>

                                              Schedule I to Supplement No. 1
                                           to the Indemnity, Subrogation and
                                                      Contribution Agreement

                                  GUARANTORS

Name                                               Address
----                                               -------

Caymex Transportation, Inc.                   114 W. 11th Street
                                              Kansas City, MO 64105

Gateway Eastern Railway Company               114 W. 11th Street
                                              Kansas City, MO 64105

Gateway Western Railway Company               114 W. 11th Street
                                              Kansas City, MO 64105

PABTEX, L.P. (formerly known as               114 W. 11th Street
Global Terminaling Services, Inc.)            Kansas City, MO 64105

KCS Transportation Company                    114 W. 11th Street
                                              Kansas City, MO 64105

Kansas City Southern Industries, Inc.*        114 W. 11th Street
                                              Kansas City, MO 64105

Mid-South Microwave, Inc.                     114 W. 11th Street
                                              Kansas City, MO 64105

Rice-Carden Corporation                       114 W. 11th Street
                                              Kansas City, MO 64105

SCC Holdings, Inc.                            114 W. 11th Street
                                              Kansas City, MO 64105

Southern Development Company                  114 W. 11th Street
                                              Kansas City, MO 64105

Southern Industrial Services, Inc.            114 W. 11th Street
                                              Kansas City, MO 64105

Trans-Serve, Inc.                             114 W. 11th Street
                                              Kansas City, MO 64105

Veals, Inc.                                   114 W. 11th Street
                                              Kansas City, MO 64105
<PAGE>

SIS Bulk Holding, Inc.                        114 W. 11th Street
                                              Kansas City, MO 64105

PABTEX GP, LLC                                114 W. 11th Street
                                              Kansas City, MO 64105

*Kansas City Southern Lines, Inc. was merged into Kansas City Southern
Industries, Inc. effective as of December 31, 2000.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]